September 30, 2026 · Finance Committee · 8,556 words · 11 speakers · 90 segments
The House Finance Committee will come to order. Will the clerk please call the roll? Chair Stewart? Here. Vice Chair DeVilla? Here. Ranking Member Sweeney? Here. Representatives Abdullahi? Here. Rep. Abrams? Here. Baker? Here. Byrd? Here. Rep. Calendar is excused. Glassburn? Here. Grimm? Here. Hall? Here. Hoops? Here. Jerrolds, John, here. Johnson, here. Manning, Piclantonio, here. Plummer, here. Ritter, here. Robinson, present. Gromer, here. Santucci, here. Schmidt, here. Sims, here. Thomas, here. Troy, White, here. Williams? Here. Willis? Here. And Young? Here. We have a quorum present, so we'll proceed as a full committee. The first order of business is to approve the minutes from the previous committee meeting. Without objection, the minutes will be approved. Hearing no objection, the minutes are approved and are a part of the record. I want to thank everybody for making time to come back, and a little unexpectedly, here at the end of September. So appreciate all the members for being here and being prompt. A bit of housekeeping, as we always try to do. House Bill 1019 has not yet formally been referred to the committee, and so we are hearing the bill informally. And with that in mind, before we get started, happy to recognize Ranking Member Sweeney for a comment.
Thank you, Chair, and good morning to the committee members and everyone watching the Ohio Chamber in the audience. and I appreciate the chair allowing me to make some comments because I felt it was important and my caucus felt it was important to acknowledge what it means with the decision of purposely having an informal hearing. An informal hearing means that the actual bill that we all know is going to be attempted to be voted on later means that the bill before us will actually not be the bill. It will also, in the House, we will have no ability to hear from the public and hear concerns about how this bill could be better or maybe possible concerns with how it's currently constructed as what happened yesterday. Additionally, and I do appreciate the chair sharing that, the bill that is likely to be voted on later today is likely to change because of some of the issues that the public brought up. And so by that nature, by definition of the bill that we'll be hearing today, is not actually the most up-to-date. And most notably, what this does is ensure that not one member of the House of Representatives will have any ability to amend, make any changements, to meet any more improvements to meet the crisis of affordability in this state. And oftentimes, if anyone's watched committee, it is a normal process for people to offer amendments. Most of the time they get tabled, and that's the reality of having two parties. We have two different views on how to do things. but this is different than that typical notion. What we're doing this year is barring anyone from having the ability to even offer. And I would suggest that the reason that is the reality of what we're facing today is because the amendments that Democrats want to offer are popular. They're not just what our caucus wants. It's what the majority of people want, and many of these ideas are supported by people on both sides of the aisle. And so as we are about to go into testimony, our call is to continue to urge the public and for the House to do its duty to have input on a bill that is going to spend $726 million of your taxpayer dollars in an attempt to get it back to you. And so we urge the continuation of having more thorough discussion for amendments that meet the relief of finding ways to make this gas tax holiday more effective, but also meeting the other needs that are left unaddressed and purposely left so that we have no ability to structurally make those moments. And with that, I appreciate the chair for giving me that time to make that and hope that we can have a thorough discussion, not just about how we can make this bill better, but how we can do better and do more for the people of Ohio.
I thank you, Ranking Member Sweeney. Just a brief reply. We've had a substantial amount of discussion and testimony yesterday in the Senate. The effort we're talking about today has been drafted in conjunction with our friends in the other chamber, and so the product that we are likely to vote on today has been vetted in that chamber as well. I would also say I received three amendments relating to this bill, and at the risk of disappointing anybody, they all would have been ruled not germane remotely to the bill. There's an amendment about data centers, an amendment about the war in Iran, and an amendment about the Cleveland Browns. None of those have anything to do with a gas tax suspension for the benefit of Ohioans. So at the risk of denying some folks some theater today, we're ready to talk about the bill. So I now call up House Bill 1019 for its first hearing. I call up Representatives Andrea White and Jim Thomas to provide sponsor testimony. Welcome, representatives. You are free to proceed whenever you'd like.
