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The house gets the call to come back to work early to override fellow Republican Governor Mike DeWine vetoes, while a Senate leader tells us that chamber's plans.

That's this weekend.

The state of Ohio Welcome to the state of Ohio.

I'm Karen Kasler.

The new fiscal year is underway, and the budget is in place to take full effect October 1st.

Except for 67 line item vetoes, the state ended fiscal year 25 with $1.3 billion more than predicted, which was factored into the new budget and not deposited into the rainy day fund.

Democratic former lawmakers Jeffrey Crossman and Mark Diane have filed their promised lawsuit over the state's ownership of unclaimed funds to create a sports and cultural facilities fund, with $600 million earmarked for a grant for the Cleveland Browns Dome stadium in Brook Park.

We'll have more on the budget coming up.

The Republican dominated Ohio ballot bore dealt a blow to backers of a wide ranging antidiscrimination amendment, saying it must be split into two parts.

The Ohio Equal Rights Amendment would protect more than a dozen groups from local and state government discrimination, and would also overturn the amendment banning same sex marriage that voters approved in 2004.

Secretary of state Frank Lareau said splitting the amendment is appropriate.

It seems to me reasonable that there are voters in Ohio that may be supportive of, repealing the marriage amendment.

So to allow, you know, in the Ohio Constitution, in the institution of marriage between any two loving couples that want to be together, but that may not want to support, creating 12 new protected classes under a bunch of different listed circumstances.

the This means backers would have to gather 443,200 valid signatures on each part to make next year's ballot, then argue both issues instead of one.

They haven't decided if they'll go forward or go to court.

Ohio is joining some other states and sending assistance to Texas, where flooding along the Guadalupe River killed dozens of people, including kids and counselors at camp mystic, a private all girl's Christian summer camp.

Ohio State Highway Patrol troopers headed to south central Texas this week to support search, rescue and recovery work following the July 4th flooding.

it makes me incredibly proud to know the caliber of troopers that we have here in Ohio that are willing to put their lives on hold to go help, those that are in need, regardless of the situation.

You know, we've asked them to to step away from their families, child care, things like that.

When we put the request out to our troopers, we had the complete roster filled up within two hours.

And Troopers and K-9 officers were expected to search the river basin, but will be flexible to switch to other duties as needed.

The Ohio House reconvenes Monday, July 21st, to override three of the 67 line item budget vetoes by governor Mike DeWine.

They'll meet in the Senate because of maintenance work on the air conditioning system in the House chamber.

The session will address three of the four property tax related vetoes on provisions allowing county budget commissions to reduce voter approved levies requiring emergency and other levies to be used when calculating the 20 mill floor.

That is, the effective tax rate and limiting districts power to ask for emergency levies.

But the override session will not address the veto of the limit of collected property tax that districts can carry over at 40% of their operating budgets, with the rest refunded to taxpayers.

Republican leaders have described that as immediate property tax relief, but districts have said it would send many into financial chaos and lead to more school levies, which DeWine noted in his veto message.

One vocal supporter of the budget and critic of several of DeWine's vetoes is Senate finance Chair Jerry Serino.

I spoke to him this week.

we do not have a firm date yet.

It's it's a matter of corralling all the members, many of whom are on vacation.

Some people probably out of the country.

So I think the the staff is, is working that issue right now, to looking at, it, other dates that, we, we might need to be coming back to, later in July or possibly even early in August.

But it doesn't look like we're going to be able to do at the same date as the House is planning to.

Do you feel a time crunch or pressure to do this more quickly than you have the whole rest of the session to override these vetoes?

Well, there are some timing issues, the details of which I'm not exactly familiar with, but there are some, school reporting, school financial reporting deadlines.

That would be relevant to when this this would become effective.

On the, real estate, or, excuse me, the property tax reform issue.

So I think that's the, that's the deadline.

On on that particular subject, on other subjects, that were vetoed.

We do, as you point out correctly, we do have lots more time to deal with any other vetoed material that we would like to address.

Subsequently.

Is it fair to say that there are other vetoes that you are concerned about besides the property tax vetoes?

I think there's, I don't know that there's a consensus yet, within the Senate of which those are in which ones are so important that we can't deal with either in other legislation, separate from the budget bill or that they are worthy of an veto override consideration.

We're still working through those issues right now, but the the the property tax reform, I was again, I was very happy with a lot of the things that the governor approved, and did not veto in the budget.

And we appreciate, appreciate that, on his part.

But I think the, the, the property tax reform was one that I think most of us were very disappointed that it got vetoed because it's such a, an important issue to our taxpayers around the state right now.

