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Governor Mike DeWine previews a budget with a lot of spending and gets a lot of positive reaction.

But some lawmakers question where all that money is going and why some things were left out.

And an update on the second week of the trial of Republican former House Speaker Larry Householder.

All this weekend, the state of Ohio.

Welcome to the state of Ohio.

I'm Karen Kasler.

Lots of spending on child related concerns education, mental health and addiction services and proposals to lure more big businesses to Ohio.

Or some of the highlights of Governor Mike DeWine's third State of the State speech previewing the budget he also released this week after missing the editions of the speech in 2020 and 2021.

And after a huge reelection win in November, DeWine decided to go long this time, almost an hour in which he talked about a two and a half billion dollar fund to prepare huge sites for economic development.

After pushback he's received about the massive Intel project from parts of the state that aren't central Ohio, and he announced he intends to expand it to Ohio.

Lake Erie protection and lead pipe removal project throughout the state.

But there was more.

He talked about money for children and family concerns education, mental health and addiction services, affordable housing and law enforcement.

State House correspondent Joe Ingles reports.

DeWine told the joint session of the House and Senate that they must take bold actions now to ensure Ohio's future.

And his speech was all about his budget.

It's a budget that focuses on our people, on our families and our children.

For they are truly Ohio's greatest assets.

DeWine called on the State Board of Education to come up with a science based plan to improve childhood literacy, since, he says, 40% of third graders are not proficient in reading.

He called on Ohio lawmakers to eliminate the state sales tax on diapers, car seats and baby items.

And he wants a 20 $500 per child state tax deduction for Ohio.

To be the best state in the nation to raise a family.

We must do everything we can to better support families.

DeWine said he'd create a Cabinet level Department of Children and Youth that would consolidate programs from six agencies.

It would focus on physical health of mothers, infants and children, behavioral and mental health needs of kids and children living in foster care.

And DeWine said he wants to spend more on programs that make mental and behavioral health care more accessible.

He wants to do more research on how to deal with those issues and educate Ohioans about those illnesses.

And DeWine says his budget will invest more in child care and focus on early childhood education.

DeWine wants what he called a historic investment in the Ed Choice private school voucher program, expanding it to families up to 400% of the federal poverty level, which is $120,000 a year for a family of four.

But he also said the budget would continue to implement the new school funding formula that started a six year phased in in the last budget.

DeWine also said his budget would provide money for every public or private school that wants a school resource officer to get one.

He said he'd also expand eligibility and increase the amounts of existing college scholarships for working families and give $5,000 scholarships to the top 5% of high school graduates attending Ohio colleges and universities.

DeWine also called for tax breaks for affordable housing, including tax free savings accounts for down payments.

He cautioned nursing homes that any future money they get will be tied to the quality of their facilities.

And he called for more training for police and an upgrade of the state's technology used by safety forces.

The Republican leader of the Senate said he was delighted with what he heard.

Senate President Matt Huffman says those proposals will help with the birth rate, which has dropped slightly in the last 15 years.

There's a lot of 70 year old baby boomers sitting in restaurants wondering where the staff is.

And the answer is they weren't born for for for a lot of different reasons.

So we really need to encourage people to have children and change the policies that are preventing people or causing people to decide not to have children.

House Speaker Jason Stevens did not talk to reporters after the speech, but issued a statement praising DeWine's investment ideas and calling for a long term approach to ensure sustainability.

Stevens supporter and Assistant House Majority Leader John Cross was pleased too.

I've labeled this speech as a very bold, bullish speech matching a bear market, and I think that's actually good for us because it sends confidence to Ohioans that we're going to continue to make proper investments.

Representative Jay Edwards, who supported Stevens as speaker, will chair the House Finance Committee.

Edwards agreed on a lot of DeWine's plans, but said there's still a goal of cutting taxes.

We want tax relief for Ohioans.

We always want a big tax cut.

Now, how big that is is a question and also making sure we maintain the priorities of the governor and what the governor wants.

And Republican Representative Derek Marin, the chair of the Ohio House Republican Caucus, who was elected by a majority of Republicans after Stevens was elected speaker with fewer GOP votes than Marron says he looks forward to working with the governor.

We're here to be supportive of the governor and his plans and to reconcile, you know, our beliefs and represent our constituents and make sure that we have a good partnership with the governor.

So the legislature, we got a lot of good ideas, but we need the governor's help and the governor needs our help.

Democrats like much of the governor's budget tool.

House Minority Leader Allison Russo notes Democrats have pushed for some of those ideas.

But she says this budget doesn't go far enough to help working families.