No. Good morning, everybody. Chair Stewart, Vice Chair Davila, Ranking Member Sweeney, and members of the House Finance Committee, I want to thank you all for coming back today to work fervently on House Bill 1019, a bill that, if you're anything like me, have been hearing from your constituents all summer about, please, how do you spell relief, and please do it now. So basically what we are here today to talk about is a bill that will give immediate relief for Ohioans through a temporary 90-day suspension of Ohio's motor vehicle gas and diesel fuel taxes. while at the same time ensuring, let's be clear about that, ensuring that our local and our state road funds will not be impacted because we're taking $725 million in surplus and putting it back into the hands of Ohioans through putting this in the gas tax fund, Ohio Highway Fund, and then letting Ohioans see that relief at the pump. So the complex ways, Jim's going to tell you all the detail. He's the attorney. But when representatives Ty Matthews and Adam Bird first brought up this idea, and I want to give them full due credit, because this idea has come up from both parties last week, Amy Acton, Vivek Ramaswamy. But Ty Matthews and Adam Bird both introduced this bill in May. And I signed on immediately because not that I thought the bill was perfect and that we needed to make sure the roads weren't affected, but I wanted us to begin the conversation and that's why I signed on. But I will tell you, now that we have fiscal year 26 firmly in the rearview mirror and new projections are coming out for fiscal year 27 and we have money in the surplus, money in the general fund, it's time to take action. As I've been walking in my district this summer, in the neighborhoods meeting with people, knocking on literally thousands of doors, I ask people, what is it that I can do for you as your state representative? What are the issues you care about? And the most consistent answer I get is, can you help me lower my food and gas prices? And I will tell you, I had several people tell me this yesterday. It's happening, it's frequent, and we're all hearing it. And I tell them something like, I wish we had more control at the state level. You know, there's a lot we can't control, like the price of oil, which is impacted not only by supply and demand, but also about decisions and geopolitical factors here and around the world. But I tell them what we can do as legislators is something that I've been pushing with my colleagues for, and that is to temporarily suspend Ohio's gas and diesel taxes so Ohioans can have relief. The response has been overwhelming. A year ago today, the price of gas averaged $2.87 a gallon. Yesterday, it was $4.32, down from a week ago, the last time I filled up. Last year, diesel was $3.67 a gallon. Yesterday, it was $6.73. And I will tell you, the price of diesel kind of pushed the tipping point for us to do something, because we all know gas has been expensive. We keep waiting and hoping it's going down. But not only gas, but diesel fuels the prices of every single thing we consume. The pain is real, and that's why we need to act now on what we can control, which is our state taxes, and move today to temporarily suspend the state's 38.5 cent per gallon gas tax, 47 cent per gallon diesel tax for 90 days, and to do so with an emergency clause so Ohioans will feel that immediate relief. Cents on the dollar add up as drivers and truckers fill up. And cumulatively, Ohioans are going to experience $725 million in tax relief over the next 90 days. House Bill 1019 accomplishes three things. Brings immediate relief for Ohioans now at a time of sustained high prices by returning their tax dollars to them at the pump. It uses surplus, higher-than-expected revenue to cover the costs so our local and state roads are maintained and none of that work is interrupted, and it provides clear transparency and accountability to ensure that consumers are the ones putting the tax break in their pockets. As I mentioned, the rise in fuel price impacts not only consumers at the pump, but affects every single industry that's fueled by diesel. Our farmers, our schools, our trucking logistics industries, our airline sectors, our manufacturers, and our businesses. Increased diesel shows up in the price of groceries, building materials, your Amazon delivery prices, and virtually every aspect of the supply chain. So acting now is going to bring a ripple effect down the road on future pricing. It's a win for all Ohioans. It's an initiative in line with some of the broader things we've been working on the last two years, which is cutting the state income tax to a flat rate, bringing over $4 billion in property tax relief over the next three years, including $350 million that people on the homestead exemption will see in their tax bills as a credit in January, and expanding access to things like publicly funded child care and preschool and renewing the state sales tax holiday. I'm going to turn it over right now to Representative Thomas to give you the finer points of this bill. Thank you.
