June 3, 2026 · Ways And Means Committee · 11,143 words · 18 speakers · 143 segments
This meeting of the Ohio House Ways and Means Committee to order. Robert, as usual, please call the roll.
Chairman Romer. I'm here. Vice Chair Thomas. Here. Ranking Member Roy. Here. Representatives Click. Here. Daniels. Demetrio. Glassburn. Here. Lear. Here. Richardson. Checked in. Rogers. Checked in. Santucci. Here. Seagrass. Here. Representative Thomas.
We have a quorum. We're going to proceed as a full committee. Please check your iPads. Let me know if you have any changes, additions, deletions to the minutes. Hearing none, the minutes are accepted. Before we go into committee, we've got a whole bunch of people to recognize in here. I think it's a record for us. We're going to start off with Kian Stone. Kian, come on forward. We're going to recognize Kian just real fast. Kian is joining my office. He's an Ohio State student. He's getting ready to apply to law school. Kian, thank you for being here. We wanted him to have an opportunity to see Ways and Means in Action. He said he's heard that it's the best committee at the House, and he'll be able to confirm it after today.
So thanks, Kian.
Thank you. Okay. Now we are going to recognize somebody that's probably stronger than I am. We're going to start off. We have Dave and Shelley here, Smith here, but they have brought their daughter Ashlyn down. Ashlyn, can you come forward, please? Ashlyn is the 225 pound OHSAA powerlifting champion for Ohio. And very impressive. My family, we have a couple powerlifters in my family, but she's been competing. She started training. She found out that she's stronger than most people. She was able to be very, very dedicated, go on to OHSAA and become a state champion. And with that, Ashlyn, anything you'd like to say?
I just want to thank you guys for giving me the opportunity to be here.
It's really fun. Well, we love recognizing our state champions, so thank you so much for being here. She's from Norton. And now I'm going to turn to our Vice Chair, Thomas. He has a couple folks he'd like to recognize also.
Thank you, Chair. I've got one right now and then another group coming in a little bit later, but Dylan, come on up. So Dylan is a sophomore in Madison School District, and actually in Lake County, but his mom works in our district and shadowing me for today. So if you'd like to introduce yourself.
Like he said, I'm Dylan Fairbanks. I'm a sophomore at Madison High School. I have a potential interest in going into government, and I'm incredibly honored to be here today. So thank you, Representative Thomas.
Thank you for having me. Thanks for being here, Dylan.
Okay. With that, we're going to move into House Bill 504 to enact the Calculated Adjustments for Property Surges CAHPS Act. we're bringing it forth for its sixth hearing. We hear bills a lot here on this committee. And I'd like to recognize Vice Chair Thomas for the purpose of a motion.
Thank you, Chair. I move to amend House Bill 504 with L underscore 136 underscore 3315.
And the amendment's in order. Please let us know what's in it.
Awesome. So this sub-bill does three different things. It hits on all the policy issues that we were presented with by prior testimonies. One, it changes the effective date, It pushes out the bill's impact until tax year 2027, calendar year 2028. It also specifies and clarifies that the bill will not impact fix some levies. And it also excludes a first time levy from being impacted by the bill's effect in that first year when the voters have approved that levy Essentially hitting at all of the concerns by the opponents so far and moving the auditors association for example into an ip status any questions on the amendment
any objection to accepting it hearing none the amendment is accepted we're now going to call forth nicole marshall with west westerville city schools for purposes of opponent testimony and
whenever you're ready. Thank you. Actually, Chair, if it's all right, I have some handouts I'd like to give to committee members. In my haste to put together information and get it uploaded, I inadvertently left out some graphs. Okay. If you give it to Robert, we'll distribute. Yeah. Okay. Is there any way we can distribute it now so that we can, because It's kind of hard to follow along without. I'm sorry. I normally have a PowerPoint presentation of some kind that I can share. So thank you, Chair Romer, Vice Chair Thomas.
And by the way, just like we do have a five-minute time limit.
Yes. Just to let you know. Thank you for the opportunity to provide testimony on House Bill 504. I am testifying today as an opponent. While I appreciate the intention of the bill, and for the sake of time, I do want to read my testimony word for word, but I do want to call your attention to I did have an error in my haste to submit my testimony. I did not realize that the bill was granting the authority for changes to the county commissioners versus the budget commission. So I've revised that statement. As a school district, Westerville City Schools, I'm the treasurer and CFO. I also want to thank Representative Lear. She's one of the four state representatives that represent parts of our school community. We also enjoy representation from four state senators. We are located in both Franklin and Delaware counties, and our district is subject to House Bill 920. And I know when we're having a lot of conversations around property tax reform, we tend to talk in terms of absolutes. And I just want to make sure that the committee understands, and I do a lot of education to our local community about House Bill 920 and how that works. So what you have in your packet, these colorful tables, is part of a presentation that I give to our community to explain House Bill 920. The first document there, this is my neighborhood of 10 properties, my county of 10 properties, but two properties in each neighborhood. and the 2022 value and tax revenue table shows each property's value and what the effective tax rate is for a school district not necessarily ours but and then what the property tax bill and i should mention this is very simplified it doesn't look at rollback and all of that stuff i didn't want to complicate the matter and so when we reappraise that property so in 2023 our school district had a reappraisal in both Franklin and Delaware counties, the county auditor took that total revenue amount, so in this case $189,000, and it made sure that the schools continued to receive that $189,000 on those voted levies for our operating levies. And so what they did is they adjusted that tax rate down, so instead of being 47.6 percent, or 47.6 mils, it dropped to 35.21 mills. And so that effect to the property tax bill to the homeowner as you can see, while the schools don't necessarily receive any money on any new money on those carryover properties, even though values went up an average of 36%, individual homeowners actually saw either large decreases or large increases in their property tax due And that is how House Bill 920 works We do revenue growth on new construction in the case where it not abated or diverted through incentives and things like that. And so in that case, new construction, if there was a new property that came on, it would assess that same tax rate, that 35.21 mils, and then it would have a tax due based on that calculation. So that's the growth that we receive on those voted levies should there not be any abatements or incentives or anything like that. There's about 200 school districts, I think, today that are still subject to House Bill 920. And I do think some things will change. I'm not quite sure with all of the conversation around the property tax reform with the 20 mil floor and how all that works. so then going on to the next table is our inside millage so this is what we talk about when we say unvoted millage our portion of that 10 shared mills across our communities is 3.8 mills and that doesn't change so whatever increase happens as a percentage to values that 3.8 mills of that total millage amount, that doesn't change. And so we do see a little bit of growth on that inside millage. And I understand that there was legislation recently that was enacted that would limit that growth to what was inflation over the last three years. So the very last slide is the outcome of what that looks like. So in this example, 40% of property owners actually saw a decrease in their tax bill, even though values overall increased by 36%. And the revenue increase to the school districts in this case would be 3%. And that's based on, over the last three years, the first opportunity for revenue growth. And so I appreciate the intent of this bill. My concern is that as a House Bill 920 district, will we see the opportunity for our revenues to be reduced, even though we're not seeing additional revenue growth from those value increases that some of the 20 mill floors districts do? I hope that makes sense, and I'm happy to answer any questions. Thank you.
