Tax and Finance

The two GOP frontrunners for Ohio Governor both endorsed the elimination of Ohio’s state income tax this week.

Vivek Ramaswamy, who first touted the idea at a campaign kickoff event last month, believes that the work done by the state legislature in the past is a good start, but more can be done.

“It’s going to be a combination of growth and cutting unnecessary expenditures,” Ramaswamy said. “It’s not going to be immediate. I haven’t promised that it’s going to be immediate, but what I’ve said is we’re going to bring it down and put us on a path, on a clear, credible, pro-growth path to zero income tax.”

Ohio Republicans have slashed income taxes over the past two decades, taking tax brackets from nine down to two.

Ohio’s Attorney General Dave Yost, who is also running, concurred with Ramaswamy but cautioned about moving too fast.

“Doing it with a chainsaw, one fell swoop without a plan to actually do it smart is going to create chaos and harm among some of our most vulnerable voters,” Yost said. “The difference between bold and reckless is whether you have a plan to do it.” 3/17/2025

The Senate Transportation Committee this week made a round of changes to House Bill 54, the biennial state transportation budget.

The Senate revisions incorporated at least forty alterations, including the removal of the House-added airport improvement fund and the passenger rail compact.

Senators also strengthened a provision regarding proof of citizenship when registering to vote at an Ohio Bureau of Motor Vehicles deputy registrar.

The OMA will continue to monitor the legislation that also governs the shipments of freight by rail and common carrier. 3/12/2025

The National Association of Manufacturers (NAM) this week weighed in on the Trump administration’s tariff proposals ahead of the State of the Union.

In a statement on Tuesday, NAM President Jay Timmons outlined the negative impact tariffs would have on the U.S. manufacturing sector and outlined key actions the administration should take to bolster the industry.

“The stakes couldn’t be higher for manufacturers right now,” Timmons said. “Many manufacturers are operating on thin margins, and the tariffs imposed today will further strain their resources.” 3/4/2025

This week, State Senator George Lang introduced a resolution to the Ohio Senate urging Congress to make the Trump administration’s 2017 Tax Cuts and Jobs Act permanent.

In 2017, the Tax Cuts and Jobs Act changed the tiered corporate tax rate to a flat 21%. The act also changed the income level of individual tax brackets, lowered tax rates, and increasing the standard deductions and family tax credits.

Many of these cuts are scheduled to expire in 2025 while the majority of business tax cuts expire in 2028.

OMA President Ryan Augsburger co-authored an op-ed for the Columbus Dispatch with NAM President Jay Timmons supporting these tax cuts and urging Congress to renew these reforms. 2/20/2025

This week, the OMA held its first Tax & Finance Committee of 2025, featuring:

• A deep dive on the upcoming state operating budget and anticipated tax cut proposals
• Discussion with Ohio House Ways and Means Committee Chair Bill Roemer
• A presentation by OMA Connections Partner RSM on the impacts of the Trump administration’s tariff policies and what that means for Ohio manufacturers

2/20/2025

The OMA will hold the first Tax and Finance Committee meeting of 2025 on Thurs. Feb. 20, featuring a deep dive on the upcoming state operating budget and anticipated tax cut proposals, along with a discussion with Ohio House Ways and Means Committee Chair Bill Roemer.

OMA Connections Partner RSM will also present on the impacts of the Trump administration’s tariff policies and what that means for Ohio manufacturers. 2/13/2025

A recent Gongwer report highlighted ODJFS’ proposal to impose a new fee on businesses to fund what the agency notes as a long-overdue upgrade of the state’s unemployment benefits IT system.

While business groups acknowledge the need for modernization, they also emphasize the importance of addressing the long-standing solvency issues of the Unemployment Trust Fund. The OMA will analyze and discuss this proposal at the Feb. 20 Tax and Finance Committee meeting. 2/7/2025

This week, Ohio Governor Mike DeWine unveiled the initial details of his two-year state budget proposal.

Highlights include:

• A new $1,000 per child (6 and under) tax credit, funded by a $1.50 per pack increase in tobacco taxes.
• Increasing subsidized childcare.
• Expanded school-based healthcare.
• $100 million to increase housing in rural areas.
• $8 million to assist local governments with cybersecurity.
• Increasing the sports gaming tax to 40% (current tax rate is 20%) to fund a new fund for supporting major and minor league sports stadiums and to reduce high school sports/activity fees for students.

The Ohio House began hearings on their version of the budget this week, which will continue until mid-to-late April, after which the Senate will make their own amendments before conferencing on an agreed budget and sending it to DeWine for signature and line-item vetoes.

OMA staff are still analyzing the proposed budget and will have deeper analysis on OMA priorities coming soon.

Be sure to register for the OMA’s Feb. 20th Tax & Finance Committee for an in-depth breakdown on the state budget process and key OMA priorities. 2/5/2025

Earlier this week, defense contractor and manufacturer Anduril received approval from the state for $452 million in tax credits for the next 30 years.

In exchange for the credit, the California-based autonomous weapons developer is required to maintain operations on-site for 33 years and bring more than 4,000 new production and services jobs by 2035.