We have studied the issue quite a bit.

We've already had, study committee, a joint committee between the House and Senate.

They produced a 900 page report.

I think close to 20 or 21 recommendations.

We had hearings in our respective chambers as part of the budget process, and we spent a lot of time, I can tell you, in the conference committee, between representative Chair Stewart and myself and our respective teams talking through all of the, you know, the different scenarios in property tax reform to come up with what we finally included in the bill.

I don't think we need another study committee to study the issue, but it's fair to point out that the 21 recommendations that were put together by this bipartisan joint Commission of lawmakers, none of those have passed yet.

Right.

And and again, it's my point in bringing that up is that that we've studied it.

We've listened to input.

We've had lots of hearings.

Whether or not those particular 21 recommendations made it into the budget bill.

I think we would see some variations and some of their recommendations, certainly.

But, what we had in the budget bill, is what we believe to between the House and the Senate.

What was would be an appropriate, very good start to dealing with the property tax issues.

It's not the final solution.

It is not going to solve all of the problems.

But when it comes to improve transparency and providing, a lot more local control and authorization to deal with tax levies and property tax issues.

I think I think that would have been a great start in that's what we're looking to reestablish, in any, veto override.

The House is coming back to override three of the four property tax related vetoes.

The highest profile one, though, is not on that list.

That's the one that would set a cap for 40% of the districts operating budget that can be carried over in property taxes, with the rest refunded to taxpayers.

Do you think there are the votes to override that cap?

That veto on that cap?

I haven't been doing a very recent vote counting.

But I do think there was a lot of interest.

Obviously, it was part of the budget that the Senate passed.

And, you know, it was the House that came up with that concept in the first place with their 30% cap in their omnibus budget.

We moderated that to 50%, and we ended up settling for 40% in the final budget bill.

Is it is a compromise between the two chambers?

I'm not sure what the rationale is.

It is the house's stated in terms of why they are not planning to pursue that one.

Again, that's one of those things that perhaps that's something that is pursued at a later date.

And, I again, I don't know, the vote counts in the House.

But, obviously there's reasons why they're not bringing that one forward.

School districts have said that that cap would throw them into financial chaos, and many of them into the red in the second year of the budget, even, and forcing them to go to voters for levies.

Governor Mike DeWine mentioned that in his veto message.

Well, I've talked to a school funding expert, Howard Leader, who says there are 370 districts with more than 40% carryover.

They have to start refunding money.

Taxpayers under the bill that was the budget bill was passed.

353 districts were under the 50% last fiscal year.

And auditor Keith Faber has said his financial health indicators for schools says a district is in financial caution if the carryover balance is under 50%.

So is the cap really an idea that you think that can can be maintained or could be and can be supported?

Well, that perhaps is why the House has decided not to address that one.

Now for, in trade for further study and discussion.

You know, the, the whether it's the 30, 40 or 50% cap limit.

You know, there has always been and we made allowances for this in the budget that we passed, for, capital dollars to be set aside, taken outside of that cap calculation, as well as some other provisos that would have given more flexibility even at the 40% level.

But I think, you know, look, we have $10 billion of, of, year over year carryovers in our school systems in the aggregate right now.

That is ridiculous.

That's half of what we pay in property taxes in a given year.

And so in the aggregate, that has to be addressed.

That is way too much to be carrying over.

Yes.

Individual school systems have unique circumstances.

And perhaps that's something that we should look at, you know, as we address this issue in the future.

But, taxpayers who are screaming about tax valuations and property tax bills, have a difficult time in the ones I've talked to with reconciling having $10 billion of, of, carryover sitting in our 611 school systems for the more than 230 districts that are under the 40% carryover.

How does the cap provide property tax relief for them?

Well, it would it the other parts of the bill certainly would trigger an evaluation by the budget commissions, which were giving greater authority to in the bill, to to make those determinations into, decide whether or not any money, money should be rolled back.

And remember too, that the state of Ohio.

Well, we don't levy property taxes.

Not one dime of property taxes.

We actually pay some property taxes for the citizenry.

We pay.

You know, with the rollback.

We pay close to, in the, owner occupied, 2%.

We're actually paying about 12% of everybody's property taxes, through the state.

Okay.

So not only do we not levy taxes, we're actually doing the opposite.

We're paying taxes, which most people do not realize.

But what our biggest goal here with this bill, with this component of the bill, was to provide greater transparency.

So that people know what they're voting on, in, in how their, a tax assessments are being levied, by not just schools but other levies that are in every county right now libraries, senior citizens, Adams board.

