March 17, 2026 · Finance Committee · 8,791 words · 10 speakers · 119 segments
The House Finance Committee will come to order. Will the clerk please call the roll?
Stewart. Here. Davila. Sweeney's excused. Abdullahi. Here. Abrams. Here. Baker. Checked in. Bird. Calendar. Glassburn. Grimm. Here. Hall. Hoops is excused. Jerrolds. John. Here. Johnson. Here. Manning. Here. Pickle Antonio. Here. Plummer. Here. Ray. Here. Ritter. Here. Robin's excused. Romer. I'm here. Santucci. Here. Schmidt. Here. Sims. Here. Thomas. Here. Troy. Here. White. In Williams. Here. Willis. Here. Young. Here.
We have a quorum present, so we will continue as a full committee. the first order of business, 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. Apologies for starting a bit late today. Folks know by now we try to get Finance Committee started right on time, could not be avoided, so thank you, members and attendees, for your patience. I now call up House Bill 730 for its first hearing. The chair recognizes Vice Chair Davila for a motion.
Thank you, Mr. Chairman. I move to amend House Bill 730 with substitute bill L-136-2423-4.
Can the vice chair please describe the amendment?
Yes, Mr. Chairman. The substitute bill makes changes based off conversations had regarding federal SNAP funding, and the sub bill is on members' iPads.
Are there any objections? Hearing no objections, the substitute bill is adopted. Is there an amendment from the ranking member?
It'll be myself, Mr. Chairman. Thank you. Mr. Chairman, I move to amend with Amendment 1997-1. So the amendment I think was drafted as they had introduced,
but we'll say it's in order anyway.
please go ahead and explain the amendment. Thank you very much, Mr. Chairman. This amendment appropriates $12.5 million, $10 million of which is GRF, $2.5 million is federal matching dollars. These dollars will be distributed according to the existing agreed-upon bipartisan formula for distributing SNAP administrative costs. This form is going to consider SNAP case loads of individuals beneath 100% and 200% of the federal poverty line. While we would like to see the $38 million hold filled for all Ohio counties, this amendment distributes the funds in a way that actually aligns with the needs to lower SNAP error rates, which is targeting the funds based on caseloads. Regardless of whether a county is large or small, rural or urban, Democratic or Republican, we should be supporting their JFS caseworkers based on evidence and best practices, not what is politically expedient. If we do not, the consequences on critical constituent services and the state budget as a whole could be draconian. The bill that we have right now is the exact opposite of funding by need. So I urge support for the amendment. Thank you, Mr. Chairman.
Thank you. I'll speak to that as a chair before we recognize our vice chair Davila. We have had many, many, many discussions about whether or not the state should pick up the county's share of the split in staff administration costs as a result of the big, beautiful bill. And I will say as part of those conversations there was an offer on the table for every single county to get enough money for every single county to actually hire another staff member do many many things that might have actually had the ability to meaningfully reduce the error rate. Those offers were largely rejected. So we are going to have it even split amongst counties. We're going to make as many counties whole as we can, but we are not going to simply funnel the money to three counties at the expense of the other 85. I'm going to recognize Vice Chair Davila.
Do you have a motion?
Thanks, Mr. Chairman.
I move to lay the amendment upon the table.
Will the clerk please call the roll? Stewart?
Yes.
Davila?
Yes.
Sweeney?
Excuse me, sorry.
Abdullahi?
No.
Abrams?
Yes.
Baker? Bird? Calendar?
Yes.
Glassburn?
No.
Grimm?
No.
Hall?
Yes.
Jerrolds?
No. John. Yes. Johnson. Yes. Manning. Aye. Pickle Antonio. No. Plummer. Yes. Ray. Yes. Ritter. Yes. Romer. Yes. Santucci. Yes. Schmidt. Yes. Sims. No. Thomas. Yes. Troy. No. White.
Williams.
Yes.
Willis.
Yes.
Young.
Yes.
With 17 affirmative votes and 7 negative votes, the amendment is laid upon the table. I'll now call up Commissioner Denise Driehaus from CCAO, the president of CCAO, to provide testimony. And welcome, Commissioner.