My compliments on your timing. You were within a second.
I know, I know.
And with that, we'll open up for questions. Do we have any questions for the witness? Ranking Member Troy.
Mr. Chairman, yes, and thank you, Treasurer CFO. So, yeah, you mentioned the fact that I think a lot of people haven't figured in that, you know, the 920, how that has basically with the reduction factors. If you're not on the 20 mil floor, that really probably the only spike you got would have been inside millage, your 3.8 mils, correct?
Correct.
and everything else pretty much just got leveled back. So you're concerned because you go over two counties, and I have a concern. The problem, I was county commissioner for five terms for 20 years, and the last thing I ever wanted to do as a county commissioner was somehow get my hands into determining what school district revenues were in terms of taxes. Do you think we're kind of, with a bill like this, moving onto a very slippery slope where we kind of allow county commissioners who normally are the gatekeeper for things like developmental disability levels and senior citizen levies and mental health levies and all that but allowing them to kind of get in to make an arbitrary decision in terms of rolling back valuations which don really relate as you pointed out to the taxes, when really it's not part of their jurisdiction. I mean, so are you concerned that somehow, you know, county commissioners now are entering into kind of a property tax oversight over a lot of entities that really are not technically part of county government. Chair Romer and Ranking Member Choi, thank you for the question.
So I do want to say I think we have great community partners with our counties, our townships, our cities, our villages, and all of that. I do personally have a concern about because we cross two counties, we could have two different county commissioner groups treating things differently. I'm not quite sure how that would play out as we're actually calculating all of this, if that would automatically apply to Delaware County, because Franklin County is our most populous county. And when you ask me if I'm concerned, I think we do have great community partners, but I do have concern for people who aren't elected by our school community making decisions that impact, potentially impact the resources to our school community that our local voters have approved, not having any say in who sits on those seats and who represents them in that. Thank you.
Other questions? Representative Reynolds.
Real quick, thank you for your testimony. I have both a district that is in two counties, in Summit and Stark, as well as my home district, which is not at the 20-mil floor. so I'm familiar with what you're talking about. I have a question that you probably have an answer to because you knew you're 3.7 mil of inside millage. Could you tell me quickly how that's calculated? How did your district end up with 3.7 mils of inside millage without taking too much time, please?
Chair Romer, Representative Daniels, thank you for the question. To be honest with you, I'm not sure anybody has the answer to that question. My understanding, as I've researched this thoroughly, is there are 10 mills to be shared across jurisdictions that overlap each other. And so our portion of that 10 shared mills is 3.8 mills. I do think there's a small piece of inside millage actually out of the 10 through our multiple jurisdictions that hasn't been levied to this point. It comes up in conversation every now and then. But it was determined long, long ago before I ever even thought about becoming a school treasurer and CFO. But thank you.
Let me add just a little bit of history on that. the calculation of the 10 inside mills was done approximately 100 years ago now, and it was based upon the bifurcation between the county, the local jurisdiction, and the schools primarily, although there are a number of other small inside millage pieces in some counties. So it's something that's been done for 100 years. Over the commission that I led with a number of the people here, we looked at possibly going back and renegotiating that. That was not something that we wanted to take on at this time. Other questions?
Just to add on to that, and I think it happened when at one point the inside millage was 15 mills in the state of Ohio and then it was changed down to 10 mills way back almost a century ago and then these calculations are made And in order to change who gets what, you'd have to have somebody say, I'll give up some of my inside millage so you can have it. Nobody is that noble anymore. Now, as I always say, the one thing in Lake County, we only have 8.9 mills because some very smart commissioners at the time, when we raised the sales tax, dropped our inside millage from 2.1 to 1.0. So people were only paying 8.9 inside mills. and I had to make sure, though, that we had cover going back to the 1930s because I had to say, oh, good, we'll grab that 1.1 mils, made sure that they couldn't so that the voters did get that break. Thank you.
Vice Chair Thomas. Thank you, Chair. Thank you for coming in today. Two points. First one, to answer your question during the testimony at the very end, no, should House Bill 504 pass, should values be above 15% and should the commissioners decide to prevent unvoted spikes, your school would not lose money. You would not decrease in your revenue. The whole intent of the bill is to lower future increases, not actually cut or decrease the amount that you're currently receiving. And I guess on the second point, I really do appreciate your testimony because I think you're actually proving the point of the bill. And I say that because your school is how all schools should be. I have 23 school districts. 22 of them are at the 20-mil floor. Those residents, when the values went up by the 34%, their tax bill then went up quite a bit more. Your residents, correct, did not. And so we're actually, with this bill, speaking much more to the residents whose bills have spiked and whose school districts are impacted by those large unvoted increases. So I know you're here testifying on behalf of your taxpayers, your school, but for the now roughly almost 500 schools that are out there at that 20 mil floor, what would you say then to their taxpayers who could benefit from 504 still paying more to their schools, their townships, their cities, and their villages and their county, but who would not then see that huge unvoted spike?
