News and Analysis
An OSHA-issued letter of interpretation from February of this year confirmed its policy: third party union representatives may accompany OSHA inspectors at a facility when the facility is not currently represented by a union.
The National Association of Manufacturers (NAM) says this letter is a complete departure from decades of OSHA policy and interpretation of the regulations and the Field Operations Manual.
As a leading member of the Coalition for Workplace Safety, the NAM has signed onto a letter to Dr. David Michaels, Assistant Secretary for OSHA, as well as the Acting Administrator of the Office of Information and Regulatory Affairs (OIRA), along with 35 other coalition members, outlining our concerns about this interpretation.
NAM writes: “ The overwhelming consensus is that this will undermine the safety focus of these inspections and turn them into opportunities for unions or other parties with agendas contrary to the employer to enhance campaigns against the employer, gain entry to the employer’s premises to develop more information for the campaign, or even glean proprietary information.”
The House and Senate convened the conference committee for the FY14-15 budget bill, House Bill 59. Committee members are: Rep. Ron Amstutz (R-Wooster), Rep. Jeff McClain (R-Upper Sandusky), Rep. Vern Sykes (D-Akron), Sen. Scott Oelslager (R-North Canton), Sen. Bill Coley (R-Middletown) and Sen. Tom Sawyer (D-Akron).
The budget at this moment proposes to spend $120.5 billion, a10.6% growth over the current biennial budget. It contains more than 5,000 pages of changes to state law.
OMA General Counsel Kurt Tunnell of Bricker & Eckler described for members of the OMA Government Affairs Committee this week a policy proposal offered by Chief Justice Maureen O’Connor that would alter how Ohioans elect judges. Read counsel’s memo.
With transportation productivity as an longtime policy priority, the OMA Government Affairs Committee this week discussed the lack of sufficient railroad competition.
Speaking on behalf of the American Chemical Council, Elaine Patterson shared an analysis of freight rail rates for chemical manufacturers.
At issue: Four railroads now control about 90% of the long-haul freight market, with only two carrying most of the eastern U.S. cargo. Shippers say this market consolidation has resulted in regional monopolies that quash effective rail-to-rail competition.
Committee members indicated that they favor policy changes at both the state and federal levels and plan to work on the issue.
This article from Chemical and Engineering News amplifies the issues.
Buried in the Senate omnibus amendment to the state budget bill passed this week is a provision that would permit corporations and labor unions to make financial “gifts” to legislative campaign funds for certain uses: to pay for office facilities, furniture, equipment and supplies. Current law allows such gifts only for state and county political parties, not caucuses.
There's been a continuing dust-up between Auditor Dave Yost and Governor Kasich over the auditor's authority to audit JobsOhio. If he can audit JobsOhio, can he also audit private companies?
Appearing at the OMA Tax Policy Committee on Tuesday, Yost assured OMA members that he has no plans to audit private businesses, as he stated in a recent letter to legislative leaders.
The auditor said that JobsOhio is unlike other private corporations in that it’s board members are appointed by the governor.
The General Assembly just enacted a new chapter of law shielding JobsOhio from state audit authority.
OMA counsel Bricker & Eckler prepared this memo to respond to members' questions about the state's audit authority.
Representative Dorothy Pelanda (R-Marysville) introduced House Bill 177 to prohibit the sale or installation of counterfeit or non-functional air bags. Similar legislation has been offered in other states and is supported by automakers, auto dealers, and insurance industry interests. Contact OMA’s Rob Brundrett to learn how to advocate for the measure.
Rep. Kirk Schuring (R-Canton), the chairman of a House Manufacturing & Workforce Development Committee, announced that there will be no more hearings on “right to work” legislation this year.
The committee heard testimony from co-sponsors Rep. Kristina Roegner (R-Hudson) and Rep. Ron Maag (R-Lebanon) on a pair of proposals, House Bill 151 and House Joint Resolution 5, that would prohibit anyone from being required to join a union as a condition of employment.
After the hearing, Schuring said he had polled the members of the committee, who apparently unanimously agreed not to continue deliberations on the proposals.
The Senate has released its version of school funding formula, including preliminary break downs by district (courtesy of Gongwer News Service), that increases money through the foundation formula by $717 million over the biennium compared to the current fiscal year.
Additional changes are expected before next week’s formal adoption of the formula as part of an omnibus amendment.
The formula has largely been altered by an increase in the per-pupil base amount of the calculation – to $5,745 in fiscal year 2014 and $5,800 for fiscal year 2015.
This week the House of Representatives amended Senate Bill 67 to prevent the state auditor from auditing the liquor profits used to finance JobsOhio. This has been a point of contention between Auditor Dave Yost and some of his fellow Republicans.
Yost will be joining the OMA Tax Committee on Tuesday, June 4th to discuss this and other policy matters. And, on Wednesday, June 5th the OMA Government Affairs Committee will hear the legal arguments surrounding the dustup from OMA counsel, Kurt Tunnell of Bricker & Eckler. Register for in-person or call-in participation.
An amendment to the pending state budget bill, House Bill 59, revises laws governing Ohio Department of Natural Resources, Division of Oil and Gas, and would require operations involved in the exploration, development, and gathering of natural gas in Ohio to report the country of origin and manufacture of the tubular steel products used for natural gas development.