Thank you for the opportunity. Happy St. Patrick's Day to all of you. I don't know if you can see my boots, but they're my Bridget Kelly boots, but they double as my St. Patrick's Day boots. So I appreciate your time. I used to be the ranking member of the Finance Committee back in the day. I don't recognize most of you because I've been gone that long. But now I'm a County Commissioner from Hamilton County, and I'm delighted to be here on behalf of CCAO I am currently the president of the association and I'm giving testimony on behalf of the association So chair Stewart vice chair de Villa ranking member Sweeney and members of the House Finance Committee Thank you for the opportunity to submit proponent testimony to House bill 730 or sub bill 730 My name is Denise Treehouse, and I serve as the Hamilton County Commissioner and the President of the County Commissioners Association of Ohio. House Bill 730 provides important support to Ohio counties and their job and family services agencies by appropriating $10 million in state funds, which will draw down an additional $2.5 million in federal funds. These resources will be used by county JFS agencies to administer our SNAP applications. The administrative funds in House Bill 730 are critical in light of the recent federal policy changes. Under H.R. 1, the federal match rate for SNAP administrative costs will be reduced from 50% to 25% beginning on October 1, 2026. This federal change will result in a significant $38.2 million cost for counties in the remainder of the state fiscal year 2027. the of the remainder of yes the fiscal year the projected loss for individual counties varies based on a variety of factors including snap administrative caseloads The appropriation contained in House Bill 730 were offset up to approximately 226 of the losses of each county. The distribution formula does not follow the traditional SNAP administrative funding model and is not proportional to caseloads. For counties with large caseloads, the loss resulting from HR1 is between 1.5 million and 7.5 million, depending on the county. In counties with lower case loads, the amount lost is often under 226,000, and thus the appropriation will cover the entire amount of the reduction caused by H.R.1. The new funds in House Bill 730 are especially critical considering H.R.1 establishes new requirements tied to SNAP state payment error rates. States must maintain an error rate below 6% to avoid significant financial penalties. If a state's error rate is above 6%, the state becomes liable for 5%, 10%, or 15% of the state's SNAP benefit cost. These costs are very expensive. Counties play a critical role in helping Ohio achieve a sub-6% SNAP error rate, ensuring that county agencies have the resources necessary to administer the program is essential to achieving the goal and protecting the state's finances. With limited resources in the JFS system today, these federal administrative costs could result in counties reducing staff levels if they are unable to absorb the funding loss. Smaller staff sizes inevitably lead to larger caseloads per caseworker, which could increase the likelihood of errors despite the best efforts of those county employees. Investments such as those included in House Bill 730 assist counties in maintaining the staffing capacity necessary to conduct careful eligibility determinations and support Ohio's efforts to maintain a low error rate. Determining SNAP eligibility and household benefit payments is a complex process that occurs at the county level. County JFS caseworkers must develop a detailed household budget for each applicant reviewing multiple income sources expenses and household circumstances to determine both eligibility and the benefit levels in many cases county staff must work through incomplete or inaccurate information provided during the application process which adds additional complexity to these determinations County JFS agencies also rely on the state-administered Ohio benefits IT system to process eligibility decisions. Counties do not control the system and at times case workers must work through system limitations or errors that require manual adjustments and workarounds. These challenges add administrative burden and increase to the potential of errors despite the best efforts of county staff. Beyond the immediate funding provided in House Bill 730, we believe the issue of of SNAP administrative resources will require continued collaboration between the state and the counties. We welcome additional dialogue with the General Assembly about how future administrative support can be distributed to have the greatest impact in keeping the error rate low across Ohio's counties. We look forward to ongoing evaluations about the impact of HR1, especially as it relates to the challenges in the counties with the highest caseloads. Every county JFS agency large to small is working towards the same goal of accurate eligibility determinations Ensuring that resources and technology are deployed in ways that best support these efforts and reflect the varying caseload demands across counties, including those counties managing the largest share of SNAP participants, will ultimately help Ohio maintain a low error rate and avoid costly federal penalties. Chairman Stewart and members of the committee, we are grateful for your support and for the attention you have given to this issue. House Bill 730 is an important investment in Ohio's ability to administer SNAP effectively and work towards our shared goal of a lower error rate. We look forward to continuing to work with the General Assembly and the administration to meet that challenge. With that, I'm happy to answer any questions that you have.
Thank you, Commissioner, for your testimony. We'll first go to Vice Chair Davila.
Thank you, Mr. Chairman. Commissioner, good to see you. Welcome back to finance.
Thank you.
So from your expertise, both in your seat as a commissioner and on this committee, I've got just looking for your input on something that's sort of related to this. Ohio, as I understand it, is one of only three states in the country that administers these types of benefits at the county level. We're in company along with California and Illinois. Not exactly the company that some of us would prefer for Ohio to be in. Do you think, based on some of the testimony that you've provided here, it would be more effective just to roll up this process and have a unified process for evaluating SNAP benefits, Medicaid, these types of public assistance programs, which are important at the state level, rather than a very diversified process across the state? Would that help get after some of the disparate funding issues that we're talking about in this legislation?
So I will try to answer the question as I heard it. So generally speaking, and I am a county commissioner, but I am providing testimony from the County Commissioners Association. We have not addressed that issue as the County Commissioners Association. As a county commissioner, I will tell you that generally I feel as though it's important to have the benefits controlled and applied locally as we are the ones on the ground. The county commissioners, we're an arm of the state. Many of these are mandated services that we provide to our constituents. I personally believe that the closer to the ground you are, the better you are at administering those services and managing the dollars that we receive. But it is fair to say that a lot of these are state mandates, and so we are the arm of the state that is managing those mandates for you.