Thank you for that question, for those questions specifically. So, again, House Bill 920, I have been testifying and honestly begging for years for that to be fixed because of the disparity that it creates among our community. While, you know, I continue to tell my taxpayers we're not receiving additional funds from those voted levies on their properties, they are paying more in their tax bill. I personally, 2023 reappraisals, I saw a $4,000 increase in my tax bill. My value went up by 80%. My tax bill went up by 35%. My neighbor down the road, value went up, I think, 20%. He saw a $500 decrease in his tax bill. And knowing what I know and how all this works, but I have people knocking on my door, like me, who got those large tax bill increases saying, hey, and I also, there's been a lot of conversation around property tax reform. I actually think you came to our community and talked about some of the stuff that was being affected by the 20-mil floor that doesn't apply to our community and our schools. And so trying to help educate our community on what that looks like. So I think House Bill 920 doesn't work the way it was intended to when you have such large increases in values. My concern about seeing a decrease with House Bill 920 in the legislation in 504 is it clearly states that it based on value increase of 15 It doesn talk about tax revenue increasing by more than 15 So I would love to see an amendment that would say tax revenue versus valuation increases if that the intent behind the bill. Because I think we have 88 different county auditors that are going to interpret that 88 different ways. And I'm sure we have many, many legal councils around the state that are also going to interpret it in different ways. To your other question about the 20 mil floor districts. I've never worked in a school district on the 20 mil floor, but I did grow up in a very rural community in poverty, and those districts are at the 20 mil floor. Our state funding for schools very clearly requires that districts collect 20 mils to be able to collect those funds, but it also is calculated in a way that as our community looks wealthier through property values in resident income, the state decreases its share of funding to our schools and in case the funding to our schools overall, especially when we have an out-of-balance formula that doesn't count for inflationary increases and the cost of what does it take to educate a student. So I think about where I grew up, northwest local schools in McDermott, Ohio, I actually grew up in Lucasville, they haven't been on the ballot in years for an operating levy, and the last time I think they were on the ballot was when they got state money to build new schools. I was in eighth grade, and I do worry about that community. They have a lot of – there's just a lot of hardship down there, and the schools are very important to that community, and I worry about what all of this is going to look like for them and the neighbors in that area.
Follow-up? Representative Glassman.
Thank you, Mr. Chair. So at the beginning of your most recent response, you hit on the main concern I have of that the valuation increase and the tax increase can wildly be different. And that this bill should, if it goes forward, should it attack the tax increase, not the valuation. Precisely because that's what we're concerned with. We're trying to prevent taxes from going up, not the valuation. It's just how we administer it. So in the sub-bill, the amendment that was offered today, it did exclude fix-sum levies and bond levies. How does it play out in a district like yours if those are excluded? I've heard some commentary that it still will have some problems, and the district like yours is entirely how my districts operate, all or above the 20-mil floor. Do you have the ability to give some commentary on how that would play out?
Sure. Chair Romer, Representative Glassburn, thank you for that question. So my understanding, if it only applies to fixed sum levies, that would mean those emergency levies or other fixed sum type levies. The fixed sum levies are out of this. Yes. So it would not apply to those. Yes. or the bond issue, which I do appreciate the legislators continuing to be mindful of how all of this property tax reform affects our bonds and our bond rating and all of that. But that doesn't apply to, I mean, a voted levy for operating, a current expense levy, is subject to House Bill 920. It's not considered to affect some levy, so it would be subject to this. And when we're talking about the value as values increase, those voted levies, I feel like the way it's written, it would give the opportunity for our taxes to be decreased. And I guess I not sure the intention of the bill is very clear and how that will be interpreted throughout our counties But, yeah, I worry that it's going to impact our district. That's why I'm here today and our community. And I continue to struggle to try to educate people on property taxes and how they work because it's such a complicated matter, and it just continues to get more and more complicated to our community.
Follow-up? Other questions? Seeing none, thank you so much for coming in.
Thank you. Have a great day.
Is there anybody else wishing to testify in person on House Bill 504? Seeing none, I would like to direct the members to their iPads. There's significant written testimony. We also have CAAO that has moved from opponent to IP, and that will constitute the sixth hearing on House Bill 504. We are now going to move to House Bill 737 to require cash payments to be rounded to a nickel. And I'm going to recognize Vice Chair Thomas for the purpose of a motion.
Thank you, Chair. I move to amend House Bill 737 with Amendment Underscore 136 Underscore 2621. And the amendment's in order, and I get to explain it.
It's very, very simple. All this does is it clarifies the bill's rounding provisions also apply to state and local government fees. Questions? Any objection to accepting? Seeing none, I'm now going to recognize it is accepted. I'm going to recognize our esteemed Vice Chair Thomas for another motion.
Yes. Chair, I move to amend House Bill 737 with Amendment Underscore 136 Underscore 2668. And that amendment is also in order and quick explanation.
It clarifies that merchants who round the final prices of cash payments in accordance with the bill's provisions incur no liability for doing so, notwithstanding any contrary provisions of the revised code. Questions, comments? Is there any objection to accepting? Seeing none, the amendment is accepted. I did not receive any testimony for House Bill 737. Is there anybody here that wants to testify in person? Seeing none, that concludes the fourth hearing on House Bill 737. We are now going to bring forth Senator Timken on Senate Bill 307 to allow tax increment financing for police and firefighter facilities. Senator, I think this is your first time testifying before us, so welcome to committee.
We really appreciate having you here. Thank you, Chairman. Chairman Romer, Vice Chair Thomas, Ranking Member Troy, and members of the House Ways and Means Committee, thank you for the opportunity to provide sponsor testimony on Senate Bill 307, which was unanimously passed by the Senate Ways and Means Committee and on the Senate floor. This bill makes a simple technical change to the revised code to clarify that local governments may utilize revenue from tax increment financing agreements for the construction of police and fire stations. As many of you know, TIFs were enacted in 1976 as a tool for local governments to utilize payments in lieu of taxes to fund various public infrastructure improvements. Over the years, the General Assembly has updated policies on TIFs to allow municipalities and townships more flexibility to leverage TIF revenues to spur development of blighted areas through incentive districts and attract businesses to their communities The City of Canton excuse me which is in my district reached out to me to share a concern they had with the law as it is currently written Recently, Canton attracted Amazon to build a state-of-the-art distribution center in a previously underdeveloped area of the city. To support the development project, the city wants to build a new fire station and leverage TIF revenue from the project to build it. However, while the revised code specifically prohibits TIF revenue to be used for police and firefighting equipment, the law is unclear about whether building police and fire facilities with TIF revenue is permissible. To that end, clarifying the law will allow municipalities and townships more flexibility when creating TIF agreements. Furthermore, developing previously underdeveloped portions of the city often requires building necessary public safety infrastructure, such as police and fire stations. Updating the law governing TIFs will help cities and townships leverage revenues that are already collecting and giving wider flexibility to support development projects throughout the state. Chairman Romer, Vice Chair Thomas, Ranking Member Troy, and members of the House Ways and Means Committee, thank you for the opportunity to provide testimony on Senate Bill 307, and I'm happy to answer your questions that the committee may have.