Collection and disclosure of this information will help ensure that Ohio's natural gas exploration systems are safe and of the highest quality without imposing any form of purchasing mandates.
U.S. Senators Rob Portman (R-OH) and Sherrod Brown (D-OH) urged the U.S. Department of Commerce (DOC) to protect Ohio-based companies from illegal Chinese trade practices by maintaining antidumping duties and countervailing duties on Chinese steel pipe imports. Their effort comes in advance of an expected DOC ruling on a petition regarding product coverage for duties ordered on Oil Country Tubular Goods (OCTG) from China.
It appears the standoff between JobsOhio and the State Auditor Dave Yost has cooled for the time being. While the General Assembly is considering legislation to clarify the law around the Auditor’s role with the quasi-public agency, Auditor Yost delivered a letter to members of the General Assembly stating that the jurisdiction of the Auditor of State does not extend to any private corporation that accepts public dollars.
In the letter, the Auditor describes why he does not have jurisdiction to audit private companies. His letter should quell concerns that the Auditor is considering auditing private companies that receive state funding.
Representative Tracy Maxwell Heard (D-Columbus) was elected this week by her House Democratic colleagues to replace Representative Armond Budish (D-Beachwood) who stepped down to concentrate on his bid for Cuyahoga County Executive.
Representative Heard is in her fourth term and takes over leadership of a caucus of 39. She is not new to House leadership; she has served as Minority Whip since 2009. The former news anchor, legislative aide, and political consultant represents much of southeastern Columbus.
The U.S. Senate passed S.601, the Water Resources Development Act of 2013, by a wide margin, 83-14. The National Association of Manufacturers (NAM) sent a "Key Vote" letter to the Senate urging support.
According to NAM, this legislation will ensure continued investment in our inland waterways, ports and harbors and other critical water resources projects that help keep manufacturers competitive.
Manufacturers urge the House to quickly move on a WRDA bill.
This week PRO-TEC Coatings Company, Leipzig, commissioned its new continuous annealing line. PRO-TEC, a joint venture of United States Steel Corporation and Kobe Steel of Japan, recently completed a capital investment program of more than $400 million.
The new line will produce the next generation of high strength steels, creates 80 new full-time jobs, and gives PRO-TEC a total production capability of 1.5 million tons/year.
PRO-TEC president and OMA board member, Bryan Vaughn, presided over the ceremony and United States Steel Corporation’s Chairman and CEO, John Surma, and Kobe Steel President and CEO, Hiroya Kawasaki, made keynote remarks to invited guests including state officials, customers and media. 5/17/2013
Pictured left to right: Chris Masciantonio, General Manager - Gov't. Affairs, U.S. Steel, Senator Cliff Hite (R-Findlay), Bryan Vaughn, President, PRO-TEC Coating Company, and Eric Burkland, President, OMA.
Her proposals include: eliminating party affiliation in judicial primaries, holding judicial elections in odd-numbered years, non-partisan nominating commissions to recommend judicial appointments, lengthening judges' terms, and increasing the basic qualifications.
The proposals have not been universally hailed in political circles. The Chief Justice even has opposition within the Supreme Court, most notably from Justice William O’Neill who criticized the ideas because they do nothing about campaign finance.
CEO magazine released its annual business rankings of the states this week. Ohio ranked 22nd, up 13 spots from 35th a year ago. The rankings are based on a survey of 736 CEOs nationally.
The top three states: Texas, Florida and North Carolina. The “worst” states in the ranking: California, followed by New York and Illinois.
Longtime and new members can pick up tips about how to get the most value from OMA membership from this short video.
Remember, everyone in your company can access OMA services under your company’s membership. Forward this video to others in your company so they learn how to create a profile and subscribe to services they value.
Large beer manufacturers were caught off guard last week when advocates for craft beers and wholesale distributorships teamed up to restrict the ownership stake a beer manufacturer can have in a beer distribution business.
Both Anheuser-Busch and MillerCoors operate large breweries in Ohio. An amendment to Senate Bill 48 will prevent a large brewery from owning a wholesale distribution business. Luiz Edmond, President of OMA member company, Anheuser-Busch InBev, wrote a protest letter to House and Senate leaders.
The proposal moved through the House and Senate in less than five hours. In his letter, Edmond alleges improper public notice and urges policymakers to rectify the problem. Per the Columbus Dispatch: “House Speaker William G. Batchelder said he disagreed with the brewer’s contentions that the rapid-fire process to pass the bill was improper. The Medina Republican said he does not want to see the company, which he noted is based in Belgium, buying up distributors in Ohio.”
The governor signed the bill into law.
The state’s Joint Committee on Agency Rule Review (JCARR) unveiled an online tool that makes it easy to track state agency rule activity. The website allows for tracking of rules by subject and by individual rule. Users receive email alerts when a rule has any action taken on it.
JCARR is a legislative committee consisting of members from the Ohio Senate and Ohio House. JCARR has the ability to recommend that a rule be invalidated if it does not meet certain criteria. Thus, JCARR is a legislative check on the executive branch of state government.
JCARR is currently chaired by Rep. Ross McGregor (R–Springfield) of OMA member company Pentaflex.