And, Mr. Chairman, I tend to agree with that process as well. I think that a process administered closest to the people tends to be a more efficient and effective one. But I just wonder, in this case, as we're looking at ways to try to find efficiency and effectiveness across the board with a lot of different spending items at the state level, whether or not we might consider doing this a different way.
So appreciate your perspective on it. Thank you. Thank you.
Majority Leader John.
Thank you, Chair Stewart. From a former county commissioner, welcome to committee.
Thank you.
So I met with my county commissioners, as I do on a regular basis, but it's specifically about this issue. And I kind of ran the county budget when I was there, so I'm very familiar with their processes. And when I started asking them questions about the mandated chair and look back over the last five years, so if you don't know, I mean, you know, but most people, every county has a mandated chair that they have to contribute. When I ask what happened to the mandated share in Richland County, the mandated share from the county commissioners has actually gone down over the last five years, even though the cost of running JFS department has gone up rather significantly. So can you tell me, is that what we should expect or is that what you think is happening in most of the counties across the state of Ohio, that the mandated share that county commissioners are contributing to the running of their local department has actually gone down or remained the same?
Again, I can't speak for all counties. I can speak for Hamilton County, though, and I can tell you that we are struggling to keep up with the mandated services that we provide with the resources that we have. In Hamilton County, we have a levy for children services, which is similar, a little tangential to the SNAP conversation, but it gets to this idea that JFS is under strain in my county, and so we are doing our best to comply with all the mandates that we have, do some proactive things, because in the end, it's more efficient to do proactive responses to challenges in our community than it is to react all the time. And so we will be going for an increase to our children's services levy in November. It is a difficult time, as many of you know, to go for an increase in property taxes for a levy, but that is the kind of situation that we are in because of the cost of care escalating to amounts that we simply can no longer afford. And so I say that by way of Hamilton County to say we have a strained JFS budget. Certain elements of that budget are particularly strained, such as children's services. But this mandate from the federal government that comes in rather out of the blue for administrative services is something that we did not budget for. And so we are grateful to the state.
You also had a deficit in your budget created by the exact same thing. I've got the numbers in front of me. The hole that you saw was it's 60.2 million total. Am I right? And so the state is covering 30 point, 34.5 of that lost total split between the state, which is 22 million, and the counties, which is the 12.5 that we're talking about today. And so it is a similar dynamic when you get something that comes from the federal government that is unexpected. And never mind the error rate that we're going to have to deal with eventually. And we can talk about that later if you choose to talk about that. But it's challenging. Follow-up.
Thank you.
So I didn't hear you say that the mandated shares have gone up over the last five years, but I also had a conversation with a very smart individual who has worked in the realm of county government for several years, and he informed me that when you look across the counties, the counties that have contributed additional money from their general fund have seen lower error rates. So as an example, the discussion I had with my county commissioners is we don't want to contribute any money from our general fund. Marilyn, you need to, the state needs to step up. Mandated share hasn't gone up in five years. They don't contribute any money from the general fund. But yet the feeling from those at the table is that the counties that are contributing additional money from the general fund have a lower area rate. Can you address that at all? So again, I can speak from my own perspective
as a Hamilton County commissioner, and again, I'm going to go back to Children's Services, we have contributed general fund dollars to the services for child protective services in Hamilton County. We have a very tight general fund budget as well, and so we had a $30 million deficit, and so we absorbed some of that through the general fund. So I hope that answers the question more directly The other piece about the error rate the error rates are challenging because they are evaluated on a regular basis and they take a subset of the caseloads and apply that error rate then to that subset. And it can be a pretty small subset. And so sometimes in a larger county, we might have a larger subset and so it's easier to get an average. In a small county where you have them evaluating five caseloads, if two of those, or rather the cases, if two of those have errors, your error rate's going to be very, very high. But maybe not reflective of the overall because they take the sampling. And so the error rate keeps changing. In Hamilton County, I can tell you we're below 6% right now. I can't tell you in six months if I hope that's the case. We're working towards that. We're using all kinds of AI trying to evaluate if there are errors, why there are errors, what we can do to correct those errors. Some of the errors, by the way, are coming from the people giving us their own information. And that's a particular challenge. We're trying to work through all of that, but the error rates vary from county to county. And I don't, in front of me today, have the error rate for every county because it varies so dramatically over short periods of time. Follow-up?
Representative Pickle Antonio.