Well, thanks so much for coming in, Senator. It's interesting to see that we've got some legislation relative to TIPS, because you have three members of the Property Tax Study Commission, representatives Troy Richardson and myself, that made multiple recommendations, and we haven't seen a whole lot relative to that. Everything else has been acted on. So thank you so much for doing this, and with that, I'll open up for questions. Do we have any questions?
Representative Richardson. Thank you, Chairman. Thank you, Senator, for your testimony. A great idea. My question is, could there possibly be written into this, if it isn't already, some kind of limitation of the usage. The reason I ask that is because in my district, one of the fastest growing in Union County, we have a lot of infrastructure demand, and we do have growth, so we need our fire and our police. But I'm just a little concerned that if we don't put some sort of limitations, we might very well tap into excessively the infrastructure dollars, which at the end of the day, that's really important for a growing district.
Through the Chair, Representative Richardson, I understand your concern, and I'm sure Chairman Romer knows more about TIFs than most, but the TIFs are governed by an agreement, and so as I understand it, And so that agreement would then govern where that money would be spent and how. And so there would have to be agreement to put in sewer and whatever else, including building the police and fire station. But if it is something that is of strong interest to this committee, I would be willing to consider it.
Thank you. No follow-up.
Other questions, comments?
Ranking Member Troy. Thank you. Thank you, Mr. Chairman, and thank you, Senator. So in a lot of cases, I don't know if you're talking about the city of Canton here particularly, do they have a police and fire levy? I mean, because a lot of cases what TIPS do is basically redirect the money from its intended purposes for infrastructure costs and all that. So I'm just wondering, is there existing millage for police and fire being collected in Canton that has been tiffed, and now this is going to maybe allow a repayment, I guess, of that diversion?
Through the chair, Representative Troy, I do not believe that the city itself, Now, other municipalities do have police and fire levies, which I understand your concern in that regard. At the end of the day, really why this is necessary is that where this Amazon distribution center is almost 25 minutes from where the nearest fire station. And it is necessary to have accessible emergency services in an area of the city that was underdeveloped. Thank you. Thank you, Mr. Chairman.
Other questions? Seeing none, thank you so much.
Thank you, Chairman. Thank you to everyone in the committee.
And that concludes the first hearing on Senate Bill 304. And before we move into House Bill 549, I'm going to recognize our Vice Chair.
Thank you, Chair. My other guests are here. Come on up. Just want to recognize here in Ways and Means Committee the leadership of the Asheville County Board of Developmental Disabilities, where my mom is actually a community advocate and co-worker. So feel free to introduce yourselves and say hello.
Hello, I'm Toni Skirpa.
I'm the superintendent of the board.
Matt Glidewell, assistant superintendent.
I'm Amanda Clue.
I'm the director of early intervention. I'm Amanda Jackson, director of quality and community outreach. Awesome.
Thank you guys so much for making the drive up and for bringing some of the individuals here to advocate and to share today. So we appreciate it. Thank you so much for being in committee. And with that, we are going to move into House Bill 549 to regulate cigar bars and create a cigar sales and use tax exemption. And we have a former member, actually a former vice chair of this esteemed committee. Representative, whenever you're ready, please proceed, Representative Lorenz.
Chairman, you are always so kind, so thank you very much. I'm always feeling at home here with the committee, but I'll be brief in the interest of time. Chair Romer, Vice Chair Thomas, Ranking Member Troy, and members of the House Ways and Means Committee, Thank you for the opportunity to provide sponsor testimony on House Bill 549. This legislation addresses a narrow issue in Ohio law involving premium cigar establishments and how they are treated under the state's smoking and sales tax laws. The goal is to provide clear, workable rules for businesses that are already built around the sale and on-site use of premium cigars while preserving important safeguards for the public, local communities, and nearby institutions. Under this bill, a cigar bar would have to meet specific requirements. It must sell premium cigars. It must have a walk-in humidor. It must prohibit the sale or smoking of other smokable consumer products. and restrict entry to individuals who are 21 or older. And yes right now we don have that The establishment must also hold a valid D liquor permit and obtain a license through the Department of Commerce in conjunction with the Department of Health. Just as important, this legislation includes clear limits. A licensed establishment must post notice at each entrance warning patrons that smoking is allowed and any indoor smoking area must be separately enclosed and ventilated so that cigar smoke does not enter areas where smoking is otherwise prohibited. The bill also prevents these establishments from being located within 500 feet of a school, church, or child care center unless approved otherwise by local authorities' requirements or prohibiting the cigar bars through a local zoning ordinance or some other ordinance. The tax provision is also limited. It applies only to cigars sold for consumption on the premise of a licensed cigar bar or a retail tobacco store where the only products are allowed to be smoked on the premise are the cigars. It does not create a broad exemption for tobacco products generally, and it does not apply to off-site tobacco sales. Chairman Romer, this is a measured approach. It recognizes that premium cigar establishments operate differently from ordinary bars, restaurants, or retail businesses. These are age-restricted locations where patrons enter knowing the nature of the establishment and where the bill requires notice licensing, ventilation, and local oversight. The intent here is not to weaken Ohio's smoking laws. It's all about personal responsibility as well. The intent here is just to create a clear framework for a specific type of business with rules that are understandable for owners, patrons, regulators, and local governments. And I appreciate your time, and I'm happy to answer any of your questions. Thank you.
Well, thank you so much. And I'll open up for questions. Do we have any questions?
Right, can I have a try? Thank you, Mr. Chairman. Thank you, Representative Lorenz. As you know, the indoor smoking ordinance was not a creation of the state legislature. This was an initiated statute.
That's right.
Approved by the voters. And obviously what they wrote did not include this exemption, which are now trying. Do you have any concern that General Assembly may be entering into a practice of modifying what the voters have already spoken on? Through the chair to the ranking member, I think that's a great question, and I think it's something that we'll have discussions going forward.
You know, I'm not going to give you a yes or no right because we'll see how those discussions go, but I certainly think it's an important point that you raise, and it's something that we're going to have to take under great consideration and care. the last thing I ever want to do is bring forward a bill that overrides the will of the voter. So that's something that we'll have to consider as we go forward.