Thank you, Representative White, and good morning. As Rep. White indicated, House Bill 1019 creates a 90-day tax state holiday on gasoline, 38.5 cents per gallon for gas, 47 cents per gallon as the tax on diesel. The bill includes an emergency clause to ensure the relief can be provided as soon as possible. The 90-day period referred to as the temporary reduction period begins at 12.01 a.m. on the third day following the effective date of the bill and ends at 11.59 p.m. on the 93rd day after the effective date. The very slight delay before implementation will allow suppliers and retailers to update their systems to reflect the tax suspension. we recognize that motor fuel tax is paid before the fuel actually reaches the retailer the retailer being the gas stations and that fuel will have already been purchased by the retailers before this reduction period begins and that will be purchased at the higher cost hb 1019 thus includes a mechanism that will help ensure prices at our retail establishments reflect the state gas tax suspension promptly. Retailers will immediately apply to the tax department for an inventory credit based on the amount and value of that gas they purchased. They will notify the department of how many gallons of each fuel they are in possession of at that time for which the standard tax rates have already been collected. The tax department will then send a payment equal to those taxes paid on those gallons. This will occur on or before February 1, 2027. This process will then reverse itself at the end of the reduction period. The retailer will notify the tax department of how many gallons they possess for which the reduced rate was applied and then remit an amount equal to those gallons multiplied by the difference between the standard rate and the holiday rate Revenues from this tax will be deposited into the Highway Operating Fund. This bill includes several measures to prevent price gouging and ensure Ohioans receive the full benefit of this suspension for the next 90 days. The bill requires retailers to provide the full benefit of the tax suspension on to customers during the reduction period. It also equips the tax commissioner and our Attorney General with appropriate tools to ensure compliance and accountability. Violations of these protections would be considered an infringement on the state's existing Consumer Sales Practice Act and may be pursued by the Attorney General. Finally, HB 1019 ensures an uninterrupted, consistent flow of dollars into the Highway Operating Fund. This bill appropriates $725 million in GRF to supplement the foregone motor fuel revenues that will not be conveyed to the state during this period. The GRF will be distributed per statutory requirements in the same manner as motor fuel revenue. This includes the distributions which have already been mentioned to the Department of Transportation and also to our local governments. The bill fully maintains the same distribution and recipients for highway operating funds for both state and local entities. The only distinction is that a portion of the funds will now have originated from the GRF rather than from the motor fuel tax receipts. All existing discounts and processes will continue without interruption through provision of these GRF dollars. The bill does not make any additional appropriations from other funds nor does it divert existing GRF that was previously appropriated for another dedicated purpose. In summary, this bill will provide much-needed relief to Ohioans for motor fuel purchases, ensures that funds for roadway maintenance and construction across the state remain unaffected, and creates accountability and transparency mechanisms to ensure that consumers receive the savings. Chair Stewart, Vice Chair Davila, members of the committee, thank you for your time. And Representative White and I are happy to answer any questions.
Thank you, Representative, for your testimony. First question will come from Vice Chair Davila.
Thank you, Mr. Chairman. Thank you both for coming in today. So a question that has come from some of my constituents and one that occurs to me as well, and Representative Thomas referred to this to some extent, but I'd like maybe some additional commentary on it. how can we be sure that this will actually be enforced at the local level by retailers? And part of the reason I ask that is we've been through a process here recently with some degree of frustration on enforcement of Medicaid and the types of things that we put in place to try to get fraud, waste, and abuse under control. We've done our part as a legislature. We are going to do our part as a legislature today on this matter as well. How can we be sure that on the executive branch side, whether it's through the Attorney General or other elements, that this law will actually be enforced so that consumers at the local level see the type of relief that this bill is designed to provide.
Vice Chair Davila, thank you for the question. I think we have two approaches here. I think we have the carrot and the stick. We have the market forces. When the retailers get the credits, and they're required by this law to bring the price down. The market forces are, as we all know, if there's one gas station that has a lower price compared to a gas station on the joining property perhaps that has a higher price, people go to the lower gas station. And then when you sell more, then you make more profit. So that is the carrot. And the stick is the aforementioned, what we've added, allowing the Attorney General to pursue violations as infringements of the Consumer Sales Practice Act, as well as the tax commissioner may consider violations in all licensing determinations. So we feel that's the stick, and we feel like the retailers are going to comply. Great. Thank you.
Follow-up?
I did want to add, if it's okay, Chair Stewart and Vice Chair Davila. So, you know, certainly yesterday the testimony by interested parties and others was helpful to show how rapidly the gas prices change, sometimes within a day, several times. But the mechanisms for looking at the inventory before and looking at the inventory after this takes place and the reporting structures, which I think there's been good input from the interested parties and we'll see the final product. but I think there's good mechanisms in place to help show what's being bought, prices paid, and things like that that will help us see clarity. And I do believe this has been an industry that has stood by Ohioans for decades, if not hundreds of years. We can count on reliability and trustworthiness, but we also have the trust but verify.
Representative Johnson.
Thank you, representatives. I think everybody in this room wants lower gas prices, including myself. But my question is, how did you derive it to $725 million? Is that an estimate of what we think that's going to take away from ODOT? And, you know, I'm hearing conflicting numbers on that. three years ago I sat on transportation committee and ODOT said we are into the point of being underfunded where the fuel tax doesn't cover the needed cost for our roads and highways and they were supposed to do a study on how to increase funds for that so my point is I don't want to take away any funding if anything I think we should err on the side of putting too much funds in instead of not enough. So I'm hearing $750 million would be a closer estimate to err on the side of being even. But could you guys explain just how we come up with the numbers?