Thank you, Chair. It's always hard to tell where someone is sitting. You're fine. I'm over here. Thank you for being here, Commissioner. Thank you. So essentially the way that this distribution formula works in this bill is that it takes $12.5 million and it distributes $225,000 per county JFS or actual losses, whichever is less, which essentially only fills the whole itself is about $38 million. So the way that this formula works, over 70% of the SNAP case load is in the state's 10 largest counties, but those counties receive only 18% of the funding. And I understand that you're here on behalf of CCAO, but the question that I have is, how is it fair for 58 counties to get 100% of their losses reimbursed when counties, like I represent Franklin County, and you're in Hamilton County, Lucas and Montgomery. so Hamilton and Cuyahoga only get 3%, Hamilton, Lucas and Montgomery only 8%, Summit 14%. My question is one, how is that fair? And two, are we setting our counties up, the ones who have the largest caseloads, are we setting them up to fail and not be able to help keep that error rate where it needs to be?
So thank you for emphasizing that the loss is $38 million, and this is $12.5 million towards that $38 million. So it's not as if anybody's, you know, the $38 would be great. If you all are inclined to do that, we would be most grateful for that. And everyone can be made whole, and we can make sure that these error rates remain as low as possible. However, that's not what we're talking about today. We're talking about $12.5 million, which we are also grateful for. So we are glad that the legislature is engaging us in this way on something that you suffered from and that we suffer from.
You made yourselves whole I understand that You state representatives That your job You making us partially whole and I grateful for that too and I speak on behalf of the association from that vantage point
I am not in charge of the distribution formula. I can understand your point, and to that point, I know that you've got written testimony from Lucas County, Cuyahoga County, and Summit County to that point that talks about this distinction between methodology that has been used in the past and the methodology that we're talking about now. So I would refer you to that. They make a salient point in their communications. But as the president of the CCAO, we are supportive of the legislation because the state is helping us in a way that might not otherwise happen. But you are correct.
There is a discrepancy between the large and the small. Thank you, Chair.
So, and I don't know, I'm asking you to speculate, so speculate as far as you are able and comfortable speculating, but do you have any concerns that we are creating a situation where we might actually be driving food prices up in those counties? Cuyahoga, Franklin, Lucas, Hamilton, Montgomery, Summit counties that are
getting less, made less whole? I think that any time the federal government creates a situation where we have less resources to do the work we do, we've got a problem. So these are administrative costs and so caseloads will go up and we will have more challenges addressing the need. I mean, there's no question about that. So I hope that answers your question. I can't speak to necessarily what the impact would be by way of food distribution and but but anytime the federal government steps in and creates this kind of hole in your budget, you have to respond to that. And as I just referenced earlier, many counties are challenged in providing the services with the resources we have now. And so it's an added burden and we hope that the the other impact here is we hope it doesn't affect the error rates which is something we all share a concern about because the state will be penalized if those error rates go up and those error rates are something we are struggling to keep down so we impart we're in partnership on this piece
Representative Troy.
Thank you, Mr. Chairman, and thank you, Madam President. Having been a county commissioner, too, and actually having held your job as president of the association, I get a little tired of this us versus them thing, because as I always said, county governments are not so much local governments. They're 88 branch offices of state government. Everything that the counties have to do is pretty much promulgated by the state. And I agree with you that there's been shortfalls in the state funding children's services and adult protective services, which has forced a lot of counties to go to the ballot and add to the property tax burden to try and get those critical services covered. But I guess the question is that we went through this with the end of the COVID emergency when all the people who were on Medicaid had to be recertified at the county level and all that. And I believe the state rode to the rescue then and helped out with doing that And I just wondering I understand you grateful for what you getting here but I don understand why for a relatively small amount of money here compared to what we gave away in conforming with the federal tax law changes and things like that, why we can't just fund this for all the counties. And I guess the question is, are you noticing, as I used to notice that when we overload those JFS workers, we start to see burnout. We always had a tremendous turnover amongst all the other departments of the county in JFS because if the workload is intense, as you said, the cumbersome process to certify these things, are you concerned, are the other counties concerned about burnout at the employee level on your local JFS departments because of this increased burden and the inability for the state to help out totally in paying for this?
So two things there. I'm going to reiterate that if the state were to see fit to increase this $12.5 to $38 million, we would be grateful for that. So yes, I would be in favor of that, and I think all the county commissioners would be in favor of the state helping us with this $38 million gap that we all have in our budgets. So yes to that. Secondly, you talk about burnout and caseloads and caseworkers. Again, I can speak from personal experience in Hamilton County. We used to have a tremendous turnover. The job is very stressful on all fronts, and it's difficult. And so we have done our best. Again, back to the original question about what we are doing by way of our general fund. We did an analysis on competitive wage sets from Hamilton County to other counties that are comparable and other counties that are nearby. And we increased the wages for those caseworkers so that we didn't have them leaving within 12 months of us hiring and training them. And then they leave. And imagine the inefficiency in that and the cost associated with training and bringing people in on a constant basis. And so we are paying a more competitive wage. We are trying to give raises every year back to the point of the general fund. The general fund picks up all these costs. And so we are doing that work. I can tell you our rates of people leaving have gone down. So we are doing better. And I just saw a chart the other day where we're doing better. But that's not to say that this isn't a challenging job. And so the more that we have to worry about by way of these federal cuts, and that slides right down into the budget and impacts our workers, the more challenged we're going to be. And the concern, I'll tell you frankly, from myself and other metro counties with very large caseloads is that that will impact the error rate. And so we're very concerned about that. I think Lucas County is the one that articulates it in their letter about caseloads and the number of people they have doing this work. So yes, these are constant strains already without the federal government taking some of the money away.