And she's skeptical about the expansion of that choice.

Vouchers.

We can't afford to move forward any legislation that would take funding away from our public schools.

And we for sure cannot afford to prop up with taxpayer dollars.

Any voucher system that lacks transparency, accountability and which teachers hate to children.

And the leader of Democrats in the Ohio Senate says the governor's plan falls short of helping Ohioans who are set to lose Medicaid coverage later this year.

In the upcoming budget, we must also prioritize strengthening our health care system.

This means maintaining access to Medicaid for our low income workers, and an estimated 800,000 Ohioans are at risk of being removed from Medicaid rolls this year due to the end of the COVID 19 public health emergency.

The Democrats also pushed back on the idea of law enforcement reform and training without efforts to stop gun violence.

And even though Democrats are deep in the minority in this legislature, where they're outnumbered by Republicans by more than a 3 to 1 margin leader, Russo says their concerns should not be ignored.

And what we have learned in the last couple of weeks is that you can get 50 votes with a combination of Republican and Democratic votes.

And, you know, I think certainly there is some alignment in what the governor has proposed, and we'll see as we work through the House budget.

Democrats say they also want to see the legislature take action on some things that DeWine, a majority Republicans are not talking about things like protecting voting rights and drawing new legislative and congressional district maps.

Joe Ingles Statehouse News Bureau.

The State of the State speech basically coincided with the release of DeWine's third budget.

I talked about it with the director of the Ohio Office of Budget Management, Kilmarnock's.

Now, if you take just the general revenue fund spending, this budget has a 12.7% increase from the last budget that Governor DeWine proposed.

Why is there such a big increase here?

So we've seen additional growth in our general revenue funds over the past two years.

We have budgeted conservatively.

So we have a significant balance in the state's general fund right now that we consider to be that accumulated cash balance to invest in some of these big one time projects, including the Economic Development Fund, including innovation hubs, including some of the investments in the safety projects that we talked about, and to upgrade our veterans homes.

We have two veterans homes here in the state of Ohio that really need to be improved to ensure that they serve those veterans that we value.

And we need to make sure that we are doing everything we can to make their lives as good as possible.

Governor DeWine's proposed eliminating the state sales tax on baby items like car seats and diapers and that sort of thing.

The budget estimates that will cost the state around $16 million.

So what kind of tax growth do you expect knowing that that at least is in there?

So our baseline revenue projection on on our general fund, which is mostly against sales and income taxes, is a modest 2% in from fiscal year 23 to 24 and then 5% from 24 to 25.

So it is a conservative moderate growth forecast.

We want to make sure that we always project and very conservatively make sure that we have the resources to actually fund the budget and that those revenues materialize.

And so we and again, that's mostly sales taxes and income taxes.

It is it is growth over the past biennium.

But what you see is we're kind of ree based.

We're reestablishing what our new baseline is and we're using what was accumulated cash for one time purposes.

It's really important that we have a structurally balanced budget, that revenues that come in, in a given year are used for the priorities.

And in that given year, so that we don't get into a structurally imbalanced situation where we are spending more money than is coming in on ongoing projects.

So we do everything we do everything in this budget to ensure that we are carefully constructed to not hit a fiscal cliff in the future.

It looks like there's around 14 and a half billion dollars for K through 12 education.

This does that fully fund the fair school funding plan the Patterson formula that was started to be phased in two years ago.

It wasn't fully funded as well as the expansion of the Ed Choice income based voucher program.

That's right.

In this budget, they phasing of the cut Patterson plan, the General Assembly set out a plan for a six year phase.

In the last budget was the first two years.

So this budget is the second two years.

Years, three and four of that six year phase in.

And we've incorporated that into the governor's executive budget proposal along with the additional school choice options, we want to ensure that every family is able to find that best fit.

We know that kids are not one size fits all, and so we want to make sure that we have robust choices for all families across Ohio.

What's the estimate on the increases in that Ed Choice program?

Because this will allow at choice vouchers up to 400% of the federal poverty level, which is around $120,000 a year for a family of four.

What's the estimate on how many families are going to take advantage of that?

We've estimated that that could increase the education expansion program enrollment by around 20 to 25%, DeWine said.

In the State of the state speech, too, there will be a new Department of Children and Youth that will consolidate the work of six different agencies.

Will it just bring in people who are already at those agencies, or will more people be hired and potentially more state employees and more administration?

Well, the governor's plan is to bring together those programs and people across more than six state agencies, boards and commissions into a single focused agency focused on our kids.