Yes. Thank you, Chair Stewart, Vice Chair Davila. If we look at last year's fourth quarter receipts, each month we have that documented, it came up to about $690 million. So anticipating that there might be some border crossing, you know, here and there, more volume, demand, as people were like, I'm going to fill up before the last day, whatever. There's about a $35 million estimate in there over what we experienced fourth quarter last year. Now, I think lots of people are looking for evidence and documentation to see if we need to adjust that number. And should there be the need at some point in the future, that is discussion, but right now we know what we have, and that is fourth quarter, it was about $690 million. So this is a $35 million buffer there. Follow up? May I just add one item?
Thank you, Chair Stewart. My understanding is the GRF is not replacing the revenue on a per-gallon basis. It is supplementing the revenue to make the revenue equal to a standard 90-day period of the fourth quarter. And typically 1.7 billion gallons are sold in a quarter. So I believe that's how this number was derived, with the corresponding dollar amount.
Representative Young.
Thank you, Mr. Chair. I appreciate your comments this morning. It's just a simple question, and you may have addressed it. we have a number in the legislation, but it's flexible. Is that correct?
Chair Stewart, Vice Chair DeVilla, I think we are voting on this number. So any further discussion on needing to adjust the number? And if the number comes out of the Senate, which they're meeting at 1030, and we really don't know what's happening over there. So those that have been lobbying to say we need more, I'm assuming they have given documentation. so we will see what happens in the Senate. But as of right now, the number we're going on in this bill is the number that is viewed as $35 million more than last year's fourth quarter disbursements to the fund.
Follow-up?
Yes. The consumer is volatile, right? It's very hard to dynamically score that from one year to the next as far as any spending is concerned. And we know that consumer spending is up, So my question would, if we go beyond this figure, do we come back and adjust it?
Chair Stewart, Vice Chair Davila, I believe that would be a discussion for when we get back or in the budget next year. Based on what gets voted on today, we will see what happens today. Okay, good. Thanks.
I want to ask one question, just kind of level set and make sure we're all talking at the same proposal. Last week, there was obviously a proposal made. There was a lot of discussion about where the funding for this might come from. There was talk about the rainy day fund, budget stabilization fund. There was talk about the ODOT surplus. This bill, actually, though, to my understanding and my reading, is it's not taking money out of the highway fund. It's not taking money out of the rainy day fund. It is using surplus general revenue funds that have accrued since we passed the last budget based on higher than estimated receipts and good fiscal management. Am I on the right track?
Chair Stewart, absolutely, you're on the right track.
Thank you for that. Ranking Member Sweeney.
Thank you, Chair Stewart. Thank you both for being here today. I agree that we all want to lower gas prices, and we all also are aware of the issue that in every state that has done this, that had a process, the more than 48 hours in testimony that has done this, they have saw that part of the savings has been captured by the gas companies. Part of that is just because this is complicated and where the tax is applied, that it's not easy to transfer that to the people or intentional, to Reptavilla's point, intentional fraud to go after that. And it seems that you do acknowledge that because in your original bill at the press conference and in the bill that was originally introduced, you had the belief, or it was in the bill, to require that you needed more than just a statement that gas companies want to pass this on, and you suggested having receipts so that Ohioans could actually see the itemized receipts to go forward. What happened in Senate testimonies we heard from gas companies is that that could not be implemented by the timeline of this bill. I had discussions after that. They said it would take three weeks. And so my understanding is that the updated bill, instead of trying to fix it, work with that timeline, decided to remove the only real transparency piece that originally you guys as a sponsor thought was an important piece to ensure that would be passed on. My question is, why did you agree to remove the transparency piece so we could see itemized receipts? And why would you not wait a few weeks to figure out so that the $726 million all went to Ohioans rather than possibly $300 million going to gas companies?
Chair Stewart, Ranking Member Sweeney, I think the reality is how many individuals in this room got a receipt the last time you were at the pump? Most people aren't even taking the receipt. The ability to post a signage that tells them exactly how much they're paying on fuel and tax, it sounds in theory great. But as you heard yesterday as well, we also don't even know the gas that was actually put in their tank that's been sitting in a storage tank that was bought three weeks ago at a different price, but now is being pumped out and charged at a price at a pump. There was a lot of concern that what are we actually telling people and can a receipt actually capture that in the moment through programming? The mom and pop gas station concern was also very real. And so I think by posting how much money is supposed to be being charged for the actual tax that is no longer being charged and looking around across the corners, you know, we know people drive three blocks just to save two cents. I certainly will go out of my way when I know there's gas cheaper at another place. The market forces as well as the accounting that the and we see what happens in the final bill that comes out this morning You obviously know a lot more detail than most of us in this room So when you look at that and you see is there in fact going to be the accountabilities based on what the law already requires our automobile I sorry our fuel dealers to produce And are they using that system as a check and balance, and is it enough? And we'll have the opportunity to see that very soon.
