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Legislative Update: Discernment in Columbus

November 26, 2013
Democratic Newsroom

Discern—to separate (a thing) mentally from another; recognize as separate or different (Webster’s New World Dictionary)

Recently two pieces of legislation were passed by the Ohio House which required the use of “discernment.”  House Bill 5 (which addresses municipal tax issues) and House Bill 144 (which bans the sale of e-cigarettes to minors) provided ample fodder to practice discernment.

It is well-known that Ohio’s municipal tax laws are archaic—reflecting, in the extreme, local control run amok.  Over the years, business owners have wasted precious time and resources to file multiple tax forms to comply with each municipality in which a business may have operated.  Clearly streamlining and increased efficiency were at the heart of this well-intended bill.  All corners supported this component of HB 5.

However, also included in the bill was a concept, opposed by many groups (including the Oho Municipal League) and numerous local governmental officials with whom I spoke representing Ashtabula, Chardon, Conneaut, Geneva, and Jefferson, respectively.  That controversial concept is called Net Operating Loss (NOL) which permits businesses to carry forward losses into succeeding years.  Though the federal and state governments permit a 20-year NOL, 175 municipal entities in Ohio do not allow for any carryover while a few dozen more permit four years of less.  The end result of HB 5 will be yet another financial blow to local governments in the form of lost revenue, estimated by the nonpartisan Legislative Service Commission to be millions of dollars annually.

This, in addition to losing revenue from the tangible personal property tax and the estate tax coupled with cuts to the local government fund will cripple the ability of many municipalities to fund such basic services as police and fire protection at levels we expect—let alone fund infrastructure maintenance and improvements.

Discernment required me to balance tax code streamlining with the reality of funding cuts for local governments.  A compromise amendment which would have permitted each municipality to set its own NOL at 1, 3, or 5 years was also defeated.  I voted against HB 5 (along with a handful of Republicans), as I could not tolerate additional revenue losses to local governments even though I do support a streamlined tax code.  Discernment…

HB 144 provided an additional opportunity to practice discernment.  On its face, sales of e-cigarettes will be banned to minors—a concept accepted on both sides of the aisle. However, I thought it strange that the American Cancer Society, the American Lung Association and the American Heart Association would oppose HB 144.   Further investigation revealed that “below the surface of House Bill 144 is a tobacco-industry-crafted ‘Trojan horse’ designed to ensure that the emerging electronic-cigarette market and other alternative nicotine products remain taxed at a lower rate than traditional cigarettes and stay outside the state’s indoor smoking ban (Columbus Dispatch, July 22, 2013).”  The same article also noted that the bill was brought to a state legislator by “Lorillard Tobacco Co., the nation’s third-largest cigarette manufacturer, which also purchased e-cigarette company Blu in July 2012.”  Once more, using discernment, I cast a “no” vote weighing all components of the proposed legislation.

No one ever said that that the task to represent our District would be easy.  I share the journey of HB 5 and 144 as an illustration of the need for careful discernment when forecasting all of the consequences (both intended and unintended).  Because I care about the consequences of all legislation upon our District, I listen to all points of view to decide a course of action.

To be consistent then, I must discern what policy choices brings the most benefit to our people with the least consequences.  I am, and will remain, diligent in my pursuit of discernment to serve you, the citizens of the 99th District.