Compromise Legislation Still Does Not Meet Union Test

Spend five minutes with Ohio Bureau of Workers’ Compensation (BWC) Administrator Steve Buehrer and you will figure out his main goal right now is to get Ohio’s injured workers back to where they belong—back to work.

When Governor John Kasich was elected, advocates for creating private sector competition for the BWC were optimistic. Ohiohas one of a handful of state government monopoly workers’ compensation programs and its costs have been consistently identified as an anchor around theOhioeconomy.  However, the election loss around the state collective bargaining law has created a casualty in efforts to address this economic anchor—at least in the near term.

Buehrer, a former state legislator and staff member at the BWC, may have more ambitious goals for his billion dollar agency in the future but right now he is focused on getting anyone injured while worked treated medically and put back on a company payroll.  This approach sets a solid metric by which to measure success at the BWC but also focuses on helping the worker be taken care of and getting theOhiobusiness their worker back.

State legislators apparently agree as well.  A trio of Ohio House bills was introduced recently narrowly tailored to getting injured workers treated more quickly and getting them back to work.  Ohio’s health care system for injured workers operates with Managed Care Organizations (MCOs) assisting in identifying medical providers that serve injured workers.  This sounds like traditional managed care, which was the goal, but the reality is far from managed care. This legislation proposed a compromise whereby injured workers relinquish a little flexibility after 45 days to allow MCOs to help them manage their care and, in return, businesses will start paying for health care and medications much earlier in the process, even before they can contest approval of a claim to ensure injured workers get critical medical treatment early.

Nearly 70,000 medical providers are on the MCO lists and this huge list of providers is no accident.  Politics has played a role to ensure that most medical providers (think chiropractors) make the list.  MCOs have their hands tied when it comes to truly managing costs for the BWC.

Even worse, current rules for determining if the BWC should pay for injured workers’ health care costs create delays in medical treatment for employers to determine whether they should fight the claim and whether the BWC should pay it.  Delays in medical treatment are bad for injured workers.

Those two problems are at the heart of the current Statehouse debate.  Organized labor, fresh off the collective bargaining victory, is in no mood to bargain.  They claim the workers comp House Bills are the next wave of Senate Bill 5 fever.  It is unclear whether the Kasich Administration will decide if now is the time to fight on workers’ compensation or other issues that upset organized labor.  However, what is known is that if Ohio does not address cost of doing business issues such as workers’ compensation the economy will truly never compete on a global scale.

Internet café Moratorium a Surprise Addition to HB 386

Much like the shale industry,Ohio’s gaming industry is in a boom mode like few others in the state.  Casinos are preparing to open and construction on Video-Lottery Terminal (think slot machines) facilities is in full bloom atOhio’s struggling horse racing tracks.  The state and local governments acrossOhiocannot wait to get their hands on the new tax revenue the gaming facilities may produce.  The Ohio Department of Taxation estimated casinos could develop $644 M in new tax revenues—the majority of which will be at the local government level.

In preparation for theOhiogaming industry explosion, the Ohio Senate has been following up on the work of the Ohio House and attempting to gain passage of House Bill 386 before escaping on Memorial Day for a long legislative recess.  HB 386 is an omnibus gaming bill that lays out how the gaming industry inOhiowill be regulated and how the tax revenues generated by this highly taxed activity will be spent.

While industry officials and legislators have been ironing out the details for casino’s and race tracks, a surprise appeared in the substitute Senate version of HB 386.  A moratorium was placed on the location of any new Internet cafés otherwise known as sweepstakes parlors.

Internet cafes don’t technically meet the definition of gaming and that is driving Ohio Attorney General Mike Dewine and several state legislators crazy.  Internet cafes are typically small retail businesses that sell phone or other gift cards that customers can use to play games and win prizes on the Internet.  Legislation has been introduced in the House and the Senate that will most likely have the impact of regulating these retail establishments to death.  The Ohio House has held several hearings on this legislation in the State Government Committee and similar legislation was introduced in the Senate in an effort to break the apparent logjam in the House process over the issue.

HB 386 instead of adding new regulations to Internet cafes placed a moratorium on their future growth until new state regulations can be passed.  This tactic is a smart move that will force the Internet café industry and state government leaders to the table to negotiate a regulatory scheme and it most likely shifts some negotiating power to the side of the state.  This industry has been booming—with the Ohio Attorney General estimating over 300 Internet cafes are open now across the state.

Passage of HB 386 is expected this week in the Ohio Senate with House concurrence likely very soon after.

Legislators and Regulators Continue Shaping Important Energy Policy Issues

In both the Statehouse and regulatory agencies, energy is still the hot issue flowing amongOhiopolicy makers.  The General Assembly continues to debate Governor Kasich’s Energy Mid Biennium Review (MBR) bill, a major state funding agency is beginning to question funding the state’s solar industry and electric companies debate how the state should create a competitive market.

Governor Kasich’s Energy MBR bill, Senate Bill 315, is being debated in the Ohio Senate before Chairwoman Senator Shannon Jones Public Utilities Committee.  Governor Kasich has turned the Statehouse on its head by pushing an aggressive reform agenda in a non-operating budget year through a series of broad policy reform/MBR bills.  Energy is just one of those areas and it has both controversial and non-controversial items.  Groups such as the Columbus Chamber of Commerce have come out in support of the Governor’s proposal to cut the state’s income tax but increase the severance tax on larger oil and gas companies.  The mining and aggregate industry has concerns about a proposal to have the Ohio Environmental Protection Agency (Ohio EPA) grant water permits instead of the U.S. Army Corps of Engineers.  At the core of all these issues is the fact that the state is attempting to figure out how to regulate this exploding new industry that has invested billions of dollars inOhioto develop oil and natural gas from shale deposits inEastern Ohio.

The alternative energy industry has been in the news as well.  Loans from the Ohio Air Quality Development Authority (OAQDA) to a number ofOhiosolar companies have come under heat during a recent board meeting.  A member of the OAQDA Board questioned whether loans to a number of solar companies should be called in as these companies were struggling to meet their loan terms.  The solar industry has been under assault by lower cost foreign products, mainly fromChina, in the past year.  In addition, the potential expansion of shale inOhiocould well create a low cost source of natural gas and oil that could drive down the local cost of these two energy sources and make solar further out of reach from a cost standpoint.  Northwest Ohio has built a strong base around theUniversityofToledoandBowling GreenStateUniversityof solar and wind based energy companies.  There survival is very much in doubt with policy makers after the national implosion of Solendra and struggles on the stock market of other alternative energy companies.

Finally, what could be the most important debate in Columbus on energy issues has been going on for weeks in a drab hearing room of the Public Utilities Commission of Ohio (PUCO).  Officials from the PUCO have been holding a length hearing grilling experts from American Electric Power to determine how much theColumbusbased electric company should be permitted to charge competitors for “capacity charges.”  While just one element of aggressive efforts to move Ohio to a completely competitive electric market, this hearing, with a room full of lawyers, may have a large impact on whether Ohio consumers benefit from electric competition or not.

The lawyers are not the only ones gaining from battles between the electric utilities.  The television stations are winning as well.  AEP and First Energy have launched a media war against one another over these regulatory fights.  Television ads produced by these billion dollar energy companies can be found at their competing web sites– www.forelectricsavings.com  and www.fairenergyohio.org .