Yes, please.
I appreciate that, and I would just make a comment for a quick next question is having a sticker tell you what the one cent should be doesn't do anything if you have no actual way to verify that with the receipt. But the other big question that got highlighted that, to my knowledge point, is not being addressed within the new version of the bill, and that was somebody from the industry themselves. We heard that one of the biggest causes that impacts all of us, whether you're a driver or not, is the issue of diesel and truck drivers. They brought to attention that something I wasn't aware of is that truck drivers do not pay the same way that everyone else does, or even diesel truck drivers are using it for personal use. And because of this issue, they have seen Georgia, who has done this before, mis-aite this deadline and this requirement, and they actually, in that state, had none of those savings go to truck drivers. In Connecticut, because of this issue, they actually carved diesel out, and that is why we're here today. The suggestion and the request from that individual was to put language in here committing that we would address that the tax commissioner would meet these deadlines so we can be confident that we are actually making sure that truck driver's savings gets to them because what happens if we don't do that, it goes to every other state. And specifically, truck drivers are cut out, but guess what? The money we spent goes elsewhere. And so are you going to address that and give the confidence that this will actually go to truck diesel drivers? And if not, why will we not include that and give confidence from the industry themselves that came in yesterday to testify?
Chair Stewart, Ranking Member Sweeney, My understanding is we've had discussions with the trucking industry, and they are on board at this point. I apologize. I didn't see the testimony yesterday, but to the best of my knowledge, we're on board and we've had those conversations. One of our members is a former owner of a trucking company, so he's very involved and has been helpful in that manner.
Thank you.
May I add something, Chair Stewart, Ranking Member Sweeney? What I did want to say is that I learned a lot about this by asking some questions earlier this year. IFTA, the International, somebody help me, Fuel Trucking Association. I'm not exactly sure, but basically I didn't realize this. You don't actually, if you load up in Ohio because it's cheaper and you're a trucker, well, you don't necessarily get that cheaper price because it's about where you drove. The miles you drove, you are responsible for accounting for that. And then that money goes to the states based on the gas tax that was there. So I think the lessons learned in some of these states, and more states are jumping on this bandwagon to do it, some have just had an executive order with no discussion. But when you look at the fact that this has been brought up, the tax commissioner and their team are watching, they were put on notice, please don't do anything about this, whether the final bill ends up with language, but the gentleman himself said, I don't know that this is a legislation thing, We just need to make sure that the tax commissioner does this. So, you know, we will know a little bit more soon. But being aware of that and making sure Ohio truckers get what they deserve is important.
Follow-up? Representative Abdullahi.
Thank you, Chairman. Thank you. I'm sure you know this, but for those who don't know, our state tried to generously give the Brown Stadium money. and that money is still sitting in our state accounts because Ohioans are suing to stop their money from going to be used to fund billionaires. We could legally, in your bill, if we had the ability to offer amendments, amend this bill, take that money from the billionaire Haslam's and use it to provide base return.
Representative, do you have a question that is relevant and germane to the bill that we are discussing today?
I do.
Do you please get to it? If not, we're going to go to somebody else.
Yep, we're almost there. And use that money to provide base return of the money to Ohioans in the form of $150 residential consumer energy relief credit Would you amend your legislation to put that money into energy and property tax relief, such as Leader Isaacson's bill?
Chair Stewart, Representative, I'm sorry. I said a no will suffice, but go ahead.
Representative Abdullahi. I think the reality is if what I remember at the time, people saying, why are we taking money out of the unclaimed funds? People are suing about it. So I find it interesting that we would want to, as a legislative body, take action on something that many in this room here argued articulately against. And so it seems like the courts are working through that process, and it does not seem wise for us to do something when what has happened already may be undone.
Representative Gerald.
I have a follow-up, Mr. Chairman. Representative Gerald. This is just a campaign strategy.
You're not giving property tax relief or energy relief to constituents. You were not recognized for a follow-up. Representative Gerald, do you have a question?
Thank you, Chair. Today we're here to address the affordability that all Ohioans want us in this body to do on their behalf. First Energy, Columbia Gas, and other public utilities have proposed the base rate increases by more than the $3 that many of Ohioans would benefit from in this bill. Would you support amending the bill to do a freeze on all energy and utility rate increases so that when we think about the affordability package that we all want to see happen for Ohioans, we know that we can actually do more for Ohioans? Chair Stewart, Representative Charles, thank you for the question. And, you know, at this time, you know, while we understand the utility prices continue to be a challenge for our constituents, you know, right now this bill and our focus is laser focused on the gas tax. So at this point, yeah, we would not entertain that amendment.
Follow up?