Follow-up? Thank you, Mr. Chairman, for a quick follow-up. And again, to point out, everything that these workers have to do, you don't make the rules in Hamilton County. The rules are made in the state capital here as to what functions they are supposed to perform in terms of addressing all these issues. And yet we get in a situation where, as that becomes cumbersome, the county's got to dig into their pocket, even though the county cannot modify the process by which these things are carried out. Is that correct?
That is correct. But I will tell you one other thing. I've talked to Chris Ronane lately. He's the county executive up in Cuyahoga. and they are using AI to try to figure out if they have an error, what that is attributed to, how they can, you know. So we are doing our best with what we have to try to address the issue of the error rate in particular. Nobody wants higher error rates, by the way. Nobody wants that. The constituents don't want it. We don't want it. Nobody wants that. And so, and again, some of it's constituent error, which does add a layer of complexity to it. But I've talked to Chris Renane about what they're doing with AI and how to apply that so that we can do a better job of this. More to come on that. But we're always looking for ways to reduce our error rate.
Representative Glasper.
Thank you, Mr. Chair. And thank you for coming. And thank you for your previous service in the General Assembly. Good morning. So I'm all for efficiency and getting this as tight as we can. But one of the unintended consequences of moving to this formula of doing it by per county equally is that we actually do have a handful of counties that have formed joint JFSs. and it appears we don't have runs where we did the best to estimate on our end that the south central JFS that's Ross, Vinton, and Hocking, those counties would have been better off staying as individual counties by going through this model. And that possibly is true also for Defiance and Paulding. And so I guess my question to you is if we create this precedence of going into this model, are we, again, encouraging us to go the opposite direction of consolidation and efficiency versus the need-based model of how many SNAP recipients you have?
I understand your question. I am not in charge of the distribution rate or rather the formula that is being used here. But I understand what you're saying. Some counties are being made whole under this distribution formula and some are not. And so every county is getting something, but it is different county to county by way of percentage of the caseload. So if the question is, we're the county commissioners association. Let's put that hat over here. I'm going to put that hat on. We are grateful for the participation in the support of the state. If it were to follow the distribution formula that we currently have for SNAP benefits, that would be great. If it's this other formula, that is something that we're also willing to support because we are getting some financial support from the state. So I know that doesn't answer your question directly. Again, I will refer you to the letters that you've been provided that speak to this idea that there are large caseloads in some counties and not so much in others, and yet we're all being treated similarly.
Follow-up? I'll just note, Mr. Chair, for those looking, if you refresh your browser, the three other testimonies that Commissioner Dreyhouse referred to just showed up. So thank you. Representative Sims.
Thank you, Mr. Chairman. Thank you so much for your testimony today. I'm from Summit County. We had a little chat before. Summit County has one of the lowest error rates in the state. are we not concerned by the lack of resources, the impact that that might have on the retention of case workers who are the direct line to the people may increase the overall error rate for our state I guess can I just ask the second part of the question
Can I say yes? My answer is yes.
So it kind of makes no sense to me because it seems like we're telling people to make bricks without straw. I mean, they need the straw to be able to service the people in our community who really need... needs the help the most. I guess in the conversation, which I was not a part of, was there some complaints about the current formula? Why we came up with these, what feels like arbitrary numbers? So from the County Commissioners Association perspective,
there were no complaints about any of the previous formula. To answer your other question, the gap of 38 million, yes, it's concerning. You know, the H.R. 1, the federal legislation, created the gap. You guys had a gap. We have it. It's significant. 38 million is a significant gap for counties to absorb. There's 12.5 is helpful in helping us ameliorate some of that. But, yes, we think that's going to play out in our local communities, particularly those with large caseloads, where we are going to struggle to keep up with those caseloads and in turn potentially have higher error rates. So yes, that is a concern.
Follow-up. I guess it's just this comment. I just feel like we're talking about people as if they're widgets, and these are real lives that will be impacted by our failure, really, to do what we can do to really help these counties out. And again, Summit County, who is probably down about 75 caseworkers already, it has a less than 4% error rate. 14% of the allocation seems almost like a punishment that really sets us up for increasing the overall error rates in our state. And that just really caused me some great consternation. but thank you for being here again. Thank you, Mr. Chairman.
Can I comment to that?
Sure.