Follow up? Yeah, Mr. Chairman. So the other thing in the bill, Representative Lorenz, Mr. Chairman and Representative Lorenz,
why the sales tax exemption?
I mean, so if I go into an indoor establishment and, you know, order a drink, You know there a state tax you know included in the price of that I guess why because it a cigar that consumed on the premises should be exempt from state and local sales taxes?
Again, through the chair to the ranking member, another great question. So for me, this is an economic development bill. Many of the owners that I have spoken to in creating this, you know, it's like a Main Street type mom and pop bill to enhance economic development. And many of these consumers are just purchasing these out of state and without any, you know, whether they're paying taxes out of state or not. So for us, this is something that will try and bolster the local economy. that's spurred to economic development. Say you and your wife perhaps go out for an evening in, I don't know, downtown Powell, and instead of going and having a nightcap with a cocktail, you may go into one of the cigar establishments and give that a try. So that's the impetus behind looking for the sales tax exemption.
Okay. One more quick one. Very quickly. Yeah, if they do purchase something out of state and don't pay taxes on it,
they're really supposed to own up to that under state income tax return every year.
Thank you for that observation.
Other questions, comments? Seeing none, thank you so much for coming in.
Thank you very much. Appreciate it.
And that will constitute the first hearing on House Bill 549. We are now going to move to House Bill 613 to modify tax enforcement authority. We're bringing it forth for its second hearing, and we are going to hear from Elizabeth Baumgartner. Liz, if you could come forward, please, with testimony from the Chamber of Commerce.
Hello. Hello.
Chairman Romer, Vice Chair Thomas, Ranking Member Troy, and members of the Ohio House Ways and Means Committee, thank you so much for the opportunity to provide proponent testimony in person here today on House Bill 613. Out of respect for your very full agenda, some of the other witnesses did end up submitting written. My name is Liz Baumgartner, and I'm the Director of Economic Development and Tax Policy at the Ohio Chamber of Commerce. Our members have reported experiencing significant delays, uncertainty, and lack of predictability in the resolution of tax disputes before the Ohio Department of Taxation and the Ohio Board of Tax Appeals. Timelines for hearings and decisions are open-ended currently in law, and members have reported periods of inactivity with little or no communication. According to data from the Ohio Department of Taxation, there are over 2,000 cases in the department's docket, and as of end of last year, around 1,300 on the BTA's docket. As a result, businesses are forced to carry uncertain liabilities on their books, continue accruing interest on disputed amounts while additional audits occur, and make costly decisions about whether to keep investing in an appeals process that offers no predictable endpoint. Even with well-intentioned process improvements, the absence of statutory timelines in the Ohio Revised Codes allows disputes to languish indefinitely without a predictable time frame for resolution. House Bill 613 addresses these issues by establishing clear statutory timelines or shot clocks so that taxpayers receive a hearing within 180 days of requesting it at the Ohio Department of Taxation and a final decision within one year of a hearing at the Board of Tax Appeals We are supportive of these reforms in the conversations around additional funding for Ohio Department of Taxation and the BTA as well as a phase-in of the shot clocks to support the additional hiring and training of staff necessary to meet these benchmarks. Faster resolution not only helps the taxpayers, but helps the state and local governments by resolving disputes more quickly and resulting in payment of outstanding liabilities if due. In addition to setting benchmarks for tax-to-speak resolution, House Bill 613 works to improve the overall appeals process by pausing interest accrual on assessments. If the department has not resolved a reassessment petition after one year, the bill strengthens the role of the problem resolution officer. It encourages settlement and requires annual reporting to ensure accountability over time. We would also be supportive of amendments to the bill which would increase the protest period from 60 to 90 days. That's coming from the Council of State Taxation and something that they've been advocating for nationwide. Creating a mechanism for taxpayers to seek reconsideration of a final determination before having to appeal up to the BTA. And ensuring that extensions are by mutual agreement to allow accommodating more complex cases. This ensures that the system remains flexible while still promoting timely resolution. It's also worth noting that staffing cuts made more than a decade ago continue to cast a shadow over the Department and BTA's capacity today. The backlog we see now is the inherited consequence of those reductions, and we want to be clear that we do recognize the current administration's commitment to improving these processes and modernizing tax administration in Ohio. House Bill 613 is intended to work with that commitment, not against it, providing the statutory framework and dedicated funding needed to address a backlog that has been building for years and give the department, BTA, and taxpayers the resources that they need. In conclusion, this bill provides taxpayers with a predictable process, certainty, and timely resolution to their tax disputes. We appreciate our sponsor, Representative Click, Vice Chair Thomas' work on this legislation and the committee's consideration of the bill. I would be happy to answer any questions at this time, and thank you again for having me.
Well, thank you so much for coming in. I do know that this is a priority of our chamber. With that, I'll open up the questions. Do we have any questions? Ranking member.
Thank you, Mr. Chairman, and thank you, Liz. I'm glad you recognize the fact that the staffing, because I know that's one of the problems as to why there's a backlog here. The workforce there has been reduced, and I think there was some discussion in the budget negotiation. So I'm glad you indicated that probably to carry out what you would like to see done by this particular agency, they need some more funding and some more staffing.
Through the chair to the ranking member, certainly. And I think that's the goal of the sponsors, too, not to speak on their behalf, but is to really take a holistic look at the tax appeals process as a whole. And part of that is bumping up the staffing and funding so that they can meet these benchmarks. So thank you for the acknowledgement of that. And just to say, we've had extensive discussions, IP meetings on this already, and that definitely has been identified.
Other questions, comments? Representative Click.
Thank you, through the chair and to our distinguished witness this morning. Is there any way to distinguish the backlog? How many are just individual taxpayers versus small businesses or corporations?
Through the chairman, to the representative, thank you for the question. Right now, currently, no, the department has stated that they don't They don't differentiate right now between individual and business cases. The bill, I believe, under the reporting requirements does require that it be split up so that you can tell where the backlog is occurring. Thank you.
Maybe just to add, one of the things that we've learned is that from some of the changes that we've made, positive changes in the legislature, what we've seen is that there are actually fewer complaints and appeals, but those complaints and appeals are more difficult. They're more long-term. So that's part of what we're seeing. And BTA is very specific, Board of Tax Appeals, is very specific in that, that there are fewer overall appeals, but those are more complex that they are seeing right now.