Chair Stewart, Ranking Member Sweeney.
I'm sorry, Representative Gerald. Based on what Ranking Member Sweeney told us, it does not appear there's going to be any opportunity anyway for amendments. So it seems kind of a moot point to talk about. Follow up? No. Representative Picle Antonio.
Thank you, Chair. I also have been out knocking doors, just as you both have, and I know that I do definitely hear from community members about gas prices, but I continue to hear as the number one issue property taxes, people drowning in property tax bills. And so, I mean, we know that there was a joint property tax commission. There have been more than a dozen bipartisan bills that have been introduced to address property taxes. Lots of those proposals are very popular. They have been implemented in other states with good success. So my question is, if this is a bill that is about bringing emergency relief to Ohioans, would you consider amending the bill to include the property tax relief that is outlined in Leader Isaacson's bill that is one of those bipartisan proposals that we have not really addressed this General Assembly?
Chair Stewart, Representative Piquel Antonio, it's good to see you. I would just say that the gas tax relief goes to everyone, whether you own property or not. And I don't have any specifics on the proposal related to that particular measure. but at this time it appears that we are focused on giving relief to every single Ohioan and every single trucker and we've done a lot with property tax and I am a huge supporter of everything we possibly can do to bring property tax relief.
Representative Troy, do you have a gas tax question? I don't know if we're going to get one of those today, but maybe.
Thank you, Mr. Chairman, and thank you, sponsors. Obviously, you know, we all want to bring relief to our citizens and all that. But, you know, part of me says, you know, we're whistling by the graveyard here. You know, if we need property tax relief, it's probably because we have property tax laws that maybe over the years weren't as fair and spread that burden evenly. But we haven't caused this problem. Two-thirds of Ohioans oppose this escapade that's taking place in Iran, which is what's causing this. and I think we need to say that 90 days from now, when these prices go back up, I mean, so I think, you know, I think people from both parties are saying enough is enough. Let's bring that to an end. And so that is the real reason gas prices are high in Ohio. Now, I find it interesting that we're able to find surplus funds to deal with some of these issues, but when we brought some stuff up earlier in the year about increasing the homestead exemption, about caregiver tax credits, about expanding the subsidies for daycare. It's always like, well, we don't have the money. We can't be fiscally responsible. For now, all of a sudden, we're able to find 750. I guess I'd like to know how many more hundreds of millions of dollars we have in these surplus funds that we can maybe address some of these other issues, especially the issue of, which is now taking property taxes off the front page, data centers, which right now are driving up electric bills. Could we possibly continue this rescue mission for Ohio consumers and maybe include something either in this legislation or quickly enacted legislation to address the issue of requiring data centers to generate their own electricity or pay for it all so it doesn't get passed on to the consumers' electric bills? If you found a question in there, you're happy to try to answer it.
Chairman Stewart, Representative Troy. Yes, we understand data centers are an important issue, and the General Assembly continues to work through those. Regarding affordability, this General Assembly has already made many, has already had many achievements in terms of with the state income tax, with reducing the property tax over the next three years by $4 billion, by renewing the expanded summer sales tax holiday, and $350 million in direct property tax relief to recipients of the homestead exemption. So I believe we've already made significant inroads in those areas that you mentioned.
Other questions from the committee, dare I ask? Representative Gerrals.
Thank you, Chair. This is a gas tax question, I promise. My question to you, and I really want to unpack this. Obviously, we are bordered with Indiana, Pennsylvania, Michigan, Kentucky, and we passed this gas tax holiday. And there is going to be literally people from all around us coming to take advantage of a deal that we are trying to do for Ohioans. how can you be for certain that Ohioans will benefit from the gas tax holiday without the necessary consumer protections built into this bill? If I'm driving from Michigan going into Ohio to fill my gas take up, how does that help us? Chairman Stewart, Representative Gerald.
By the way, it's lovely to see everyone. and it's good to be with you all this morning. I did want to point out that Indiana's gas tax is much higher than ours. They have two separate taxes. Added together is like 68 cents, I believe, is what my staff looked up. Right now it's 47 cents cheaper is what I was told. And recently somebody who was in Indiana told me it was 47 cents cheaper. I don't know what the border states are going to do. Ohioans are going over there now and getting their gas. People are going across the border. We live and breathe across our borders, whether it's a community or a state. We can't control it. That's why there's $35 million more put in there to try to give a little bit of a hedge to adjust for that.
Just have one comment, Representative Charles.
