Dangerous precedent with respect to the State’s use of Ohio employers’ money has just been set with the passing of House Bill 49, the state’s Biannual Appropriation Bill. Specifically, House Bill 49 contains a provision authorizing the Office of Budget and Management (OBM) to “raid” BWC and Industrial Commission budgets, transferring up to two percent of those budgets to the General Revenue Fund. This is despite the fact that the BWC and Industrial Commission budgets are funded entirely by employers’ premiums and assessments, not state taxes. On June 30, 2017, despite virtually unanimous opposition to the proposed change amongst employers and business groups in Ohio, House Bill 49 passed with this budget change intact.

In the short term, this measure essentially forces Ohio employers to subsidize, at least in part, any and all state operations through their BWC premiums rather than state taxes. In the long term, this change creates a dangerous precedent in authorizing the raiding of funds collected for one specific purpose to be used to cover budget shortfalls elsewhere, completely unrelated to that intended purpose. It makes future premium rebates less likely and creates an additional burden on Ohio’s “State Fund” employers. In addition, this change presents an issue of constitutionality – Ohio’s Constitution reserves these BWC and Industrial Commission funds for the treatment of injured workers and the promotion of safer workplaces.

Employers and business groups will continue to oppose this measure, possibly through litigation. Frantz Ward will follow this issue closely.