There are lots of other things that are levied against some of these property value.

We want to see more local transparency and local authority to make changes because every community is a little different.

And I think empowering the local, the local officials, the budget commission in in a couple of small cases, the county commissioners, the ability to make adjustments as they see fit, they're responsible to the voters on a regular basis.

And if they don't make the right decisions to give some property tax relief when they can and should, they're going to have to answer to the voters.

You I may be saying this, but I you know, I've heard from other lawmakers that property taxes are the complaint they get most common from constituents.

Constituents have been howling for some relief from property tax, rising values and those rising bills in the budget.

The passed you did do a flat income tax, which turns out to be an income tax cut.

That's about $1 billion that the state will spend on that.

Why didn't you choose to use that billion dollars for property tax relief instead of an income tax cut?

You have a lot of people saying income tax cuts are not something they necessarily wanted to see.

Well, we had, our legislature for the last ten years, particularly has been has been whittling down the tax rate in the number of brackets, as you know.

So this shouldn't have come as a surprise to anybody that we were headed in this direction.

I think, by by having a flat tax at the end of the second year or the biennium here of 2.75%, we're going to be joining 14 other states, in a flat tax.

And we will be the best flat tax rate of all of our neighboring, states.

That's important to make.

Make sure that we have a vibrant economy, an attractive economy for people, for businesses to come to Ohio.

The the property tax issue is, we all know, is the, the biggest, the biggest component of what has caused us is inflation.

Inflation caused by Washington spending and borrowing to to an extent that we've never seen before.

Okay.

That is what causes, mortgage rates to go up, which causes, you know, fewer transactions, which means that less of something means that the other things that are out there are worth more, right?

And so that is the those have been the biggest contributing factors.

Those will come and those will go.

But what we're trying to do is provide some means and mechanisms in this bill for, for local governments to make adjustments.

On property tax levies, to make sure that there's not too much carryover that is in excess of what they need to be fiscally viable.

And that's the best way.

The best thing that we can do at the state level, we unfortunately don't have the funds to be able to just pay everybody's property taxes or to go to the other extent.

These people that are gathering signatures right now to eliminate property taxes with no substitute that they're suggesting, we collect about $21 billion a year in property taxes.

Okay.

And as I said before, it's not just the schools.

It's other community organizations that provide services, whether it's fire and safety.

Senior citizens, Adams board, etc.

if they just get rid of the property taxes, all of those things, the support for all of those things goes away.

I think it's very, very irresponsible for them to try to key off of people's being upset with property tax levels, but to go to this extent without having an alternative that is viable, is irresponsible.

The Legislative Service Commission did a study that said that since 2005, and all the tax cuts for the income tax cuts that have happened since then, it's about $72 billion in income taxes that have not gone to income taxes to the state.

Do you think the state has gotten $72 billion worth of economic growth?

Has it been worth it to cut taxes, income taxes that much?

You know, if you look at our GDP growth over the last 10 to 12 years, the GDP growth suggests, you know, I don't think it suggests I think it actually demonstrates that we have grown our our gross domestic product here in the state of Ohio, coincident with those reductions in taxes.

There are other factors that that, that help support a GDP growth.

But clearly it's not hurting our economy.

It's not destroying our economy as some had said.

And we're also able to spend so much money on so many other projects and programs.

You know, almost half of our budget is Medicaid related.

Okay.

We've increased that.

We've increased spending for schools for K through 12 by almost $1 billion in this biennium budget.

We've increased so many other services for those in need, in programs that are worthy of our support without having to sacrifice those, the support, but at the same time, making sure that we are doing the right things for economic development, that are going to make sure that we have a a very vibrant and growing economy in the future.

Because without that, we are not going to be able to sustain supporting all of these other programs that support people in need.

Let's talk about the other side, people who are not in need.

You've got $600 million in this budget that did stand.

It was not vetoed.

That goes to a grant for the Cleveland Browns Dome Stadium in Brook Park.

And as part of the $1.7 billion in this cultural and sports facilities fund that came from unclaimed funds.

Two former two Democratic former lawmakers, Jeffrey Crossman and Mark Dann, say they're suing the state over this, saying the state does not have the authority to take ownership of those unclaimed funds.

How confident are you that the state can survive this lawsuit, that you have the authority to do what the budget does?

Well, look, we've done a lot of legal research.

As we were working on in planning on this project and this approach to financing, not just the Browns project, but other development projects in the future.

Look, I'll tell you what.

And you compare the governor's approach, which was to double taxes on gambling.

We don't like to raise taxes in our caucus.

