Kasich Administration Kick-Offs State Capital Budget Bill Process

The kick-off is a well-established football tradition most Ohioans are aware of. For serious students of state of Ohio government, the kick-off for the state of Ohio capital budget bill starts with a standard guidance memo from the Director of the Ohio Office of Budget and Management. On September 25, 2017 Governor Kasich’s OBM Director Tim Keen released the FY 2019-20 state of Ohio capital budget guidance memo to state agencies and other organizations that may be eligible for state of Ohio capital funding in the upcoming capital bill.

Keen’s state of Ohio capital budget guidance memo is anything but exciting. It is a highly technical document closer to a legal analysis of what and how capital budget items for the state of Ohio should be submitted. Though boring, the OBM capital budget guidance memo has some very important information in it for those planning to seek capital budget requests. The guidance memo again defines “capital” items to include the “cost of acquiring, constructing, reconstructing, rehabilitating, remodeling, renovating, enlarging, improving, and/or equipping facilities.”

In addition, the memo outlines what projects are eligible for capital budget funding either from a state agency or a community project. State capital appropriations are funded primarily through the issuance of State bonds. Capital budget projects funded through State bonds must (1) fall within the authorized purposes for State bonded debt set forth in Article VIII of the Ohio Constitution and (2) meet federal tax law requirements for tax exempt bonds. To be eligible for bond funding in the State capital budget, a project must fall within the capital purposes authorized by the voters as set forth in the Ohio Constitution such as: highways; local government infrastructure; parks and recreation; natural resources and conservation; higher education facilities; elementary and second public school facilities; facilities to house branches and agencies of State government and their functions, including State office buildings and facilities; correction and juvenile detention facilities, mental health and development disabilities facilities; cultural, historical and sports facilities; and research and development (including coal research and development) and site development. Also, the Ohio Revised Code and federal tax law also contain provisions that govern the allowable uses of bond proceeds for capital projects, including the types of projects and expenditures, and the extent to which non-governmental entities (both private for-profit and not-for-profit) can benefit from the project.

Finally and most importantly for local communities, the Keen FY 2019-20 state capital budget guidance memo acknowledged that the upcoming capital budget will contain the popular community projects that funds arts, sports, economic development, historical, parks, health care and other priority community projects. The release of the Keen FY 2019-20 guidance memo in late September indicates planning and lobbying should begin right away for those seeking state of Ohio capital budget funding. It is anticipated Governor Kasich will rely on local business organizations to make recommendations for capital budget community project funding but members of the Ohio House of Representatives and Ohio Senate will have their own application project. The Keen FY 2019-20 guidance memo does not outline how large the capital budget bill will be and it is likely to start small in the eyes of Ohio’s Governor and grow larger as members of the Ohio General Assembly get more engaged in the process.

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