News and Analysis
Nearly two weeks ago, Ohio lawmakers left the Statehouse without passing a new two-year budget, thereby failing to meet the June 30 budget deadline. Due to House-Senate disagreements on several issues, both chambers instead passed continuing resolutions on June 29 and 30, allowing the state government to continue to function.
Over the past 12 days, budget negotiations have been conducted behind the scenes. The continuing resolution for the main operating budget expires Wednesday, July 17. Therefore, final action is likely to occur early next week. Learn more about tax issues included in the pending budget bill (House Bill 166).
The House and Senate are scheduled to be in session the middle of next week. After that, lawmakers are not slated to be in session again until mid-September.
A smaller budget bill (House Bill 80) to fund the Bureau of Workers’ Compensation (BWC) is also at an impasse due to disagreement over costly expansions to benefits. The bureau is operating under a continuing resolution that will expire July 30. Final action on the BWC budget could come next week or could languish until the end of the month. Learn more and take action to urge lawmakers to reject the proposed benefits expansion. 7/11/2019
Canada and Mexico buy more manufactured goods from Ohio than the rest of the world combined. Without tariff-free trade across North America, Ohio’s manufactured exports to these neighboring nations could face up to $3.1 billion in extra taxes (compared to zero tariffs today).
That’s why Ohio manufacturers support efforts by the Trump administration to push aggressively for timely ratification of the U.S.-Mexico-Canada Agreement (USMCA), which would replace NAFTA. The OMA has conveyed its support to Ohio’s congressional delegation. Click here to email your member of Congress and tell him/her why manufacturers support prompt consideration of the USMCA. 7/9/2019
Ohio has cracked the top 10 list of CNBC’s 2019 “Top States for Business” study. At No. 10 overall, the Buckeye State jumped five spots from last year’s rankings. This marks the first time Ohio has made the network’s top 10 since the study started 13 years ago.
CNBC’s comparison examines 64 metrics across 10 categories of competitiveness. A key reason for Ohio’s improvement is its standing in infrastructure (No. 4) and cost of doing business (No. 8). Ohio also fared better than average in education (No. 11), technology and innovation (No. 13), access to capital (No. 13), cost of living (No. 15), and workforce (No. 17).
The best three states for business according to CNBC are Virginia, Texas, and North Carolina. The bottom three are Rhode Island, Hawaii, and Mississippi. 7/10/2019
For the first time since 2009, Ohio lawmakers have failed to meet the June 30 deadline to finalize the state’s two-year budget (House Bill 166). A 17-day stopgap measure has been passed and signed to fund government operations and give lawmakers more time to reach an agreement.
A joint House-Senate committee has faced several sticking points caused by differences between the two versions of the main operating budget. The budget bill contains several items that would impact manufacturers, including workforce funding, tax provisions, and numerous smaller changes.
The legislature also failed to meet Sunday’s deadline for approving House Bill 80, the funding measure for the Ohio Bureau of Workers’ Compensation. (See the story in the “Safety & Workers’ Compensation” section.)
Upon signing the temporary funding measures for both state operations and the BWC, Gov. Mike DeWine urged both chambers to continue negotiations and reach a timely compromise. The OMA will keep members updated as negotiations look to stretch into the next week. 7/1/2019
OMA Connections Partner Gilmore Jasion Mahler will host its Manufacturing & Distribution Financial Executive Roundtable in northwest Ohio on Thursday, July 18, in Findlay and Maumee. The event will focus on the transformation of the automotive industry and its effects on the broader economy. Guest presenter Lawrence Keyler, RSM‘s global automotive expert, will provide the big picture for all manufacturers, not just automotive. The sessions are open to manufacturing financial executives and there is no cost to attend. RSVP here and specify the session you plan to attend. For more details, click here. 7/1/2019
Manufacturing companies with sales from $5 million to $50 million that want to expand into foreign markets can get a head start through the GlobalTarget Program. The nine-month program was created by the Monte Ahuja College of Business Global Business Center at Cleveland State University, along with the SBDC Export Assistance Network, the U.S. Commercial Service, and other regional and international organizations. According to the export experts at the Ohio Development Services Agency, companies will gain knowledge and tools on operating in global markets, as well as best practices to execute their global strategies. 7/1/2019
Members of the House and Senate continue to negotiate differences between the chambers’ versions of the state’s two-year main operating budget, House Bill 166. The spending plan contains several major policy provisions that would affect manufacturers — including workforce funding, numerous tax provisions, and a plethora of smaller changes.
The HB 166 conference committee convened Tuesday to receive the latest revenue estimates from OBM and LSC. Conferees were told that tax revenue for the current fiscal year — as well as the two covered by the new budget — would be hundreds of millions more than the estimates used at the beginning of the budget writing process. After the hearing, the committee recessed until a later date, which was still unknown as of the deadline for this issue of the Leadership Briefing.
The conferees have a deadline of 11:59 p.m. Sunday, June 30, to provide a final budget agreement. If the committee fails to produce a report that is accepted by the House and Senate, and signed by the governor, then the state would require a continuing resolution — a temporary funding measure to provide for the functions of state government. Both the House and Senate are scheduled to be in session for the weekend in anticipation of a budget agreement. 6/27/2019
Nationwide, manufacturers were feeling more cautious about their economic prospects in the second quarter, according to the NAM’s latest Manufacturers’ Outlook Survey. While 79.8% of American manufacturers rated their outlook as positive, that was a drop from 89.5% in the first quarter of 2019. When analyzing specific issues, 68.8% of respondents said workforce was their top concern. On trade, 56.0% reported uncertainty due to the USMCA, U.S.-China trade disputes, the threat of Section 232 auto tariffs, and the tariffs on Mexico, which has since been resolved. 6/25/2019
According to OMA Connections Partner Dinsmore, businesses have until Sept. 30 to file a request to be exempted from the 25% tariffs (List 3) recently placed on $200 billion worth of Chinese goods on May 10, 2019. The Office of the U.S. Trade Representative (USTR) has posted instructions on how to request an exclusion of certain products covered by the Trump administration’s third — and latest — round of tariffs. Interested parties can make their exclusion requests online beginning noon Sunday, June 30. See Dinsmore’s update for more on this and other tariff-related issues. 6/26/2019
In a 5-4 ruling Thursday, the U.S. Supreme Court declared that federal courts should not decide congressional redistricting disputes. As interpreted by Poltico, the ruling is “a boon to Republicans, who control the majority of state legislatures,” which draw the congressional district maps in most states.
The ruling means Ohio will keep its current legislative districts until 2022. Republicans have held 12 of Ohio’s 16 congressional districts since the last redistricting process after the 2010 census. 6/27/2019