Very quickly. When you talk about the program, SNAP, and how important it is, I will tell you I don't lose sight of who we're serving with these benefits. When the federal government cut off SNAP, do you remember this wasn't so long ago, and we had to scramble as counties to try to figure out how to fill that gap in our communities for about a month. and we in Hamilton County were very concerned about people not getting those benefits because there are children going hungry in Hamilton County if we don't have those benefits available. And so we took some of our ARPA dollars that had rolled out of another project that we were going to reappropriate anyway. We took some of those dollars and put them in the food bank so that they in turn could provide food in food pantries for those that weren't getting their SNAP benefits. So these benefits are really important. You emphasize the point, and I'm reemphasizing the point, that these benefits are critical to the people we serve. In Hamilton County, it's about 100,000 people and about 45,000 are children. That's what we're talking about. So I appreciate you making the point.
Thank you. I want to make a comment, and then I'll get to a question here. But just to level set, because I think if you were watching at home, you'd say, what the heck is even being discussed here tonight, this morning? the staff administration cost to this point has been a 50 split between the federal government and the state government As part of the one big beautiful bill that has shifted to a 75 on the state 25 to the federal government So yes, the share of cost is higher on the state collectively, and we have traditionally had a partnership. So the state, as part of the budget and through our process, covered the state's share of the cost. What we have not done, what we've said no to since last summer and then in the fall again and then in the spring again, is picking up the county's collective share of that split as well. And I just observed that, you know, we always talk about this being a partnership until it's time to pay the bill. So we're looking through the devastating hits that counties are going to receive from this differing allocation that the federal government has come up with. Delaware County's hit, $25,000. Geauga County's hit, one of the richest counties in Ohio, $92,000. My own Pickway County, $80,000 against a $33 million carryover balance. Shelby County, $29,000, on and on and on and on. So my overall point is, why shouldn't the counties pick up their share of the changed costs as a result of federal legislation, just like the state has done?
You know, the question is, talking about straws and making bricks, the counties have a lot of straw. I mean, there are counties with a 200% carryover balance routinely. I've seen the carryover balance compared to this cost. Why shouldn't Pickway County come up with $80,000, that's couch cushion money, when they have a $33 million carryover balance?
I've got the runs in front of me also. And so to your point, let's take Cuyahoga. So Cuyahoga's administrative loss is $7.5 million. The $226,000 is what would be appropriated through House Bill 730. If it were to be the more traditional formula, that amount is $1.4 million. So that's the differential between what is being suggested by the one side of the aisle versus what is in the bill. Commissioner, I'm not talking about our run of how we're going to allocate this $10 million yet.
I'm saying just go back to the macro question. We have a change in federal law. We're going to have additional costs. Why shouldn't the counties have to pay their share of the imbalance? Yes, Cuyahoga County's lost $7 million. But like a lot of our bigger counties, Franklin County has an all-funds budget of $1 billion. The math of the devastating quote-unquote hit compared to what they are holding in the bank is minuscule. So why shouldn't they have the responsibility collecting all this tax revenue all year long to pay some of the costs? We do have the responsibility, and we're grateful, again, that the state is helping us with the responsibility. So I don't want that to get lost in the conversation. But let me speak from Hamilton County's perspective. The loss in Hamilton County is probably about $5 million. Our carryover is about $20 million. And so the five, the carryover, I asked my administrator this morning when I was driving up here for these numbers. and so we don't have a carryover that gets us through a whole year of our budget that's just not the case and so I think county by county you will think or find different numbers to plug in to these equations so again you are correct the the amount of money that we are going to need to spend to make up for the loss from the federal government and I have tried not to lose sight of the fact
that H.R. 1 is creating the problem, right? That's the problem. You guys have a deficit. State legislature has to deal with, and then the counties have a deficit. And yes, in partnership, you are saying to us, we are going to help you with that deficit.
We are grateful. I am not suggesting that we are not grateful. I've been asked questions about the distribution formula. I've tried to answer them fairly. But in the end, many counties throughout the state of Ohio will be made whole through the distribution formula that you have suggested. So I wasn't part of those conversations. I'm simply here to testify that we are grateful that the state is working in partnership with the counties to try to ameliorate some of the loss. And for some of us, it is a significant loss, and we are concerned about the impacts then, not only on our caseloads or rather our staff, but the error rates then in turn that might go up. And that is something I believe might happen were we to get into a situation where the staff levels are reduced to a point where we've got higher caseloads. So just so we're clear on our, when we're making our sheets for the caucus too,
We are here after nine months of saying no and saying yes to $10 million. The state will pick up $10 million of what we believe is the county's share of this cost. CCAO is a proponent and thinks people should vote yes on this bill. Is that correct?
That is true.
Okay. Now, looking forward, we have a system in which the state is on the hook for up to a $400 million penalty if our error rate, which is determined really at the county level because these are county employees doing the administration work currently, so we're sort of at the mercy of whether the employees get the error rate under 6% or not. Otherwise, the state is going to pay $400 million of penalty. Can I assume it is going to be the position of CCIO that we should not simply pass the hat as partners and have the counties cover a proportional share of that $400 million penalty if we receive one?