Writes Joe Trauger, Vice President of Human Resource Policy: “On April 17, the Senate Gang of Eight introduced S. 744, the “Border Security, Economic Opportunity, and Immigration Modernization Act.” Immigration reform is at the forefront of both the Congressional and Administration’s agenda, and manufacturers are supportive of a bipartisan, comprehensive solution to the country’s immigration problems. Introduction of this bill is a firm first step towards that goal.
Manufacturers are significantly impacted by the lack of workers with skills to meet the needs of advanced manufacturing at all levels. As Congress begins work on immigration legislation, will you email, write or call your member of Congress?”
Three “right to work” bills were introduced in the Ohio House this week. The bills’ sponsors are Rep. Ron Maag (R-Lebanon) and Rep. Kristina Roegner (R-Hudson). One bill affects private sector unions (House Bill 151), another impacts public sector unions (House Bill 152), and the third (House Joint Resolution 5) places both bills on the ballot.
Organized labor followed a Roegner and Maag press conference with protests. Labor tied the bills to the doomed Senate Bill 5 of the last legislative session. One labor leader invoked Nazi Germany in reference to the proposals.
Senate President Keith Faber (R- Celina), speaking to the press, seemed to say the measures are dead-on-arrival. Meanwhile, an independent group is circulating petitions to place “right to work” on the ballot, either this fall or next.
Cuyahoga County Executive Ed FitzGerald this week announced his candidacy for governor in the 2014 General Election. A lawyer, former FBI agent, and former mayor of Lakewood, FitzGerald, 44, will take on incumbent Gov. John Kasich.
FitzGerald is the only Democrat who has declared. Former Attorney General Richard Cordray’s name has been tossed around for the race, but it appears increasingly unlikely that he’ll run. It seems that the party might manage to avoid a primary for the state’s top executive position.
FitzGerald looks to run as a reformer, saying: “As county executive I helped to dismantle a corrupt patronage machine that was choking our county government. The people in this county had lost faith that county government could be effective, efficient, and transparent, and honest, and we did restore that faith…The pay-to-play system in state government is as bad as it’s ever been with the governor’s lobbyist friends making millions.”
A new economic impact study released by the Motor & Equipment Manufacturers Association (MEMA) in collaboration with IHS confirms that the motor vehicle parts manufacturers industry, made up of the original equipment, aftermarket, heavy duty and remanufacturing sectors, is the largest employer of manufacturing jobs in the United States.
The industry directly employs more than 734,000 American workers and generates 2.3 percent of the total U.S. GDP.
With 89,423 workers directly employed in the manufacture of vehicle parts, Ohio was second only to Michigan, which has 102,624 workers in the industry. Here's an interactive state by state employment map.
A joint meeting of the Ohio House and Senate this week heard presentations on state and regional economic development efforts to attract more federal investment in Ohio for unmanned aerial systems (UAS).
Ohio has been working to gain designation as one of six federally approved test ranges.
Andre Porter, one of five PUCO commissioners, will become the new Director of the Department of Commerce, it was announced this week. Porter takes the position vacated by David Goodman, whom the governor moved to the Development Services Agency a few weeks ago.
Porter was appointed to the PUCO job in 2011. He is an attorney who had practiced utility and real estate law.
Yannis Skoufalos, Global Products Supply Officer of The Procter & Gamble Company, together with the National Association of Manufacturers (NAM), is hosting a recognition event in honor of Representative Steve Chabot on Monday, April 22 at noon at the Procter & Gamble headquarters in Cincinnati. Rep. Chabot has earned the NAM Legislative Excellence Award, which recognizes legislators who consistently support the manufacturing agenda. Stop by if you can.
Here are the other Ohio members of Congress who have earned the award: Rob Portman (R), Steve Austria (R -7), John Boehner (R-8), Bob Gibbs (R-18), Bill Johnson (R-6), Jim Jordan (R-4), Steve LaTourette (R-14), Bob Latta (R-5), James Renacci (R-16), Jean Schmidt (R-2), Steve Stivers (R-15), Patrick Tiberi (R-12) and Michael Turner (R-3).
House Republicans stripped Governor Kasich’s proposed Medicaid expansion from the biennial budget bill. In announcing this, Speaker Bill Batchelder talked of a split House Republican caucus that could not produce enough votes to approve the expansion. The governor appears undeterred and will continue to push for the expansion.
The U.S. Supreme Court, in a decision last year, gave states the right to opt-in or opt-out of the expansion option contained in the federal Affordable Care Act. Under the expansion, coverage would be extended to poverty levels of up to 138%. The expansion would bring an estimated $13 billion into the state over the next seven years, and cover about 275,000, mostly working adults.
The expansion could not escape its connection to “Obamacare” with some Republicans in the caucus, according to Rep. Barbara Sears (R – Monclova Township). Sears, the caucus leader on Medicaid issues in the budget, and an experienced and knowledgeable legislator on all health care issues, voted against the substitute bill that stripped away the Medicaid expansion.
The OMA supports the Medicaid expansion and has urged continued work with the federal government to gain more flexibility for innovation at the state level.
In a victory for OMA member manufacturers, the U.S. Supreme Court on Monday wiped out an appeals court decision that had ruled in favor of consumers who brought a class action case against Whirlpool. The court remanded the Cincinnati-based Sixth U.S. Circuit Court of Appeals decision, in light of the 5-4 Supreme Court ruling last week in another consumer case involving Comcast Corp.