Anduril announced two weeks ago plans to spend about $900 million on their new “Arsenal-1” complex south of Rickenbacker International Airport to build drones, missiles, and other high-tech unpiloted military weapons. When completed, estimated in 2035, the complex would employ 4,008 workers with an average hourly wage of $63.61, making the average annual pay $132,000. 1/28/2024

Reacting to a plan by the Cleveland Browns to construct a new domed stadium outside of Cleveland proper, Ohio Attorney General Dave Yost joined with attorneys for the City of Cleveland in a game of smash mouth lawsuits.

If the sports club is allowed to relocate, Ohioans could be on the hook to pay for the new stadium using taxpayer dollars. We reported recently, the Browns are lobbying for state funds in the soon-to-be-introduced state budget. 1/14/2024

Kimberly Murnieks, Director of the Office of Budget and Management told reporters this week that the state is in a strong financial position heading into the 2025/26 budget year.

Murnieks, who was appointed by Governor DeWine in 2019, touted a healthy bottom line for the state, in addition to a strong “rainy-day fund” of over $3.8 billion, which can be used for uncertainties like natural disasters. 1/14/2024

Just weeks before the state budget bill is set to be introduced at the Statehouse, Ohio’s new Senate President tempered the notion that taxpayers would subsidize a significant share of construction costs to build a possible new stadium in Brook Park, outside of Cleveland.

According to Cleveland.com, Senate President Rob McColley said he opposes “handouts” such as the proposal lobbyists for the 3-14 Browns organization are attempting to advance looking for a reported $600 million in state share toward the total $2.4 billion price tag to develop the new site. Stay tuned. 1/6/2024

This week, House Bill 203, also called the “Prompt Pay Act”, failed to clear the Senate prior to the closing bell of the General Assembly. Garnering strong support from labor, the bill enjoyed a strong last-minute push at the end of the post-election session. The OMA’s coalition-building efforts with members of the business community and advocacy in the general assembly were instrumental in deterring its passage.

The bill aimed to set the payment terms in construction contracts and eliminate the owner’s right to negotiate by requiring all contracts be paid within 30 days while enforcing an 18% penalty fee and providing attorneys fees for contractors at the owner’s expense. 12/18/2024

The OMA led a coalition of business groups to oppose House Bill 203, the prompt pay act. The labor-supported bill would set the payment terms in construction contracts and eliminate the owner’s right to negotiate by requiring all contracts be paid within 30 days. HB 203 would impose an 18% rate on payments not made within the state-mandated “prompt pay” period.

With just a few weeks remaining in the general assembly, the OMA will continue its efforts to oppose the bill and prevent its passage. 12/10/2024

In the final weeks of the legislative session, Ohio lawmakers are debating a proposal to increase annual pay raises for elected officials from 1.75% to 5% over the next four years.

After that, raises would align with inflation or be capped at 3% annually. While legislators like Rep. Bill Seitz (R-Cincinnati) argue that the increase addresses inflation’s impact, critics question the timing and effectiveness of lawmakers in addressing broader issues such as housing and utility costs. Discussions are ongoing, with no bill introduced yet. 12/10/2024

Ohioans are paying more for auto insurance rates, with the 10 largest auto insurers in the state raising their rates an average of 19.3 percent in 2023.

The industry is blaming the increase on more accidents and more severe accidents since the pandemic, as well as rising medical costs, an increase in stolen cars, more distracted driving, and higher legal costs, according to the Columbus Dispatch. 11/27/2024

This week, the Ohio Senate’s Ways & Means Committee began hearings on Senate Bill 216, a proposal to phase out state income tax on nonbusiness income over six years and repeal the Commercial Activity Tax (CAT) by 2030.

The bill’s sponsor, Sen. Steve Huffman, acknowledged the state would need to replace approximately $8 billion in annual revenue, potentially through spending reductions or revised sales tax policies, while protecting essential items like food and rent from sales tax. Advocates argue the measure will spur economic growth and attract residents to Ohio, but critics, like Sen. Kent Smith, raised concerns about impacts on property taxes and overall revenue sustainability. 11/20/2024

President-elect Donald Trump campaigned heavily on bringing back U.S. manufacturing, extend the Tax Cuts and Jobs Act, curtail federal funding for clean energy, and use tariffs to boost the manufacturing sector.

UtilityDive recently broke down the top four issues to keep an eye on as Trump rolls out his presidential transition plan. 11/14/2024

Markets rallied dramatically Wednesday following Donald Trump’s victory in the 2024 presidential election.

The Dow Jones Industrial Average surged 1,434 points to a record high, or around 3.4%. The S&P 500 also hit an all-time high, popping 2.3%, with the Nasdaq Composite climbing 2.6% to a record of its own.

The dollar also had its highest jump since 2020, most likely a reaction to Trump’s proposals around tariffs, international trade, and taxation. 11/6/2024

The IRS has released the final regulations regarding qualifications and stipulations for the Section 45X advanced manufacturing production tax credit.

The regulations include allowing qualified parts to be made from recycled materials, clarification on certain material and extraction cost qualifications, and inclusion of domestic solar wafer production.

These final regulations take effect Dec. 27, 2024 10/30/2024