So what I can say is that in partnership, we are working every day to keep that error rate under the 6% level that has been determined by the federal government every day. And we are checking these rates all the time to make sure if we've got a high error rate at one point in time, what is driving that, how do we ameliorate for that, how do we correct for that? And so we are, again, I'll reiterate, we are proponents of the bill. We are happy for the partnership. The $12.5 million is higher than zero. It is not $38 million, but it is more than zero. And so we are grateful for the partnership in that way. I cannot comment to the other. We are going to have to keep close track of these error rates and how this all plays out, particularly as these cuts become reality down in the counties.
Other questions from the committee? Seeing none, thank you, Commissioner, for your testimony.
Thank you. Appreciate your time.
I now recognize Vice Chair Davila for a motion.
Thank you, Mr. Chairman. I move to favorably report House Bill 730 and recommend its passage.
Will the clerk please call the roll? Stewart? Yes.
Davila? Yes.
Abdullahi? No.
Abrams? Yes. Baker? Bird? Yes. Calendar? Yes. Glassburn? No. Grimm? No. Hall. Yes. Gerald. No. John. Yes. Johnson. Yes. Manning. Pickle Antonio. No. Plummer. Yes. Ray. Ritter. Yes. Romer. Yes. Santucci. Yes. Schmidt. Sims. No. Thomas. Yes. Troy. No. White. Williams. Yes. Willis. Yes. Young. Yes.
With 17 affirmative votes and 7 negative votes, the bill will be favorably reported to the Rules and Reference Committee. I grant LSC Harmonizing Authority for the committee report. The vote will be open following committee until 3 p.m. You can sign the roll after committee in the clerk's office. Additionally, if you wish to add your name as a co-sponsor, please write an asterisk next to your name. And as always, please sign the sheet before you leave. This concludes the first hearing on substitute House Bill 730. I now call up House Bill 645 for its first hearing, and we recognize Vice Chair Davila to provide sponsor testimony.
Thank you.
We're getting our sheet signed, Vice Chair, but you are welcome to proceed.
And I promised to sign the sheet as well before I leave, Mr. Chairman, as I was admonished. Well, thank you, Mr. Chairman, and members of the House Finance Committee. I really appreciate this opportunity to provide sponsor testimony on House Bill 645. This legislation takes a straightforward but important step toward strengthening fiscal discipline in Ohio's state government by requiring the use of zero-based budgeting in the development of the state budget every 10 years. Under traditional budgeting practices, government agencies often build their requests on the prior budget, making incremental adjustments each cycle. Over time, this approach can allow programs, line items, and administrative activities to continue indefinitely without a thorough reevaluation of their necessity or effectiveness. business That process can make it difficult for policymakers and the public to determine whether taxpayer dollars are truly being spent in the most efficient and responsible manner Zero budgeting takes a different approach by requiring agencies to justify their spending from the ground up. Instead of assuming the previous year's funding level should continue, every program and expenditure must be justified starting from a baseline of zero. This process encourages a more disciplined and transparent approach to budgeting. It forces agencies to examine their programs closely, evaluate outcomes, and clearly explain why each expenditure is necessary to fulfill the responsibilities entrusted to them. For the General Assembly, this approach strengthens our ability to provide meaningful oversight of state spending. Members of this body, as the first branch of government, and in this chamber where appropriations bills are initiated, have a fundamental responsibility to ensure that resources entrusted to government by Ohio taxpayers are being used wisely. Requiring a periodic, zero-based review will help ensure that we are not simply carrying forward legacy spending decisions without careful scrutiny. This legislation also helps address concerns many Ohioans have about the size and complexity of government. Over time, the administrative state can grow through layers of programs, regulations, and bureaucratic structures that are difficult to unwind once established. By regularly requiring agencies to rebuild their budgets from zero, this bill provides a mechanism to evaluate whether programs are still necessary, effective, and aligned with the priorities of the people we serve. Importantly, House Bill 645 does not impose this process every year or even every biennium. Instead, it establishes a 10-year cycle, beginning with the General Assembly convening in 2027. This timeline strikes a balance between meaningful fiscal review and administrative practicality, allowing agencies and policymakers the opportunity to reassess spending without creating unnecessary disruption in the annual, or in this case, biennial budgeting process. Zero-based budgeting has been used by governments and organizations as a tool to combat wasteful spending, increase transparency, and focus resources on the most important priorities. Implementing it strategically in Ohio's budgeting process provides a structured opportunity to ensure that state government remains efficient, accountable, and focused on delivering results for Ohioans. House Bill 645 does not predetermine outcomes or mandate specific spending reductions. Rather, it establishes a framework that encourages thoughtful evaluation, responsible stewardship of taxpayer dollars, and greater transparency in how public funds are allocated. Ultimately the purpose of this legislation is simple to ensure that every dollar spent by the state can be clearly justified to the citizens who provided it Thank you again Mr Chairman for this opportunity to provide sponsored testimony on House Bill 645 I be happy to answer any questions that you or members of the committee may have Thank you again Mr Chairman for this opportunity to provide sponsored testimony on House Bill 645 I be happy to answer any questions that you or members of the committee may have
Thank you, Vice Chair Davila. First question from Representative Ritter.
