Kasich vetoes 3 line items in bill sponsored by local lawmakers

Ohio Sen. Bill Coley, R-Liberty Twp., believes the line items Ohio Gov. John Kasich vetoed in his Senate Bill 235 could be added to the budget bill. MICHAEL D. PITMAN/FILE PHOTO
Ohio Sen. Bill Coley, R-Liberty Twp., believes the line items Ohio Gov. John Kasich vetoed in his Senate Bill 235 could be added to the budget bill. MICHAEL D. PITMAN/FILE PHOTO

Ohio Gov. John Kasich vetoed this week portions of an Ohio Senate bill, one of which he said could have cost the state upwards of $264 million.

But some lawmakers disagree with that assessment, including the bill’s joint sponsors, State Sen. Bill Coley, R-Liberty Twp., and State Sen. Bill Beagle, R-Tipp City.

The governor vetoed what appeared to have been a tax break for the oil and gas industry in Senate Bill 235, saying how it was written would cost the state upwards of $264 million. The provision would have made the sales tax exemptions retroactive to 2010.

In his veto message, Kasich wrote the state, counties and transit authorities would not only have to forego sales tax revenues since 2010 that has yet to be paid, but refund sales taxes paid since 2010.

“It is unlikely the General Assembly intended for this item to yield such a significant loss of tax revenue … to provide even more favorable tax treatment for an industry that is already comparatively lightly taxed,” he wrote.

But Coley called the veto “strange because it’s existing law.”

“It’s how it’s interpreted and it was meant to clarify what’s already done under existing law,” he said. “It was being done out of an abundance caution that some overly eager bureaucrat might have interrupted something differently than what the General Assembly meant.”

Coley believes Kasich may have “gotten some bad information from his staff” because the interruption of the line item was “at best erroneous.”

Senate Bill 235 was initially introduced to help developers with real estate, but the Ohio House, Coley said, "chose to expand the issue of development" by adding several additional issues, such as several tax-related measures like the discontinuation of the "catalytic project" historic rehabilitation tax credit program after fiscal year 2017 and raising for two years the taxable wage base used for the payment of unemployment contributions.

“It was always meant to be a bill to encourage development,” Coley said.

He said plywood signs staked into the grounds of empty fields promoting what could happen will be transformed into actual projects.

“Instead of investing in plywood they can actually invest int he building,” he said. “You look at some of those older buildings (in Middletown and Hamilton) that can be developed, a developer can invest and not worry about someone raising taxes before he would sell.”

Kasich also vetoed two other line items — one of which was related to grant dollars for major sports events being carried over to the next fiscal year if unused. The bill capped the grants at $500,000 for any single grant, and $1 million for a fiscal year. Kasich said this provision would create a perpetual cycle he didn’t want to see in state law.

But Coley also called this a strange veto because “we do it all the time when projects can’t be released within the allotted time.”

The last veto was a House-added measure regarding tax exemptions on digital products, with Kasich writing “there is no justification for granting a narrow subset of this industry — digital jukeboxes — a tax exemption.”

The bill called for exempting sales tax “from the sale of music from a jukebox, arcade machine, or similar amusement or entertainment device.”

Coley said this appears to have been another clarification to the law as technology shifts and evolves, but apparently “the administration had some questions on the wording on that one.”

Coley said it’s likely these line item vetoes will be suggested to be included into the 2017-2018 biennium budget bill to be discussed in the 132 General Assembly early in the new year.