Right now, the directors of those agencies have have a lot of priorities and some, you know, they have a slice of that focused on children.

But that's not enough.

We want there to be a single director, a single staff who are working together, coordinating.

We should see more efficiencies long term from bringing this work together.

DeWine speech was a lot about mental health and addiction, talking about getting rid of the stigma, on seeking treatment and that sort of thing.

How what kind of spending is in this budget in terms of the money that is being put toward this issue?

This budget, Kiran, in addition to kind of the continuing work of the Department of Mental Health and Addiction Services, this budget uses some of that one time money that I talked about that we have in our general fund to create the State of Ohio Action for Resiliency or the PSAs network.

And that will be a network of researchers who will really dig into what are the best practices, what is the best clinical interventions that we can provide to assist those that are struggling.

We want there to be a investment in research for mental health and addiction that is similar to the research we've seen in physical health, such as in cancer or or heart research, where we know that that individuals aren't they're not cookie cutters.

And we want to make sure that we are using and establishing what works for different people so that every Ohioan can be productive members of our community and really reach their fullest potential.

So this budget really, really does focus on mental health.

It also focuses on building out our our system of the the facilities, the structures, the workforce and the workforce.

So it increases capacity on the workforce side and on the facility side and especially again in the area of kids behavioral health.

So there's a lot of funding in here on mental health research programs.

There's money for low income kids to go to college, the ed choice expansion, affordable housing credits, which we didn't even talk about, the child deduction, elimination of state sales tax on baby items, all of this.

So how is this all sustainable?

This is sustainable care.

And because we are using one time resources for some of these one time investments, but that will have long term benefits for all Ohioans.

And we have again made sure that we are structurally balanced.

So for any of those ongoing priorities, the revenues are available in that year for the the spending on the programs within that year.

And we are able to do that by carefully constructing this budget and keeping keeping laser focused on the long term.

You talked about the surplus.

Is it fair to say where the surplus money is going to one specific area or is it being spread out throughout the budget?

It is on kind of a short list of of those major priorities, including the All Ohio Future Fund for Development for career tech facilities, which we also didn't talk about, is a major focus of of the governor's budget is to ensure that our kids in K-12 and in community colleges, students are being able to access programs for those high tech skill development, for the future.

It also invests in innovation hubs outside of the three CS so in in some of our other communities so that we can encourage innovation and work in collaboration with our universities in those communities.

It also invests in our H2 Ohio program and ensuring that we have clean water and it expands to Ohio to the whole state through a new Rivers initiative.

So that we're really excited about that, too.

It invests in our veterans homes and it invests in improving rail crossing safety at all around our state, where we have roads and rail crossings that are just, you know, safety concerns right now.

So that will bring in additional federal infrastructure dollars as well.

So it is it is a budget that is built again on a very strong foundation.

The state, for the first time in more than 40 years, has a triple-A credit rating.

And that is because we have demonstrated that our fiscal house in order.

The second week of the trial Republican former Ohio House Speaker Larry Householder and former Ohio Republican Party chair Matt Burgess is underway after Monday's testimony was canceled because Judge Timothy Black wanted to wait until COVID test results were back.

A juror tested positive and cut short court the first week.

My Statehouse news bureau colleague Andy Chow has been at the federal courthouse in Cincinnati for proceedings this week.

The big thing this week is that special FBI agent Blaine Wetzel has taken the stand for the prosecution and he's been answering questions for the prosecution all week long.

Now, basically, what he's doing and what the prosecution is doing is going day by day throughout their whole timeline to explain the connection between first energy, the five oh before known as Generation Now and Larry Householder trying to connect all the dots between all the money that flowed into the dark money group and then end up being used allegedly by Larry Householder to rise to power, become House Speaker.

Then in exchange passed House Bill six, which we know as the nuclear power plant bailout.

Now, there's been a lot of discussion of legal activity, such as raising money to build a team, to elect somebody as speaker.

Dark money is legal.

Both those things are legal.

How is the prosecution clarifying what is legal and what is not legal?

So what the prosecution is trying to connect is a story here.

But but but by from where they started with a meeting with FirstEnergy executives and Larry Householder in DC two when he became speaker two when he passed House Bill six.

And what they've been doing is they've been showing date by date the different transactions and money transfers that took place between first energy flowing into generation now and then going back to those same dates and showing different conversations that people like Larry Householder and other co-defendants and Larry Householder associates with First Energy.

So, for example, in August of 2018, funds were lower in generation now than the prosecution showed different meetings and text messages that Larry Householder had with CEO Chuck Jones of First Energy.

