Transportation Budget Vote Today; Operating Budget Still in House

Transportation Budget
The $13.5 billion transportation budget, HB 23, is scheduled for floor votes in both the Ohio House of Representatives and Ohio Senate today after being reported by the Conference Committee on HB 23 Wednesday evening.  The transportation budget must be signed into law by March 31 so both chambers must now move quickly to meet the deadline.

• Rural Highway Construction Program: The program, originally inserted in the House and removed in the Senate, was not restored in the conference committee. It would have allocated $1 billion for rural highway construction in counties that had no cities with populations above 65,000.  As proposed, 80 of Ohio’s 88 counties would have been eligible.
  Jay Edwards, Chair of the Conference Committee, said legislators will instead seek to address the issue in the pending state operating budget bill (HB 33) because the General Revenue Fund is the proposed source of funding.  OEDA testified in support of the program during the transportation budget process and will continue to advocate for rural highway construction funding.
• Workforce Mobility: The bill creates the Ohio Workforce Mobility Partnership Program within ODOT and allocates $15 million to the program. The program will provide grants to Regional Transit Authorities (RTAs) for workforce mobility initiatives including those which transport a resident workforce between RTA service territories to an economically significant employment center. Urban and Rural RTAs can apply for the grants jointly or singularly. OEDA believes policies and funding which improve workforce mobility between authorities can help address the state’s workforce challenges.  OEDA testified in support of the Ohio Workforce Mobility Partnership Program which will help employers access their labor shed and workers access jobs.
• Force Account: The conferees also reached an agreement on the “force account limits,” which are the monetary thresholds at which local governments are forced to bid out transportation infrastructure work. The agreement between the chambers hikes the monetary threshold by 133%. The bill will also increase those limits annually based on the Department of Transportation’s construction cost index, with a 5% cap.
• Passenger Rail: The legislation retains a provision that would allow Amtrak to build and provide rail service along corridors identified by the state. The state is studying the feasibility of two potential corridors.  The first has been previously highlighted by Amtrak which would connect Cincinnati, Dayton, Columbus, and Cleveland and has been referred to as the “3C+D Corridor.”  The other is a possible connection between Cleveland and Detroit with a stop in Toledo.
• Rail Safety: The bill also includes a host of rail safety provisions added in the wake of a train derailment in East Palestine including a requirement for two-man crews on freight trains and a requirement for wayside defect detectors to be placed between 10 and 15 miles apart. Both of these safety provisions have faced opposition from the rail industry, which claims the state is preempted by federal law.
• Gasoline Excise Tax Funds to Local Governments: The bill increases funding transferred from the Gasoline Excise Tax Fund to municipalities statewide by $71.2 million in Fiscal Year 2024 and $72.4 million in FY25. It also increases funding to counties by $61.7 million in FY24 and $62.7 million in FY25 and funding to townships by $33.2 million in FY24 and $33.8 million in FY25.
• Brent Spence Bridge: The bill also funding for the long-awaited $3.6 billion Brent Spence Bridge Corridor project in Cincinnati, which will include the construction of a companion bridge, along with improvements to the existing span and interstate network throughout an eight-mile corridor on both sides of the Ohio River.

Operating Budget

The House continues working through HB.33, otherwise known as Ohio’s two-year operating budget. The bill is currently being heard in the House Finance Committee, chaired by Rep. Jay Edwards, and must be signed by the governor by midnight on June 30.

A major source of uncertainty is the state’s income tax.  Republicans in the House have released dueling income tax reduction proposals.  One would reduce the income tax rate from 3.99% to 2.75% and the other would move Ohio to a 2.5% flat tax.  Changes to the state’s income tax would have a significant impact on the state’s project revenue; making it likely that any changes would impact the state’s operating budget and need to be added to HB 33.

Edwards says the bill remains on track to clear the House in April. The House Finance Committee will unveil its first amendments to the spending measure in early- to mid-April.