If in fact those people do come across the state lines hopefully they make some purchases in the stores as well and that will lead to some sales tax revenue for us Thank you Chair So currently in the bill just so I hearing you correctly
there really isn't any way to ensure that the monies that we are, this gas tax holiday, ultimately reaches Ohioans because there are Ohioans moving across the border getting gas in Indiana and Kentucky, and we can't necessarily control how people travel. Thus, we don't really have a true understanding of the fiscal impact and the savings that Ohioans are going to benefit from from this gas tax holiday if everyone else is also benefiting from it.
You're correct.
Okay, thank you. Representative Glassburn.
Thank you, Mr. Chair. Okay, may I correct something, Chair Stewart, Representative Villa, there are measures of accountability in the bill, so I don't want to leave that standing. There's measures of transparency and accountability in the bill that we are talking to you about today. We have no way of controlling who shops in our stores right now for anything. And so that's kind of a hard thing to prove. Who's going to benefit? It's who's buying gas in Ohio. But most of them are going to be Ohioans.
Representative Glassman. Thank you, Mr. Chair.
So the Penn Wharton Business School, which amongst other things is famous as President Trump's alma mater, did an actual study on this and said about 79% on average goes back to the residents of the state that enacts these holidays, gas tax holidays. But the range of outcomes is between high 50% to as much as high 80s. So which is it in terms of this bill? You said at the press conference it was going to be about $80 over the three months. Is $20 of that $80 going to other entities, or are we doing $20 or $30 or $40 above the $80 going to oil companies, out-of-state people, whoever?
Chair Stewart, Representative Glassburn.
When you have studies that compare different states' policies, it's like us talking about, you know, how much are you paying for X, Y, Z in this state? How much are the taxes? We don't have the whole context of what they were comparing. Apples to apples, oranges to oranges, bananas to, you know, pears. We don't know what that study was about and what works and what doesn't in those states. But we did build in measures for this bill to try to learn the lessons from the other states and try to put in some measures so that we can get as much relief as possible. And as we talked about, people are driving around the block to get two, four, five cents a gallon cheaper. This is going to be real savings for Ohioans. Thank you, Mr. Chair.
Yeah, the problem I have at taking that at face value is the Ohio Department of Taxation has a whopping 10 people on staff that administer the gas tax, and we have thousands of gas stations. So actually executing this, actually enforcing this, I don't want to see $300 million go out the door to oil companies and other entities. So there are other states that have done more protections allowing the consumers to have a right of action to say, I got ripped off. We don't have that in this bill or whichever bill we're talking about. I lost track. It sounded like it was Rep Sweeney's bill at some point. So why are we not doing a maximalist approach with consumer protections, with putting more money in the AG or the Department of Taxation to actually execute this? Why is this silent? And it sounds like what protections are there are being pulled out.
Chairman Stewart and Representative Glassburn.
So to your comment about, you know, other states doing it, so Indiana is doing it. It's one of our neighbors. So, you know, same thing can be said about them. There may be Ohio citizens going there and taking advantage of their situation. Georgia just passed it yesterday. So other states are doing it as well. and in terms of accountability, we feel that we've had conversations with the Tax Department and the Attorney General, and they feel confident that these are sufficient standards for them to do this job. And there are penalties, Chair Stewart and Rep. Glassburn, in the bill. There's penalties and courses of action for people to take to ensure accountability.
Representative Sims.
Thank you, Mr. Chairman. Thank you for your testimony this morning. Your legislation addresses a portion of the cost of gas. So in the interest of not really being trampled by the big elephant in the room on my way out, the largest issue that is causing the price increase is the closure of the Strait of Harbus and the war in Iran. Even the OBM says in a September report that inflation remains elevated and ongoing geopolitical developments, developments, particularly in the Middle East, continue to contribute to the uncertainty and higher energy costs. Why don't you include a directive in this bill telling the president that we want him to end the war and we'll commit to amending your legislation to take a stand with the rest of Ohioans calling for the end of this crisis.
Chair Stewart and Representative Timms.
Thank you for the question. So we are not responsible for our U.S. foreign policy. It's our job to take care of the citizens of Ohio. We are focused on helping them in this area with the gas tax, and we feel that this is something we can control. We have the funds to do it, so we feel this is the correct path at this time.
Follow-up. Thank you, Mr. Chairman. I mean, the directive is free, and we could add it, I mean, if you, as a matter of fact, Representative Russo has an amendment doing just that. So there's no additional cost. There's no additional cost to add that, given that directive, because I think that is a real difference maker.
Chair Stewart, Representative Sims, I believe all Americans don't like war, and we've passed infinite number of resolutions and I'm just wondering if there's any accountability of if any of them have actually done anything because the state of Ohio has no say in federal national policy. I encourage everyone to contact their congressional members, their senators, and effectively lobby as much as you can on your views on people who can actually make a change there. Last question from ranking member Sweeney.
