Public Policy Advocates

The Ohio Supreme Court issued a ruling on Monday regarding the Governor’s plan to install Video Lottery Terminals (VLTs) at Ohio’s seven racetracks. The court ruled 6-1 that the enabling legislation from House Bill 1, and the Governor’s Executive Order, are subject to a referendum by the people. The lawsuit was filed by a ballot issue group called LetOhioVote.org.

LetOhioVote.org now has 90 days in which to submit at least 241,366 valid signatures, from at least 44 of the state’s 88 counties. If they are able to get these signatures, the issue will be placed on the November 2, 2010 ballot.

Governor Strickland said in a statement that he was “disappointed” in the court’s decision. However, Mr. Strickland did not reveal whether he would direct the Lottery Commission to move forward with the slots program in the meantime until this issue is put before the voters.

Good afternoon:
 
Conference Committee on HB 1 announced it will meet tomorrow at 4:15PM in Statehouse Rm. 313.
 
Thank you.

Today Senate Republicans unveiled a joint resolution, which proposes Ohio Lottery-operated slots at seven locations around the state but does not specify horse racetracks. If eventually placed on the ballot and approved by voters, the proposal calls for the operations to be licensed to the highest bidders. The resolution will be officially introduced this afternoon.
 
Senate President, Bill Harris (R-Ashland) sent a letter to the Governor to urge him to support the Senate’s proposal. In his letter he stated that the Governor’s proposal did not include funding from the video lottery terminals until May 2010, so Sen. Harris believes that there is ample time for voters to decide the issue on November 3rd.
 
We will keep you posted as additional information is made available.

Thank you.

Political tensions grew to an all time high yesterday with the Governor accusing the Senate republicans of game-playing and using the budget for political advantage. During the House Finance and Appropriations hearing, democrat members continued to accuse the Senate republicans for delaying the budget process by not accepting the Governor’s video lottery terminal (VLT) proposal. Meanwhile, the Senate Select Committee on VLT continued its hearings on the Governor’s proposal, and have identified major areas of concerns.   There is a “clawback” provision that would return the $65 million license fee paid by each racetrack owner ($455 million of the estimated $933 million the proposal is to generate for the state) if a competing casino issue that will be on the ballot in November passes.  The Governor stated he does not support the “clawback” provision, but it is included in the draft legislation the Senate was asked to approve. Sen. Husted, a member of the Senate panel, responded, “If that’s not the plan, what is the plan?” The Committee is scheduled to meet again today at 10:00AM to review constitutional issues.
 
Yesterday, the Senate passed HB 245, which is another one-week interim budget. The bill provides 70% funding for the state to continue to operate from July 7th-July 14th. This will provide another week for Ohio’s leaders to finalize the budget. Sen. Harris and Speaker Budish are scheduled to meet this afternoon to try to work through some of the issues. There is speculation that government could shut down if a deal is not agreed to this week. The Governor has stated his concerns about a third interim budget and the federal funding the state loses everyday. Without a full operating budget, a part of government would have to shut down.

The Ohio Senate begins hearings today on the Governor’s video lottery terminals (VLT’s) proposal today. The Governor’s VLT proposal is estimated to raise $933 million in revenues to help fill the current $3.4 billion deficit.  Sen. Mark Wagoner (R-Toledo) will chair the Select Committee on Video Lottery Terminals. The panel also includes Sen. Jon Husted (R-Kettering), Sen. Timothy Grendell (R- Chesterland), Senator Capri Cafaro (D-Hubbard) and Sen. Dale Miller (D-Cleveland).  The hearings are intended to help Senators better understand the specifics of gambling proposal the Governor has proposed. The Lottery Commission Executive Director, Michael Dolan, the Office of Budget and Management Director, Pari Sabety and other interested parties have been invited to testify. The Committee is scheduled to meet at 10:00AM on Friday, Saturday and Sunday if needed.
 
In response to the Senate’s plans, the Ohio House Finance and Appropriations Committee is holding hearings beginning today at 3:00PM to provide interested parties the opportunity to testify on the “impact of potential Senate budget decisions.”  The hearings are also scheduled for Monday at 10:00AM and Tuesday at 2:00PM. The House hopes these hearings will put pressure on the Senate to adopt the Governor’s gaming proposal.

The Ohio Senate announced plans this morning to pass a seven-day budget extension.  With negotiations on House Bill 1 in a stalemate over expanding gambling to include slot machines at Ohio’s seven race tracks, lawmakers have determined that a compromise can not be reached by the June 30 deadline.  In order to prevent a government shutdown on July 1, the Senate has added an amendment to the Industrial Commission budget (HB 16) which would give the legislature an extra seven days to finalize the biennium budget.  The amendment will appropriate funding for government programs and services at 70% of FY 2009 levels. 
 
If enacted, this will be the first time in nearly 20 years that the Ohio Legislature has failed to produce a budget by the June 30 deadline.  In 1991, the General Assembly used a 30-day budget extension to determine how to deal with a $100 million revenue shortfall in a $27 billion budget.  The issue currently facing the Legislature is a $3.2 billion revenue shortfall out of a total $54 billion budget.

Conference Committee on HB 1 (Sykes) is scheduled to meet on Monday, June 29th at 7:00PM in Statehouse Room 313.  After delaying and then finally canceling the weekend meetings, the Governor and Senate President Harris both released statements explaining the reason for the breakdown in negotiations.

Late Saturday, Senate President Bill Harris (R-Ashland) issued a statement, saying that the issue that stands in the way of a budget agreement is the governor’s asking the General Assembly to authorize VLTs at racetracks. “I have acknowledged many times that the governor has the authority to expand the lottery. He has done it before and should he decide to exercise his authority again in allowing VLTs at racetracks . the Senate will account for the revenues . However I cannot get past the fact that the voters of Ohio - our constituents have spoken on expanded gambling time and again. Asking the General Assembly to circumvent their will in such a short time frame when there has been no formal public debate and there are so many questions left unanswered is unreasonable.”

Lat Sunday, the Governor issued the following statement, “There are now only two days remaining until the legislature must send me a balanced budget.  Senate Republicans refuse to support my balanced budget framework that invests in our schools while avoiding a tax increase on Ohio families and businesses.  We have heard the objections, but unfortunately still no solutions.  I believe that the Senate Majority understands the gravity of the situation before them. I continue to wait for them to say what taxes they would increase or what services they would further reduce to address the budget gap.”

Deborah DeLisle, the Director of the Department of Education, testified before the Senate Finance Committee today.  (The Director’s written testimony can be found here.)  She spoke at length about the Governor’s proposed school funding reforms, as well as new proposals in regards to curriculum, wellness and other areas.  Afterwards, the Senators asked questions, mostly in regards to the new school funding system and how it would work going forward.  Many had concerns about the change from 180 school days to 200 days, and the elimination of calamity days in order to begin the process of lengthening the school year immediately. 
 
Senator Mark Wagoner focused his questioning on how much of the state’s aid would come out of GRF, and how much would come from Federal Stimulus dollars.  His concern was that in the next biennium, when the Federal Stimulus dollars are gone, there would be a structural deficit in state aid to schools.  Following this line of questioning, the Director provided GRF data and Federal Stimulus contributions that determined that state aid from GRF is $7.168 billion in FY 2009,  $6.418 billion in FY 2010, and $6.432 billion in FY 2011. The Senator then reiterated his concern that this would create a massive structural deficit for schools beginning in FY 2012.