Representative, thank you very much for this legislation. Very sympathetic to what you're trying to do here. You addressed it a little bit in your comments once every 10 years. Can you expand on why you think that's an appropriate amount of time between zero-based budgeting? Thank you, Mr. Chairman, and to Representative Ritter.
In crafting this, we thought that every decade would be a reasonable approach to balance the amount of work that has to go into this process and what we're trying to actually accomplish here, which is the desire to take a close look at every initiative, every program, every agency, and make sure that all those resources are correctly allocated to what the current needs happen to be. There could be a process certainly to do this more frequently. I happen to believe in crafting it this way that we've created a scenario that is not onerous to agencies or frankly to the members of this committee and the very modest staffs that we have on both sides of the aisle to be able to do this work with our partners in the administration. Quick follow-up.
Sure. Representative, you just referenced the amount of work that's going to be involved in taking everybody back to zero. Can you expand on that? Are we talking about hiring additional staff? Are we talking about taking more time?
What does that additional work look like? Thank you, Mr. Chairman, and to the representative. I think it will remain to be seen the amount of work that has to go into it. Obviously, the administrative agencies in the executive branch have the staff that work on putting together a budget every two years. I played a role in this during a couple of times in an administration at the federal level, and I know that in terms of going before OMB, justifying the things that have to be done before the budget proposal even goes up into Congress is quite a process. So I look at this as simply a different way for staff on the administrative side of things to do their job. But in terms of what the workload will look like on the legislative side, that's really what I'm cautious about in terms of doing this any more frequently than once every decade. So again, it's a balance between what the practical side of this is for really for our staff here in the legislature versus what might come out of this and more efficiencies.
Representative Sims. Thank you, Mr. Chairman. Thank you so much for your testimony today. I was just out of curiosity. I know when we're talking zero-based budgeting for maybe a department or one government entity is different, so they amount to the question about the amount of work. Do we know of any other, who else as a state government is undertaking a zero budget approach currently and do you know how that working Thank you Mr Chairman and Representative Sims The concept actually goes back to Jimmy Carter back in the 1970s I believe when he was governor
of Georgia, but certainly something that he wanted to try to get done at the federal level during his term as president. In terms of other states doing it more recently, that's something that I need to actually go back and look at. I believe other states at least have legislation that in recent years has moved somewhere through the process. At this point, I'm not sure that any other state has implemented this fully. But again, it's not a new concept, and I think it's something that is probably overdue at various levels of government.
Other questions? Seeing none, sir, thank you for your testimony. You can probably stay there, because I'm now going to call up. This will conclude the first hearing on House Bill 645. I now call up House Concurrent Resolution 32 for its first hearing. And Vice Chair Davila, You are free to proceed.
Well, thank you once again, Mr. Chairman, for this opportunity to provide sponsored testimony on House Concurrent Resolution 32. This resolution is closely related to House Bill 645, which I just presented. And while that legislation focuses on implementing periodic zero-based budgeting for Ohio's state budget, House Concurrent Resolution 32 urges Congress to consider adopting a similar approach at the federal level. As the resolution notes, the federal government primarily relies on traditional budgeting practices that build upon prior years' spending levels. Zero-based budgeting instead requires agencies to construct their budgets from the ground up and justify each expenditure according to the mission and objectives of the agency. This resolution also highlights legislation introduced by Senator James Risch of Idaho. The Zero-Based Budget Act, S-181, would do four things. First, require federal agencies to provide a zero-based budget every six years. Second, reduce spending levels by 2%. Third, remove the assumption that current activities and funding are automatically continued. And fourth, for national security purposes, that bill would exempt the Department of Defense and the National Nuclear Security Administration from these requirements. Co-sponsored by seven U.S. senators, this proposal represents an important step towards strengthening congressional oversight of federal spending and encourages a more disciplined review of federal programs and priorities. HCR 32 simply expresses the view of the Ohio General Assembly that Congress should give serious consideration to adopting this reform as a way to promote transparency, accountability, and fiscal responsibility in the federal budgeting process. Thanks again, Mr. Chairman, for the opportunity to present on this concurrent resolution. Happy to answer any additional questions the committee may have.
Thank you, sir, for your testimony. Are there questions from the committee? Seeing none, sir. Thank you.
Thanks very much.
This will conclude the first hearing on House Concurrent Resolution 32. Seeing no other further business for the committee, the committee now stands adjourned.