Other questions, comments? Seeing none, thank you so much for coming in.
Thank you so much.
I'd like to see if there's anybody else here that wants to testify in person. Seeing none, I'm going to refer members to their iPads for submitted written proponent testimony from AFP, NFIB, the Business Roundtable, COST, Associated General Contractors, Siegel Jennings, Ryan LLC, Steve Domingo, and Jerry Burke. I know Steve Domingo is an attorney, lives in my district. That concludes the second hearing on House Bill 613. We're now going to move to House Bill 778 to exclude certain fire and EMS levies from being reduced. It's coming forth for its second hearing and we're going to start off with Sean Bruner with the Ohio EMS Chiefs Association. And whenever you're ready, but please tell us your background a little bit and then get your testimony.
Okay, thank you Chairman Romer, Vice Chairman Thomas, Ranking Member Troy, and members of the committee. My name is Sean Bruner. I serve as the Chief for South Central Ambulance District, which is in Ashgabula County. I have been affiliated with South Central Ambulance for 27 years now. As I'm currently the president of the Ohio EMS Chiefs Association, I just started my term this past January. House Bill 778 addresses an issue that often goes unseen by taxpayers, but has a direct impact on emergency responses capability across Ohio. When property tax abatements are granted through economic development tools such as community reinvestment areas and tax increment financing districts, the demand for fire and EMS services frequently increase while the revenues supporting those services decrease or remain at the value of the vacant land. Yet, these new facilities, infrastructures, improvements, and developments often generate additional demand for emergency medical services and fire protection. House Bill 778 corrects that imbalance by ensuring voters' approved fire and EMS levies continue to be collected and directed towards public safety. In rural Ohio, this issue becomes even more significant. As ambulance districts and fire agencies absorb growth corridors and infrastructure expansion, our costs do not decrease. They increase. Additional road traffic, industrial activity, utility infrastructure, residential growth, and larger service demands all generate more emergency service response, greater staffing pressures, increased vehicle wear and tear, higher fuel costs, and growing operational expenses. In Ashtabula County, we have experienced concerns along the Route 534 corridor where significant infrastructure investments and development has altered service demand patterns while local EMS and fire agencies continue carrying the response burden When large projects receive tax advantages but emergency services do not receive proportional protection of their levy funding local taxpayers ultimately absorb the costs. That creates an unfair system where existing residents are asked to subsidize public safety through costs generated by new development. In many parts of Ohio, fire and EMS services are provided through joint districts and several multiple township villages and municipalities. One challenge with the current system is that a single jurisdiction within the district can approve a TIF or tax abatement arrangement that affects the tax base, supporting emergency services across the entire district, even though the other participating jurisdictions may have little or no voice in the decision. The result is that one community can make a development decision that impacts the financial stability of an entire emergency response system serving multiple communities. What makes this issue particularly important is that fire and EMS levies typically represent only a small percentage of a property owner's overall tax burden. In many of the communities, ambulance district levies account for approximately 6% to 8% of the total property tax obligation, yet those funds support the emergency responders, ambulances, equipment, and services citizens depend upon during the most critical moment. It is important to clarify, House Bill 778 does not eliminate economic development incentives. It simply recognizes the small portion of tax dedication to public safety should remain available to provide service taxpayers expect and deserve. House Bill 778 establishes an important principle. Growth should contribute to the services that make growth possible. This legislation is not anti-development. Development requires reliable emergency responses, trained personnel, ambulances, and fire protection. Businesses benefit from safe communities. Residents expect emergency services to arrive regardless of whether the call originates from a long-time resident, a new development, or a major industrial investment. economic development to public safety are not competing priorities they are partners in building strong communities while I'm speaking today from the perspective of a rural ambulance district this challenge is not unique to Asheville County EMS and fire agencies across Ohio face similar concerns when development increases service demands while reducing the tax base that supports emergency response. From a statewide EMS perspective, protecting levy revenue also supports broader systems stability across Ohio. Agencies are facing workforce shortages, inflationary pressure, rising health care costs, increased equipment replacement expenses, and growing call volume. Rural EMS agencies are additionally challenged by longer transport times, hospital delays, and increasing difficult recruiting and retaining qualified personnel. Every dollar diverted from dedicated public safety levies reduced readiness and shift the burden through neighboring communities and agencies and multiple mutual aid systems. Ultimately, those costs do not disappear. They are transferred to local taxpayers or neighboring communities House Bill 778 helps create a fairer and more sustainable model by ensuring existing taxpayers are not left carrying the cost of new growth Voters' approved public safety funding remain dedicated to its intended purpose. Economic development remains possible while protecting essential public safety services and communities across Ohio maintain sustainable emergency response systems. Ohio taxpayers support fire and EMS levies with the expectation that those funds will protect their communities. When citizens call 911, they expect help to arrive regardless of where the emergency occurs. House Bill 778 helps ensure that expectations can continue to be met and honor the commitment voters made when they approved local public safety levies. We would also support an amendment to the bill to include county EMS districts. Thank you for your considerations, and I respectfully ask for favorable passage of House Bill 778. I would be happy to answer any questions.
Thanks so much for coming in, Chief. We appreciate it. We know you've got a good three-hour drive down here, probably more. So we very much appreciate it. Open up to questions. Representative Lear.
Chair, request permission to make a comment, not make a question.
Granted.
Thank you, sir. Thank you, and thanks to the gentlemen who are sponsoring this bill. I don't live in a very rural area. Part of my district is, but where I live is Delaware County, just north of Franklin. It's growing like crazy, and we have a countywide EMS, love your amendment idea, but we also have in my district a fire station that is just fire, not EMS. They work with the county EMS, and they've had this issue. and their name, which I'm not going to say out loud, is four letters because they represent four different areas, a city, some townships, a village, things like that. And this has been an issue for them when one of the areas decides they're going to have one of these abatements and they are seeing massive growth and this is going to be really helpful. So I want to thank you for coming in and again, just thank the chair and the sponsors.
Any response other than I agree?
I agree 100%.
Thank you. Vice Chair.
Thank you, Chair. Thank you again for coming down. We almost never get anyone from Ashtabula County, and now we have another fourth group in the back, my aide, Levi Cole's family, who's actually down today as well. Quick question for you, kind of piggybacking off of Rep Lear's question. So our biggest kind of opponent aspect to this bill is that, hey, communities can already do this already. If they want to give money to the fire or the EMS, they can do this. Why, in your opinion, do you think it's important for us to kind of have a blanket, know these need to be still paid, still given for those fundings?