In the Comcast case, the court ruled in favor of the cable company over how much it charged a group of cable TV subscribers. The court said 2 million subscribers in the Philadelphia area could not sue Comcast as a group.
The OMA joined with other state and national trade associations in petitioning the court in defense of appliance manufacturers.
The American Society of Civil Engineers released its 2013 Report Card for America’s Infrastructure. The overall grade for American infrastructure is a D+, slightly up from the last report card issued in 2009.
The society members assign grades according to the following eight criteria: capacity, condition, funding, future need, operation and maintenance, public safety, resilience, and innovation. Since 1998, the grades have been near failing, averaging only Ds, due to delayed maintenance and under-investment across most categories.
In Ohio’s report card: $12.6 billion needed for drinking water and $14.2 billion for wastewater over the next 20 years, 427 high hazard dams, 2,462 structurally deficient bridges, and 42% of roads in poor or mediocre condition.
At its quarterly meeting this week, the OMA board of directors elected Janet Schepcoff, Plant Manager, Dupont Circleville site, as a director.
Schepcoff was previously the operations leader for the Aniline Enterprise in DuPont’s Chemical Solutions business. She has 31 years of service with DuPont in numerous assignments of increasing responsibility.
She started her DuPont career as a chemical engineer at the Victoria, Texas site. She is a native of Pittsburgh, Pa., and received a B.S. in chemical engineering from the University of Pittsburgh. She is married and has a son and two daughters. Janet and her husband have located in the central Ohio area from the Houston, Texas area.
Rick Schostek, chairman of the OMA board of directors, said that the OMA board is focused on increasing its diversity to better represent today's face of Ohio manufacturing. "All OMA members will benefit from Janet's leadership and experience."
When the Ohio Steel Council met with state elected and appointed officials at a reception this month, its members had a lot to crow about. A recent steel industry economic impact study produced by the Cleveland State University Center for Economic Development found that Ohio ranks second among all state in total raw steel production, behind only Indiana.
Further, raw steel producers employ nearly 18,000 people in Ohio with a payroll of $1.2 billion. The steel industry has invested $2.5 billion in Ohio over the past three years.
The OMA Board of Directors this week voted to support Governor Kasich’s proposal to expand eligibility for Medicaid under the federal Affordable Care Act. Under the act, states have the option to expand eligibility to 138% of poverty, financed for 3 years at 100% by the federal government and 90% in later years.
The board passed the following resolution: “RESOLVED, the OMA Board of Directors supports the governor’s Medicaid expansion proposal because of its economic and health benefits to the state of Ohio. The board also encourages Ohio’s elected officials to continue to explore alternative options to the “all or nothing” Medicaid expansion election in order to mitigate impacts on the federal debt and to contain Ohio’s Medicaid costs in the out-years.”
Senator Rob Portman is hosting an Ohio Jobs and Workforce Development Summit and invites OMA members to participate. The summit is “an opportunity for business leaders to discuss their unique needs for talent, ideas to increase efficiency, and best practices for collaborating to create more job opportunities and economic growth for Ohioans.”
The summit is scheduled for Friday, April 12, in Lewis Center. The OMA is a sponsor of the event. The senator seeks your insights in developing solutions for workforce needs.
This week the Ohio Senate re-merged the Transportation Budget and the Turnpike Bill into House Bill 51.
The House rejected the Senate amendments and a conference committee was named.
The Senate made several changes to the bill including: raising the speed limit on freeways to 70mph, freezing tolls at current levels for 10 years for local commuters using E-ZPass and traveling fewer than 30 miles, allowing triple-trailer trucks to travel within two miles of the turnpike without having to get special permits, and increasing the length of certain single vehicles from 40 to 50 feet without having to get a special permit.
However the Senate removed the provision that would have increased the weight limit on trucks on state roads from 80,000 lbs. to 90,000 lbs. The OMA has supported this amendment and encourages OMA members for whom this is important to contact the legislators serving on the conference committee immediately.
David Goodman, the current director for the Ohio Department of Commerce, will assume the director role of the Department of Development Services (DSA). Current DSA director, Christiane Schmenk, has stepped down to pursue opportunities outside of state government. The DSA is the former Department of Development. The leadership switch will take effect March 18.
The Senate continued holding hearings on House Bill 35, the state’s transportation budget this week. An amendment added by the House that would allow increased truck weight limits on state highways found strong opposition from the railroads. The Senate appears to be backing down in the wake of the railroads’ “the sky is falling” testimony.
Senator Gayle Manning (R-North Ridgeville), Chair of the Senate Transportation Committee, announced a substitute version of the bill will be introduced into committee next Monday with a probable vote to quickly follow.
We've assembled a few tools to help you navigate the 130th General Assembly: Here are the House and Senate leadership teams and the House and Senate committees. These policy leaders will be key on the issues that impact manufacturing over the next four months; here's the legislative schedule.
On behalf of the OMA, Scott Blue, Plant Manager,Kenworth Truck Assembly Plant, Chillicothe, testified this week before the House Commerce, Labor and Technology Committee on House Bill 37 and before the Senate Commerce and Labor Committee on Senate Bill 25. The bills would modify unemployment compensation laws to enact a new "short-time unemployment compensation" program.
Blue said: “This concept, also known as shared work compensation, offers an alternative to employers facing a reduction in work force. Instead of laying off employees, the employer reduces the hours of work each week among a specific group of employees.”
