5/30/06 Legislature Passes TEL Bill
On May 23, the Ohio General Assembly passed a Tax Expenditure Limitation (TEL) statute (SB 321) as well as legislation that permits the co-chairs of the committee sponsoring the TEL constitutional amendment to remove the proposal from the November ballot (HB 312).
SB 321 imposes a “modified” TEL on the state's General Revenue Fund (GRF). The spending cap in the new TEL legislation still restricts state GRF growth to either 3.5% more than the previous year's budget or the combined rate of inflation plus population growth, whichever is greater.
In addition to the TEL language, the bill includes other appropriations of state money. Appropriation bills do not have the 90-day waiting period established for other legislation – they become law at the Governor's signing. The Governor has not signed this bill as of May 30, but is expected to soon. Although the bill will become law immediately, the TEL language is not imposed on the current biennium budget.
The new TEL legislation does not directly limit local government and library funding or spending. However, there are a number of cautionary notes to consider with this new legislation. The State Library and OPLIN budgets will be subject to the new TEL limits. This could lead the General Assembly to consider, once again, funding OPLIN through the LLGSF. This would remove that expense from the GRF budget ceiling. It is likely that other mandates could be shifted from the GRF to local governments as well.
The OLC will review the actual language of the new TEL legislation to evaluate its potential direct or indirect effects on Ohio public libraries and local governments.
HB 312 allows the TEL committee co-chairs to withdraw the Constitutional Amendment from the November 2006 ballot. This legislation requires a 90-day waiting period before it becomes law. By law the notice to withdraw the amendment must be received by the Secretary of State no less than 75 days prior to the election. Governor Taft signed this bill almost immediately after it passed the General Assembly because the 90-day waiting period made the effective date of the law 77 days from the election – only a two day window for the required notice. The Governor refused to sign the bill until the letter from the committee co-chairs had been signed and sent to the Secretary of State, therefore insuring that there will be no change in the commitment to withdraw the amendment from the ballot.
Libraries can "stand down" on the TEL issue at this point but the OLC urges libraries to keep all information and research related to the TEL close at hand in preparation for future issues that may arise.
