Federal Tax Cuts and Jobs Act (HR 1): While efforts to cut taxes and encourage job growth are generally applauded, the Tax Cuts and Jobs Act caused great concern for economic development professionals due to proposed negative treatment of Private Activity Bonds, Advance Refunding Bonds, Historic Preservation Tax Credits (HPTC) and New Markets Tax Credits. The bill was finalized December 20 and sent to President Trump for signature. Luckily, the main provisions of these programs were preserved but slight revisions were made that will be further studied. For example, a tweak to HPTC in the final bill repeals the 10% non-historic rehabilitation tax credit for non-residential pre-1936 properties, subject to transition rules. Credits from the HPTC program also apparently will now have to be used over 5 years. The centerpiece of the tax bill is a permanent 40% tax cut for corporations. Small businesses will also see their taxes shrink. The bill also lowers tax rates for individuals temporarily, while increasing the standard deduction and the child tax credit. However, because the bill also limits key tax deductions (example: reduction in deductions for state and local taxes), the impact on individuals will vary.

Oh Christmas Tree, Oh Christmas Tree: The final day of legislative session in Ohio was Wednesday, December 13, and true to form, the legislature chose several bills to serve as year-end “Christmas Tree” bills, so-called due to their being loaded with amendments (versus ornaments). HB 69, which mainly deals with amendments to Ohio’s TIF program (see below) was heavily loaded and passed through the full Senate early Wednesday. Later in the day, the House concurred in the amendments and approved the bill, and has been sent to Governor Kasich for signature. Major amendments added to HB 69 included the following:

Tax Expenditure Review Committee: The legislature’s Tax Expenditure Review Committee held its first meeting October 17. The Committee was formed through legislation passed last session (HB9, 131st General Assembly).

Sen. Scott Oelslager (R-N. Canton), who was selected as chairman during the meeting, noted afterward that the panel is charged with reviewing the tax expenditures only once every eight years. As for a schedule moving forward, he said he is seeking input from members on that and other related subjects. The other committee members are: Sen. John Eklund (R-Chardon), Sen. Vernon Sykes (D-Akron), Rep. Tim Schaffer (R-Lancaster), Rep. Gary Scherer (R-Circleville) and Rep. John Rogers (D-Mentor-on-the-Lake).

Helping members kick off the committee’s work was Tax Commissioner Joe Testa, who presented a broad overview of the Tax Expenditure Report (the “TER”) which is produced along with the executive budget proposal every two years. The latest TER, which covers the Fiscal Year 2018-2019 biennium, contains estimates for 129 tax expenditures spread across nine different taxes, the tax commissioner said. The total for the current year of the budget cycle is about $9.1 billion.

Tax Expenditure Review Committee: The legislature’s Tax Expenditure Review Committee held its first meeting October 17. The Committee was formed through legislation passed last session (HB9, 131st General Assembly).

Sen. Scott Oelslager (R-N. Canton), who was selected as chairman during the meeting, noted afterward that the panel is charged with reviewing the tax expenditures only once every eight years. As for a schedule moving forward, he said he is seeking input from members on that and other related subjects. The other committee members are: Sen. John Eklund (R-Chardon), Sen. Vernon Sykes (D-Akron), Rep. Tim Schaffer (R-Lancaster), Rep. Gary Scherer (R-Circleville) and Rep. John Rogers (D-Mentor-on-the-Lake).

Helping members kick off the committee’s work was Tax Commissioner Joe Testa, who presented a broad overview of the Tax Expenditure Report (the “TER”) which is produced along with the executive budget proposal every two years. The latest TER, which covers the Fiscal Year 2018-2019 biennium, contains estimates for 129 tax expenditures spread across nine different taxes, the tax commissioner said. The total for the current year of the budget cycle is about $9.1 billion.

The Ohio Economic Development Association has joined with a broad coalition of organizations asking members of Ohio's congressional delegation to protect private activity bonds, the New Market Tax Credit and the Historic Tax Credit as important tools used for economic...