Noting current temporary federal law which the bill seeks to take advantage of, Blue stated: “Through the middle of 2015, shared work benefits would be funded by the federal government. In other words, over the next two years, this program would benefit both Ohio employers and employees without significant downside for either group. And because employer participation in a shared work plan is voluntary, when the federal funding ends, employers can simply choose not to participate and avoid the potentially harmful effect on their unemployment tax rate.
These are the materials that support the March 6, 2013 OMA Government Affairs Committee meeting. The meeting starts at 9:30 a.m.
Last week MIT released a preview of its Production in the Innovation Economy project. The project focuses on “pathways through which an invention or a new idea about a product or a way of improving a product or process get made into goods and services for sale in the market.” It aims to create an agenda for public action to strengthen U.S. industry.
Researchers conducted 255 interviews with company executives. Of those, 37 were interviews in Ohio. Those interviews sought to “understand strategies for locating innovation, prototyping, pilot production, test and demonstration, early-stage manufacturing and full-scale commercialization in the United States and abroad.”
The researchers report: “(W)hat’s held manufacturing in the United States in the last resort—even as so much turned against it—was the advantage firms gain from proximity to innovation and proximity to users. Even in a world linked by big data and instant messaging, the gains from co-location have not disappeared.”
A note on Germany: “It’s impossible to understand the different fates of manufacturing in the U.S. and Germany without comparing the density and richness of the resources available in the industrial ecosystem across much of Germany to the thin and shrinking resources available to U.S. manufacturers across much of our country.”
The full report is expected in the fall.
The “Ohio Medicaid Expansion Study,” a partnership between the Health Policy Institute of Ohio, the Ohio State University, Regional Economic Models, Inc., and the Urban Institute, has released a policy brief describing the impact of potentially expanding eligibility for Medicaid in Ohio.
This brief provides state policymakers with an analysis of the impact of a potential Medicaid expansion on the state budget, Ohio jobs and earnings, the number of uninsured in Ohio, and health care costs for Ohio's employers and consumers.
Read a summary here.
In the president’s state of the union address last week, he said, “Last year, we created our first manufacturing innovation institute in Youngstown, Ohio. A once-shuttered warehouse is now a state-of-the art lab where new workers are mastering the 3D printing that has the potential to revolutionize the way we make almost everything.”
Almost a year ago, President Obama announced the National Network for Manufacturing Innovation (NNMI), with up to fifteen Institutes for Manufacturing Innovation located around the country. These institutes would bring together industry, universities and community colleges, federal agencies, and the states to accelerate innovation by investing in “industrially relevant manufacturing technologies with broad applications.” The Youngstown National Additive Manufacturing Innovation Institute (NAMII), which got legs last August, serves as the proof of concept site.
Manufacturing, hard hit over the past two decades, will outpace the U.S. and accelerate growth in northeast Ohio, according to a recent report prepared by Moody’s Analytics for Team NEO.
From the report: “From 1990 to 2010 there was a significant gap in the growth of manufacturing gross product between Northeast Ohio and the US. Both the US and Northeast Ohio grew in the early ‘90s, but Northeast Ohio began to lag in the late ‘90s while the US continued to climb. Both Northeast Ohio and the US were hit hard by the 2007 recession. Northeast Ohio manufacturing output is projected to reverse this trend by growing faster than the US over the next decade. The US is projected to grow 33% from 2010 to 2020, Northeast Ohio is projected to grow 39%.”
“Projections indicate that all of the top ten sectors of Northeast Ohio manufacturing are expected to grow through 2020. Three of the top four sectors – plastics and rubber, chemicals and fabricated metal – will grow faster than total manufacturing, becoming even more important to the Northeast Ohio economy,” according to Moody’s.
Governor John Kasich delivered his third State of the State Address before a joint session of the Ohio General Assembly at the Veterans Memorial Civic & Convention Center in Lima on Tuesday. It was a stemwinder of a speech; you can watch it here.
The OMA released a statement saying: “We were heartened by the Governor’s laser focus on the issues that are essential to creating an environment in which Ohio manufacturers can succeed – issues such as competitive taxes, accessible and affordable energy, infrastructure improvements, upgraded workforce training and vocational education, and initiatives that foster innovation and creativity. We applaud the Governor’s commitment to manufacturing as a necessary economic driver.”
Special interests are circling the Statehouse to pick apart proposed reforms. Make sure you contact your legislators to urge support for pro-manufacturing reforms.
The Ohio Office of Budget and Management released projected funding levels for Ohio’s colleges and universities in the first year of the governor’s biennial budget. The budget proposes a 1.9%, or $33 million, increase in state share of instruction in fiscal year 2014 over the current year for both universities and community colleges. FY 2015 projections are not available.
Last week Governor Kasich unveiled a budget proposal full of dramatic changes in the operation and funding of state government. This week his budget took form as a bill, House Bill 59.
Read it here. Stay tuned to the OMA Leadership Briefing, and the OMA policy committees, to engage in understanding, improving and moving government reforms forward.
This week the National Association of Manufacturers (NAM) released its policy priorities in a document called A Growth Agenda: Four Goals for a Manufacturing Resurgence in America. According to NAM CEO, Jay Timmons, "This policy blueprint has bipartisan appeal and features four central aspirations upon which we all can agree."