Certainly, the House plan, which was to borrow through bonding and pay $400 million over 25 years in debt service out of the general fund.

I would add, that was not a viable approach.

So we looked around for another way to do it, in ways that wouldn't be, you know, strict.

That certainly would never jeopardize the state's, status, from a bond rating standpoint, a triple AA, and and we looked and we found all this lazy money.

We have $4.8 billion sitting in unclaimed funds right now.

And keep in mind, Karen, that those funds, by the time they get to the state, they have already resided in banks or insurance companies or credit card companies or any number of places for a number of years, five years, ten years, sometimes, sometimes even longer, where they have sought to try to find the rightful owners, right.

And unsuccessfully.

And then they hand it over to the state.

And we are now going to have a ten year time period before the actual legal term, called a shipment, takes place, when the state actually takes possession.

And keep in mind, too.

Every year we take in between 2 and $300 million more of unclaimed funds.

So that is going to be perpetuated.

And it is not going to put in jeopardy anybody's rightful claim to funding that they're, that they're due, if they do it within the time period that we're, we're talking about here.

We talked a little bit before about, the funding for people in need.

And I gotta ask that there's folks who feel like this is a bad look for the state that there are a lot of people who are struggling with, property taxes and that sort of thing.

But then the state has offered $600 million to billionaires, one of whom just went and bought a $25 million mansion in Florida.

That that.

Do you feel like there's a bad look here, potentially, that you have to defend?

Well, if the look is is is a balanced look, I don't think it's a bad look.

I mean, first of all, we're not giving $600 million to anybody, okay?

We are we are putting to work $600 million that is sitting in unclaimed funds doing nothing.

And we have a schedule that's in the bill with with the, the Haslam Sports Group and their this particular project case where we are going to be paid back with incremental taxes that we are not getting today from both the payroll taxes in the construction phase, as well as with sales taxes.

And, commercial activity taxes.

Through the course of the years, we will get our 600 million back plus interest, over 16 years, according to the plan that we have.

And that money coming in is going to go into the general fund so that we can fund other projects and other support services that are so important to people in need.

So this is really if you if you if the look is very narrow and it's like, well, you gave money here and you're not doing it here, we have to look at it from the standpoint that it's creating an economic environment in an economic output that enables us to do these other things that are so important for those in need.

And finally, the budget overall, you've got advocates for a variety of groups saying it doesn't fully fund the their school funding plan.

It cuts funding to the H2O Ohio Clean Water Program, cuts funding for affordable child care for libraries, among others.

Criticisms you had said on the floor in the Senate when you were introducing the budget, that it clearly displays the Senate's intent to support families, children life, economic growth and the delivery of health care services and education.

You've got people who say that they feel the budget doesn't do that.

They have.

They questioned the truth of that statement.

Well, I believe that statement, and I believe it to be true.

And I think the problem that the Democrats and other critics have of the budget is I would have to use the quote, it's never enough to some of these people.

In some cases, we have not made cuts.

We've reduced the rate of growth.

In the case of libraries, for example, you know, we we, we made a couple of changes.

We're still giving the libraries close to $1 billion every two years.

We have made a change structurally, that it's not automatic as a percentage of revenue, that every two years they've got to, along with everybody else, come to, come to the legislature and make a case for whatever funding appropriation they would like to get.

I don't think that's asking too much, for libraries who have, many of whom I think engaged in mission creep, meaning they're starting to provide lots of services to the communities that are not traditional library functions.

And if the communities want those, that's fine.

The community should pay for those things.

But I think the accusations that that we went light on so many important, services to our citizens, I think it's it's unwarranted.

Serino added that he's pleased with what he's hearing from state university presidents about their compliance with Senate Bill one, the law he sponsored that went into effect last month, banning most mandatory diversity training and faculty strikes.

Among other changes, volunteers led by some faculty members from Youngstown State University, gathered around 195,000 signatures to try to repeal the law, but that is well short of the 248,000 signatures they needed to bring the law to voters and block it from taking effect.

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

Thanks for watching.

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Support for the Statehouse News Bureau comes from Medical Mutual, dedicated to the health and well-being of Ohioans, offering health insurance plans, as well as dental, vision and wellness programs to help people achieve their goals and remain healthy.

More at Med mutual.com.

The law offices of Porter, right, Morris and Arthur LLP.

Porter Wright is dedicated to bringing inspired legal outcomes to the Ohio business community.

More at porterwright.com.

Porter Wright inspired Every day in Ohio Education Association, representing 120,000 educators who are united in their mission to create the excellent public schools.

Every child deserves more at OHEA.org.