And then a day later, more money flowing into generation.

Now, they've been trying to connect those dots and show that these different events and conversations all correlate to more money coming to generation.

Now.

And some of the argument at some point in the prosecution is going to be where that money went and how it was used.

There's the allegation that Larry Householder used some of this money for his own personal benefit.

Yeah, the personal benefit part where he did some renovations to his home in Florida, I believe that's going to be coming later.

We've been expecting a witness, maybe, I believe, even the contractor for those home renovations to take the stand for the prosecution.

At this point, what they have been showing is how the money has flowed from first energy to different dark money groups like Partners for Progress to Generation Now and then again to other 501 seat fours and other LLC to do things like campaign for householder supporters in their primaries to pay for attack mail or ads against the people that that were opposing these householder supporters in the primary and in the general election and to pay for radio spots, TV spots.

Again, a lot of ads, political ads, a lot of money going towards supporters of Larry Householder.

Therefore, they can win their primary when their general election and as the prosecution says, go on to vote for a householder as speaker.

And the focus has been on householder this week.

But of course, Matt Borges is also on trial.

Are we hearing about the prosecution's case against him or is that coming later?

So as we're going chronologically, the issue with Borgias, the allegations against Borgias comes up later in 2019.

And at this point, we haven't reached that part yet.

But every now and then sprinkled in, there are conversations with Borgias and other first energy lobbyists talking about such as the creation of House Bill six, the creation of this nuclear power plant bailout bill, and where Borgias and his lobbying firm, where his consulting firm works into all of that.

And you also heard some voices on tape.

It's almost like this whole case was discovered by accident because Larry Householder was not the target initially.

Yeah.

What we've known and what what has become solidifying throughout this prosecution, throughout this trial is that the FBI was already looking into former Columbus lobbyist Neil Clarke, who has since died by suicide.

They were already looking into him through a different, unrelated investigation in 2018.

They were tapping his phones through a through a search warrant that they had that was approved by the judge.

They were tapping his phones and therefore heard these different conversations between Neil Clarke and Larry Householder talking about, among other things, the need for groups that want to get bills passed to put money into the C4, which was code, according to the prosecution from Larry Householder, to put money into generation.

Now.

The defense has not started presenting its case yet, but they tried to make a case this week against the judge himself.

Yeah.

One of Larry householders attorneys stood up and said that he believe there's some type of bias and that maybe this court is not the right court to be holding this.

It's been brought up.

That Judge Timothy Black ran for Ohio Supreme Court in that householder about 20 years ago, supported Judge Black's opponent in that race.

Another issue that came up on Thursday was Larry, householders, attorneys standing up and fighting back against some terminology that the prosecution's been using.

US assistant attorney prosecutor Emily Glatfelter has been using terms like in this bribery or in the scheme, and the defense attorneys said that they believe that that language is uncalled for because Larry Householder is still innocent until proven guilty.

And this comes after the judge also admonished householders, lawyers for things for things he didn't approve of or appreciate in his courtroom.

That's right.

On day one, when when Emily Glatfelter, the U.S. assistant attorney, was giving her opening statements, there were some murmurs, faces clicking of pens from the defense side.

And the judge asked them to stop doing that and actually called them unprofessional for doing that.

Also this week, Ohio AFL-CIO President Tim Burger asked Judge Black to quash a subpoena for him to testify for Householder.

Burger said not only should he not have to take the stand, but that householders attorneys lacked what he called professional courtesy by not explaining to burger the purpose for calling him as a witness.

His motion also revealed the Labor group got $1.4 million from generation now to help in the campaign to stop the attempt to put before voters a repeal of House Bill six.

The motion says the AFL-CIO took the money as long as it could control the content of the advertising against the referendum.

And it would focus on the bill's benefits, such as the 4000 jobs at the nuclear power plants.

And that is it for this week for my colleagues at the Statehouse News Bureau of Ohio Public Radio and Television.

Thanks for watching.

Please check out our Web site at state news dot org and follow us and the show on Facebook and Twitter.

And please join us again next time for the state of Ohio.

Support for the statewide broadcast of the state of Ohio comes from Medical Mutual, providing more than 1.4 million Ohioans.

Peace of mind with a selection of health insurance plans online at med mutual dot com slash Ohio by the law offices of Porter Wright, Morris and Arthur LLP now with eight locations across the country, Porter Wright is a legal partner with a new perspective to the business community.

More at Porter Wright dot com and from the Ohio Education Association representing 124,000 members who work to inspire their students to think creatively and experience the joy of learning online.

At OHEA.org.