The four central themes are: 1) The United States will be the best place in the world to manufacture and attract foreign direct investment; 2) Manufacturers in the United States will be the world’s leading innovators; 3) The United States will expand access to global markets to enable manufacturers to reach the 95 percent of consumers who live outside our borders; 4) Manufacturers in the United States will have access to the workforce that the 21st-century economy demands.
NAM invites all of us to use the document to advance manufacturing among lawmakers and opinion leaders and others within our circles.
National Association of Manufacturers (NAM) president and CEO, Jay Timmons, testified this week before the U.S. House Education and Workforce Subcommittee; the hearing, entitled “Challenges Facing America's Workplaces and Classrooms,” was the committee’s first hearing of the new 113th Congress.
Timmons’ testimony highlighted labor policy, workforce development and immigration in support of manufacturing.
Regarding labor, Timmons testified that, “The National Labor Relations Board’s (NLRB) aggressive agenda threatens jobs and undermines employer–employee relations.”
About aligning education and workforce, Timmons promoted the NAM-endorsed Manufacturing Skills Certification System, a series of nationally portable, industry-recognized credentials based specifically on employer-identified skills.
On immigration, Timmons said, “Manufacturers need a functional legal immigration system that efficiently deals with the lack of necessary green cards and visas.”
The OMA Public Policy staff evaluates every bill that is introduced in the Ohio General Assembly. Every bill that has potential to impact manufacturing competitiveness is flagged to follow.
On OMA’s web page bill tracker, you can see the bills – categorized by issue area – from the 130th General Assembly which OMA is following, including bill status and links to bill text and bill analysis.
According to a state transportation planning commission, road construction financial constraints have pushed 21 “critically needed projects” as far back as a decade or more from their original start dates. The Kasich administration aims to float $1.5 billion in turnpike-backed bonds to accelerate these and other transportation infrastructure projects.
The turnpike plan is included in the transportation budget, House Bill 35. The bill is sponsored by Rep. Ross McGregor (R-Springfield).
The availability of these additional highway dollars, primarily for use in northern Ohio, will permit the Ohio Department of Transportation to apply its traditional funding sources to accelerate completion of high-priority projects throughout the rest of the state.
Infrastructure reinvestment is a priority issue for the OMA.
The Office of Budget and Management released local district breakdowns of Governor Kasich’s school funding proposal.
The documents lay out school districts’ shares of the $6.2 billion and $6.4 billion in foundation funding for fiscal years 2014 and 2015.
See how the governor’s K-12 budget affects your districts, counties and joint vocational districts.
Chairman Kirk Schuring (R-Canton) this week released the final report of the House 21st Manufacturing Task Force. The task force's five Republicans and four Democrats approved the report unanimously.
The task force produced a comprehensive set of findings from testimony from manufacturing leaders during the latter half of last year: workforce development, research and development, regulation, energy, tax, trade, transportation, workers’ compensation, and recycling.
Concludes the report: “Ohio has one of the strongest manufacturing sectors in the United States and the world. It is a large part of our state’s Gross Domestic Product (GDP) and stimulates growth in other sectors of our economy. Unfortunately, there has been a trend over the years by those outside manufacturing to undermine its importance and improperly characterize it as old and unexciting. The truth is quite the contrary.”
The OMA thanks Speaker Batchelder, Chairman Schuring, and all the members of the task force for their work and looks forward to achieving policy outcomes that strengthen Ohio’s economic engine.
Governor Kasich decided to take the Medicaid expansion option in the federal Affordable Care Act. At the end of the analytic day, the financial benefits to the state and to the poor were just too big to decline.
The governor’s decision to extend Medicaid eligibility to adult Ohioans with incomes up to 138 percent of poverty will increase overall Medicaid appropriations but decrease the state share. Approximately 366,000 Ohioans will become newly eligible for Medicaid, but 91,000 Ohioans who are eligible for Medicaid today will move off the program (they will have the option to seek coverage on the new federal Health Insurance Exchange).
These enrollment changes are expected to increase Medicaid spending $500 million in FY 2014 and $1.9 billion in FY 2015. However, the state share decreases $23 million in FY 2014 and $68 million in FY 2015 because the state saves from current enrollees leaving the program and the federal government covers 100 percent of the cost of the newly eligible population.
The expansion, then, will result in $2.4 billion in federal funds coming into the state during the next two years to cover those who are newly eligible. The state also expects to net $235 million because of a boost in tax revenue on the activity.
The governor’s decision is supported by a broad coalition of chambers of commerce, health care organizations, and religious and civic groups. It is being trashed by some in the national conservative media.
On January 25, 2013, in Noel Canning Div. of Noel Corp. v. NLRB, the U.S. Court of Appeals for the District of Columbia held that President Obama’s recess appointments of three members to the National Labor Relations Board (NLRB) were invalid and that the NLRB lacks a quorum to issue decisions.
According to a brief by OMA Connections Partner, Taft, when fully staffed, the NLRB has five members. Three members come from the president’s party and two from the opposite party. A quorum requires three members. The president can fill NLRB vacancies temporarily by making recess appointments while the Senate is in recess.
In Noel Canning, the court ruled that the Senate was not in recess on January 4, 2012 when the president made the alleged recess appointments and that the three attempted recess appointments – members Sharon Block (D), Terence Flynn (R) and Richard Griffin (D) – were invalid.