I agree. Some communities do do that, and we have, I mean, it's appreciated. I'm sure those agencies truly appreciate it. But some agencies serve multiple areas where they can make that decision, and it will affect the whole service, the whole emergency service, and the neighboring emergency services because it is increasing our call volume and it is increasing the population within our area.
Follow-up?
Representative Troy.
Thank you, Mr. Chairman, and thank you, Mr. President of the EMS Association, for testifying today. I certainly agree with you that we need to protect these services. personally I always had a problem especially with TIFFs because if the voters have voted for funding for police or fire or emergency districts and all that I just don see how we allow local government officials to say we going to redirect that revenue to infrastructure costs for new development I mean, I would think that maybe if the developer needs infrastructure, the developer should pay for it. it shouldn't be coming out of a reassignment of what the voters have approved. So I think this is a good step here. I think we need to go a lot further and somehow get to the point, if the voters said, I want to pay this amount of millage for local police protection or fire protection or emergency service protection or developmental disabilities or mental health, I don't see why we allow the usage of that. I know that economic development is this trump card that covers everything. So I appreciate your testimony, and hopefully we can do this and even go a lot further to protect the services that the voters have approved funding for you to provide.
Through you, Chairman, and to the ranking member, thank you. We appreciate your support, and we hope that it will go further. Follow?
Representative Daniels.
Thank you, Mr. Chair. and thank you for your testimony, and this is a very solid concept. You brought something up really interesting in your testimony about mutual aid. So just for clarity to make sure everybody understands, so a community decides that they're going to tiff something, they're falling behind in their police services, fire services, EMS services, and a neighboring community has to provide mutual aid. Who pays for that?
Through the chairman to the representative. It is usually done by mutual aid agreements, but the mutual aid is paid for by the taxpayers of that community that is responding. Follow-up?
Other questions, comments? Representative Glasper.
Thank you for coming. I'll just briefly note, and I think there's appetite to do this. I think this and Senator Timken's bill have tried to cover most of the public safety entities, but I think we're missing a couple of the entities in the list and just openness to review those. And thank you for coming. And I'd encourage you to talk to the sponsors right here and Representative Miller.
Other questions, comments? Seeing none, thank you so much, Chief.
We appreciate it.
Thank you.
Thank you very much.
We're now going to call forth Joseph Krause with the West Licking Joint Fire District for testimony. Thank you. And please let us know your background.
Joe Krause with West Licking. Been in the fire service 26 years. Chairman Romer, Vice Chair Thomas, Ranking Member Troy, and members of the House Ways and Means Committee, thank you for the opportunity to provide testimony in support of House Bill 778. My name is Joe Krause. I do serve as the assistant chief of West Licking Joint Fire District. I'm here speaking on behalf of Fire Chief Jack Trennish, as he's currently out of the country. By the way, just to let the members know, if you look at your iPads, you'll see it under the chiefs.
Thank you.
I am here today in support of House Bill 778, because this legislation protects voter-approved fire and emergency medical service funding. West Licking Joint Fire District is made up of nine entities, We cover more than 125 square miles, and we received nearly 10,000 calls for help last year. Those calls represent real people, real families, and real emergencies such as fires, medical emergencies, vehicle crashes, rescues, hazardous situations, and moments when residents had nowhere else to turn but 911. For over four decades, we've provided these services with a strong commitment to efficiency and had minimal costs at a minimal cost to our taxpayers. West Licking has done its part. As a joint fire district, we have eliminated the need for individualized fire services within Lincoln County and across multiple jurisdictions by using shared service approach. Rather than requiring each community to duplicate major expenses, this fire district model eliminates the need for multiple separate fire chiefs, administrative chiefs, fiscal officers, administrative assistance, support staff, firehouses, apparatus, equipment, and ongoing costs associated with maintaining duplicative services. services. This shared service approach saves taxpayers millions of dollars while still providing professional and reliable fire and EMS protection across a large and growing service area. If the state truly desires to reduce property tax burden on Ohioans, then shared service models like West Lincoln Joint Fire District should be encouraged and protected. Our district model works. It reduces duplication, controls cost, and provides essential emergency services efficiently. However, the model only works if voter-approved revenue dedicated to fire and EMS services is protected. The issue at hand is now that the very entities that we serve are able to redirect portions of our citizen-voted fire and EMS levy dollars through abatements, tax increment financing districts, and community reinvestment areas. These are the dollars that the voters approve specifically for fire and emergency medical services. In many cases, those same voters are not asked for permission and may not even be informed before those funds are diverted away from their emergency service that they believe they were supporting. The fire district has no vote in these decisions. There is currently no mechanism to ensure that we receive any portion of the funds generated through these tax districts. We receive no direct revenue for the fire and EMS services, but we are still required to provide to those areas. Last year alone, West Licking Joint Fire District lost $7.1 million because of these mechanisms. That is 30% of our budget. That loss has real consequences. It affects our ability to plan responsibility, maintain staffing, replace apparatus, support training, keep stations operational, and meet the growing demands for emergency response in our communities. Because of these losses, we have been forced to go back to our voters and ask for additional funding. Not because we have been irresponsible, but because voter-approved fire and EMS levy dollars are being reduced and redirected. That is unfair to our residents, it's unfair to our taxpayers, and it's unsustainable for a fire district that has already taken significant steps to operate efficiently. House Bill 778 does not prevent economic development. It simply ensures that the public safety is not weakened in its process. Growth should not come at the expense of emergency response as as emergency response as communities expand the demand for fire and EMS increases and funding for those services must be protected House Bill 778 helps correct a serious problem. It protects the shared service fire district model. It respects the will of the voters and ensures the money approved for fire and emergency medical services remain dedicated to fire and emergency medical services. For these reasons, I respectfully urge the committee to support House Bill 778, and thank you for your time, your service, and your consideration.
Thank you so much, Assistant Chief. We very much appreciate you coming in. The fact that Representative Thomas and I were talking about $7.1 million is very significant, 30% of your budget. Thank you for sharing that. I'll put up the questions from the committee. Do we have any questions? You must have done such a great job. I appreciate it. You get off with no questions, but thank you so much.