Thank you, Chair. I want to go back to the first question that was asked that is actually on my list from the Vice Chair Davila. As we were all intimately and actually really appreciate your work on the Medicaid fraud bill that ended up being a very wide bipartisan bill, one of the main things that this body decided to believe the best way to protect Medicaid consumers, protect fraud within that, was to mandate the Attorney General when there is knowingly fraud to go after them, to mandate Medicaid to go after them, to mandate prosecutions, and because we did not believe, or that bill did not believe you can go forward. Yet, when you compare it to what we're talking about, which would be knowingly, if a company knowingly, purposely, took up to $350 million of taxpayer money that's supposed to go to them, that we leave that permissive. permissive. The tax commissioner, there's 10 of them, if they have the bodies that they can or that they may if they feel like it. The attorney general may go after them. So why was there the choice to have permissive language when we just recently felt that that was the way to prevent fraud to have shale? If this was really about making sure consumers got the full benefit of their taxpayer dollars.
Sure. I can talk.
Chair Stewart, ranking member Sweeney.
I think that the reality is this is a 90-day event. The speculation that $350 million or whatever you were saying, $725 million, whatever the fraud would be, this is dispersed throughout all kinds of gas stations around the state, all kinds of people, schools, industries that purchase gas and diesel. The mechanisms of tracking are there. The tax commissioner will do what it takes, and the attorney general, because they both spoke into this bill and what they said they needed, and so we believe that the protections are there, because if there's something there, there, there's going to be documentation to be able to prove it. And that's what we are going on.
Can I just make one comment? It won't be a question. I hear you, but no matter what's going to happen, we're going to have a different tax commissioner. We'll have a different attorney general. Some of you might not like those people, and so that's why, if we actually cared about enforcing it, it's shale because those people change.
Representatives, I'm not aware of any other statute in which we somehow mandate that an executive, you know, that the attorney general prosecute or not prosecute. They've always had prosecutorial discretion as to whether a violation warrants being pursued or not. Am I on any kind of a right track? Chair Stewart, you are correct.
And Ranking Member Sweeney, I was just going to add that, yeah, those people take an oath to protect our laws and to enforce our laws. So I have full confidence that they'll do their job.
Representative Rumer.
Thank you so much, Chair. Appreciate you guys bringing this in, having this discussion. We've heard some questions about do Ohioans actually save money because somebody from Michigan or Pennsylvania would be driving in. I think the answer to that is obvious, but I wanted to just go over a couple numbers, see if you're in agreement with this. I believe the average driver in Ohio drives about 12,000 miles a year. The average car gets about 25 miles a gallon. If you take that, take a quarter of that, calculate it out, Now, that says if you drive just the average, you're going to save about $63. It's my belief, and I believe that you've included the additional dollars associated with this, because people might wait to gas up, and they might gas up right at the end of this, that that number might be much closer to the $80 that Representative White mentioned. If you have two to two and a half drivers, depending on how you average this, that means each family in Ohio is going to save somewhere around $200 from this. Would you agree that those numbers are within the realm of reason?
Chair Stewart, Representative Romer, I would never argue with an accomplished CPA such as yourself. Thank you. I appreciate that.
Just as a very brief follow-up, I believe that when somebody drives here from Michigan to buy gas, or Kentucky or wherever it might be, that retailer that's selling it is going to be making their profit margin on that gas, benefiting Ohio, benefiting taxes. As Representative Thomas so ably pointed out, that person's also going to be buying snacks or whatever they're going to be buying, and there's going to be sales tax generated. So I believe that there are benefits over and above just the gas tax cut here that's going to benefit Ohioans. Thank you.
And Chair Stewart and Rep. Romer,
what we heard yesterday was a lot of the profit of these gas stations is in the sale of other items.
Speaker Brotan Manning.
Thank you, Chair, and thank you both for your testimony today. I can remember, maybe it was back in the late 90s, early 2000s, a couple of the gas stations up our way were charged with the fact that they were gas gouging. It was a law in place. I don't know. I assume that law is still in place. I don't know if you know that. If not, maybe we can find out an answer later. But, you know, those laws are in place if people are doing anything along that line that would be doing something inappropriate.
Chair Stewart, Representative Manning, I think the reality is, as we heard yesterday,
the amount of accountability at the pump and in the stations every single day and the receipts that must be maintained, there's a very clear track record and trail. And so we are going to have that. We're going to have some extra measures, and those laws, to my knowledge, have not changed. There are still requirements, and there's still the ability to go after people that are price gouging. Follow up.
This concludes the first hearing on House Bill 1019. Thank you, representatives, for your testimony. Thank you, members, for your questions. Seeing no further business before the committee, the committee now stands adjourned.