The court’s ruling leaves Chairman Mark Gaston Pearce (D) alone on the Board without a quorum. If the court ruling stands, the NLRB could not issue any decisions or rules until the Senate confirms NLRB nominees. The validity of many significant and controversial NLRB decisions in the last year would be in doubt.
The Supreme Court will almost certainly address this issue given its importance. Here's how the NLRB described the situation.
One in six Ohioans, two million people, live in poverty, according to a new report from the Ohio Association of Community Action Agencies. Ohio’s poverty rate of 16.4 percent exceeds the national average of 15.9 percent. Poverty in the state has increased by 57.7 percent since 1999.
An Ohio manufacturing resurgence, and Ohio’s shale gas development, offer hope for helping Ohioans in poverty get out of it, says the association’s executive director, Phil Cole.
This week the Ohio House of Representatives introduced ten bills it classified as priorities.
House Bill 1, typically reserved for the body's highest priority, will be known as "OhioMeansJobs."
The House's description: "This legislation rebrands Ohio’s patchwork of workforce centers, currently referred to as “One-Stops,” as “Ohio Means Jobs _____ County” to ensure consistency, reduce public confusion, and connect these centers directly to OhioMeansJobs. It also requires all workforce investment boards to use OhioMeansJobs as the only job matching tool by July 2013 to streamline job-matching services, reduce duplication, and maximize this increasingly important benefit to Ohioans."
Other priority House bills involve school safety, unemployment services, municipal income taxes and local government performance measure grants.
Governor Kasich unveiled his biennial budget for K-12 education this week. The budget proposes to increase overall spending by 6% in the first year and 3% in the second year of the biennium.
The governor aims to reduce financial disparity between high and low wealth districts. No district would get less money year to year, and the lowest wealth districts would receive the largest funding increases.
Taking a page from the federal Race to the Top program, the budget proposes a $300 million innovation fund from which districts would compete for one-time grants to improve education. The budget targets additional money to poor students, elementary students struggling with reading, gifted students, and special needs students. And, the budget expands the availability of private school vouchers for poor kindergarten children.
In all, the budget proposes to send $7.4 billion in its first year and $7.7 billion in the second year to the state’s 613 school districts.
Watch the governor and his team discuss the budget in a town hall meeting.
On August 22, 2012, the U.S. Securities and Exchange Commission (SEC) adopted final rules that require an SEC reporting company "having conflict minerals that are necessary to the functionality or production of a product manufactured or contracted by that [reporting company] to be manufactured, shall file a report on Form SD ...
Conflict minerals are currently limited to tantalum, tin, tungsten and gold. Companies that must comply with the new Form SD disclosure are required to file on a calendar year basis by May 31 (starting with May 31, 2013) covering the previous year.
OMA Connections Partner, Squire Sanders, has prepared guidance for companies that must comply.
A recent analysis by the U.S. Department of Commerce shows Ohio as the second most manufacturing-dependent counties in the nation. Manufacturing-dependent counties are counties where at least 20 percent of earnings come from manufacturing work.
The most manufacturing intensive Ohio county? Shelby, where manufacturing's share of total earnings is 52 percent.
Ohio is one of seven states where at least 10 percent of jobs are in manufacturing, and Ohio has the third most manufacturing workers in the nation.
Governor John Kasich has formally asked the General Assembly to hold the annual State of the State address February 19 at Veterans Memorial Civic Center in downtown Lima.
The legislature has agreed to convene a special joint session in Lima. The address is proposed to start at 6:30 p.m.
OMA members who might wish to obtain tickets to the address should contact OMA's Ryan Augsburger.
Governor John Kasich travelled to Davos, Switzerland to attend the World Economic Forum and speak on Ohio's education and training programming. Here he is interviewed by Wall Street Journal's Matt Murray, and here is a blog post from the World Economic Forum written by the governor.
A main focus of the governor's talks: business must be better joined with academics in Ohio.
The state's high court this week opted to take the case which will decide whether ProgressOhio, a liberal think tank, has standing to bring its case against JobsOhio.
ProgressOhio maintains that use of state liquor profits to fund JobsOhio, a private economic development entity, violates the Ohio Constitution.
Manufacturers concerned about the financing of JobsOhio should contact OMA’s Ryan Augsburger.
This week Speaker Batchelder announced the committee assignments for all of the standing committees and subcommittees of the House of Representatives.
The speaker earlier announced who would serve as committee chairmen.
The House is tentatively scheduled to begin committee work in the next two weeks.
Judith French was sworn in as the 155th Ohio Supreme Court Justice this week. She was appointed to the court by Governor Kasich to replace retiring Justice Eve Stratton. Justice French will serve until the next general election, in 2014.
Justice French has a distinguished public service record. She is highly regarded as a lawyer and as a jurist. The OMA congratulates Justice French on her achievement.
Governor Kasich’s biennial budget will be released February 4 in the budget “blue book.” This is a widely anticipated event, to say the least, as the budget is the governor’s playbook not just for funding state government, but also for reforming elements of it.
The governor has promised a major overhaul of the state tax system, specifically the state personal income tax. The top rate of the Ohio income tax is 5.925 percent (on incomes above $204,200). The governor wants to drive that top rate down significantly.