Amen.
Yes. Okay. Is there anybody else that wishes to testify in person? Seeing none, I'd like to refer members to their iPads for submitted written proponent testimony from Greensfield Township Fire Department, Tri-Valley Joint Fire District, Mifflin Township, and the City of Columbiana. and that will conclude the second hearing on House Bill 778. We're now going to move to House Bill 762 to exempt certain vending machine food purchases from sales and use tax, and we're bringing it forth for its second hearing, and we're going to call first Michael Hogg with the National Automatic Merchandising Association for testimony. Whenever you're ready, sir.
Thank you, Mr. Chairman, Vice Chair Thomas, members of the committee, really appreciate your time today. My name is Michael Hogue. I am the Director of State and Local Government Affairs for NAMA, and this is a unique issue in Ohio that several of our members had reached out to us about. So as you might remember from Representative Lear and Representative Thomas's sponsor testimony earlier in the session, if typically food sold through vending machines and micro markets, our industry is not taxable because it's sold for off-premise consumption. Unfortunately, case law has developed around that constitutional provision for our industry where if a table and chairs is placed close enough to one of our locations, the entire location becomes taxable as a restaurant or any other location for on-premise consumption. And so this has caused a lot of confusion for our members for, you know, trying to work with the Department of Taxation auditors, trying to figure out, you know, how close does a machine need to be to tables and chairs to make it taxable? And, you know, none of our competing industries need to deal with this. So you'll probably be familiar with the micro market in the basement of the Huntington building And within that small atrium there are some high top tables where people can sit so that that micro remits tax But there the FUDA as well in the basement location and that is taxable So they're using the same tables and chairs, but one quick-service restaurant is not taxable, and ours is. So this bill just clarifies that food sold through vending and markets is not taxable. It clarifies the issue around the tables and chairs. I hope it's pretty straightforward for you but really appreciate it and happy to answer any questions
well thank you so much for coming in, where did you come in from?
Arlington, Virginia, the D.C. area
excellent, thank you, I think three of us are going to be at a tax conference
in Arlington over the summer here
excellent I appreciate in your testimony and I appreciate the abbreviated testimony but I noticed you say that Ohio is the only state in the country
that has such a table proximity, approximation for taxing.
Yes, sir. I think that's very interesting. I think it's probably because of the constitutional provision that you have dealing with sales tax,
and so you're going to get some case law around that, and sometimes it's going to get a little quirky.
So it's an easy single-state fix, we hope. Excellent. Thank you for coming in. Representative Lear.
Thank you, Chair. Thank you for coming in and testifying. I have a question I hope you can answer. Is this taxation that's based on the proximity of tables and chairs, is it applied equally across the state?
So any place that we have micro markets or vending machines with chairs and tables within the required distance, are they all taxed by the local jurisdiction or the state? Yes, all of those locations are going to be taxed.
Yes.
That's it. Thank you. Follow up. Yes, sir. Okay. Other questions? Thank you so much. Thank you, sir. We appreciate you coming. We're now going to move to Patrick Sheehan with the Ohio Automatic Merchandising Association. Whenever you're ready, sir, please begin.
Chairman Romer, Vice Chairman Thomas, Ranking Member Troy, and members of the House Ways and Means Committee, Thank you for the opportunity to appear here today in support of House Bill 762. My name is Patrick Sheehan. I'm president of Sheehan Brothers Vending, a family-owned Ohio business since 1956. I'm also president of the Ohio Automatic Merchandising Association, our industry state council. On behalf of our company and the OAMA membership, I wish to extend our gratitude to Representative Lear and also Thomas for introducing the bill, a proposal that is of great importance to our industry. Ohio's current sales tax treatment of our vending machine and micro market locations can be confusing and unpredictable to operators and consumers. Our food is typically not taxed because it falls squarely within the Ohio constitution sales tax exemption for food sold for off consumption but case law has produced an unpredictable and unfair tax environment for our consumers and industry where if a table and chairs are moved close enough to a vending machine or just in the room at all, depending on who you talk to at the Department of Taxation, the food becomes taxable. This is not the case for quick serve restaurants or other retail outlets, and as operators, we do not determine where an office, hospital, or other facility places its seating. House Bill 762 provides a straightforward solution by clarifying that eligible food sold through vending machines in micromarkets is not taxable. The bill does not create a new exemption or eliminate taxes on products that are already taxable under Ohio law. House Bill 762 simply ensures that food sold through unattended retail locations is treated consistently, predictably, and fairly throughout the state. Thank you for consideration of this legislation. I respectfully urge your support of House Bill 762 and would be
happy to answer any questions. Thank you so much for coming in, taking time out of your busy day. Just as a, maybe an interesting story, Representative Thomas and I were at Rickenbacker Air Force Base and we were with our National Guard just, what, last Friday, and I made a comment because they had a vending machine there and there was a table right there. And I, talking to Representative Thomas, I said, I wonder if that's taxable or not.
It is.
Because we really don't know. And with that, I'll open it up to questions. Any questions? Representative Daniels.
Thank you, Mr. Chair. Thank you for your testimony. And we met in our office today, and it was enlightening and educational to understand some of this complexity. You know, state government should be allowed to tax our consumers and our residents, but it should be clear, it should be easy to understand, not only for the taxpayer, but for the businesses offering that business. So I really appreciate your efforts in pushing this legislation forward. Thank you.
Thank you, Mr. Chairman Roman and Representative Daniels.
Appreciate it. And just tell us, where is your business located? What territory do you cover?
Yeah, we are located in Springfield, Ohio. So that's where I was born and raised. I live in Columbus and graduated from Ohio State in 2014. I'm a third generation. we cover Columbus, Dayton
go all the way into Indianapolis out of Springfield and then we just recently opened a branch in northern Kentucky and are servicing the Louisville and Lexington markets so business has been great and we're looking at some land and some real estate in Marengo now to move our efforts north
Excellent, well thank you for coming in do we have any other questions comments? Representative Tori thinks you need a tip
Thank you. I do want to direct, by the way, is there anybody else wishing to testify in person? Seeing none, I'd like to direct members to their iPads for submitted written proponent testimony from the American Food and Vending Association, New Bite, LLC, Continental, Canteen Services of Steel Valley, Red Sea Vending, and Vistar. And that concludes the second hearing of House Bill 762. and with no further business to come before the committee, we are adjourned.