Speculation is rampant about where he’ll find the revenue to achieve the reduction. The state income tax generates $9 billion in annual revenue. So, a reduction of, say, 30 percent would reduce state revenue by $3 billion. That’s money coming from somewhere; prepare for a political ruckus.
Learn the details of the budget, and all of its implications to manufacturers, by attending the OMA Tax Committee on February 12, and the OMA Government Affairs Committee on March 6. Call-in options are available for both meetings. Register for in-person or call-in participation.
The American Society of Civil Engineers (ASCE) released a report this week that estimates the lost income cost of infrastructure under-investment at $3,100 per year per American. The study, “Failure to Act: The Impact of Current Infrastructure Investment on America’s Economic Growth,” looks at the economic consequences of the country’s continuing under-investment in infrastructure.
ASCE finds that “with an additional investment of $157 billion a year between now and 2020, the U.S. can eliminate this drag on economic growth and protect: $3.1 trillion in GDP, almost the equivalent of Germany’s entire GDP, $1.1 trillion in U.S. trade value, equivalent to Mexico’s GDP, 3.5 million jobs, more than the jobs created in the U.S. over the previous 22 months, $2.4 trillion in consumer spending, comparable to Brazil’s GDP, and $3,100 in annual personal disposable income.”
A just released study by the Health Policy Institute of Ohio found that Medicaid expansion under the Affordable Care Act (ACA) would increase costs of the state by nearly $2.5 billion by 2022.
But, due to savings in other programs, increased tax collections, and revenues coming from the added federal health-care spending, the report claims that the state would bring in $1.4 billion more than the increased spending over the period.
After state fiscal year 2021, the study projects that costs will slightly exceed the income benefits. The report found that about 450,000 of the 1.6 million uninsured Ohioans would find coverage under the ACA and the Medicaid expansion.
The U.S. Supreme Court last year struck down the Medicaid expansion mandate in the ACA and made the decision to expand one for the states to make.
Speaker Batchelder announced the House of Representative Committee chairmen. Ron Amstutz (R- Wooster) was again appointed to lead the House Finance Committee. Jeff McClain (R-Upper Sandusky) will serve as Vice Chairman.
Other committee leadership assignments important to manufacturing: Jim Butler (R-Dayton) will head the Judiciary Committee, Bob Hackett (R-London) will run the Insurance Committee, Peter Stautberg (R-Cincinnati) will lead the Public Utilities Committee, and Nan Baker (R-Westlake) will run the Economic Development and Regulatory Reform Committee.
The complete list of committee rosters has not been released yet.
Speaker Bill Batchelder (R-Medina) this week announced the creation of a Manufacturing and Workforce Development Committee in the Ohio House of Representatives.
The committee will be chaired by Rep. Kirk Schuring (R-Canton). Its vice chair will be Rep. Mark Romanchuk (R-Ontario). The committee is an outcome of the Ohio 21st Century Manufacturing Task Force that conducted regional hearings hosted by manufacturers last year. Rep. Schuring was the chair of that task force.
Rep. Romanchuk is a freshman legislator from Richland County. Mark and his wife Zoe are OMA-member manufacturers.
The OMA thanks Speaker Batchelder for his recognition of manufacturing as Ohio’s economic engine and for creating a committee that can fashion public policy that protects and grows Ohio manufacturing.
The Consumer Product Safety Commission - currently made up of two Democratic appointees and one Republican appointee - appears likely to continue taking an energetic approach to implementing its rules in 2013. For those companies that report to the CPSC, these areas are worth watching in the new year. From OMA Connections Partner, Roetzel & Andress
On Monday, the 130th General Assembly was sworn in. William Batchelder of Medina County will continue as the Speaker of the House of Representatives, while Keith Faber of Mercer County was sworn in as the new Senate President. He replaces the former Senate President Tom Niehaus, who left the General Assembly due to term limits.
Both chambers announced their hearing schedules for next year.
The Ohio House manufacturing task force appointed by Speaker Bill Batchelder last summer wrapped up its regional hearings last month. The task force is now preparing a report.
The task force heard from an unprecedented number and variety of manufacturing leaders over half a year. You might be interested in seeing an outline of the testimony compiled by OMA. There is extensive detail within the testimony underneath the outline.
The Ohio Senate this week announced its committee structure and chairmen for the 130th General Assembly. Senator Scott Oelslager was appointed to chair the powerful finance committee. He will team with Senator Bill Coley who was named the committee’s vice chairman. Both legislators have previous experience serving on the Senate finance committee.
Other committees of note: Senator Bill Seitz will chair the public utilities committee, Senator Bill Beagle will chair workforce and economic development, and Senator Kevin Bacon will be chair of the commerce and labor committee. In addition to his duties with the finance committee, Senator Coley will chair the civil justice committee. The Senate is scheduled to begin committee hearings later this month.
The federal mediator working with the International Longshoremen's Association (ILA) and the U.S. Maritime Alliance (USMX) issued a statement announcing a 30-day extension of the current contract to January 28, 2013 and averted the threat of a strike on December 30, 2012 at the East and Gulf Coast ports.
It was also announced that an agreement, in principle, has been reached on one of the most contentious issues in the negotiations - container royalty payments. Talks continue this month to attempt to reach agreement on all remaining issues and to achieve an overall collective bargaining agreement.
The National Association of Manufacturers will continue to encourage a speedy resolution to the agreement to lift the uncertainty surrounding the status of these ports.