Ohio House approves ‘unfunded mandate’ pension boost for police, firefighters

On the other hand, it’s a celebrated victory for police and fire unions who have been advocating additional pension security following a series of cost-cutting measures in the past decade or so shouldered by the pension’s more-than 50,000 members.

H.B. 296 now heads to the Ohio Senate, which is set to further consider the measure. However, Senate President Matt Huffman, R-Lima, told reporters Wednesday that it would be “extraordinarily difficult” to get done before the legislative term ends, and all unfinished business expires, at the end of this year.

Today, local governments contribute amounts equal to 24% of the pay of their firefighters and 19.5% of the pay of their police force. If H.B. 296 goes into effect, it would raise local governments’ contributions for police to 24%, matching that of firefighters and theoretically increasing the pension’s solvency.

It would be the first time Ohio has raised employer contributions to the fund since 1986.

The bill was ultimately passed on the back of Democratic support. Republicans, despite having a supermajority, couldn’t muster enough votes in favor of the bill to pass it on their own, giving Democrats a relatively rare power over a bill that many in the caucus had reservations with. In the end, 42 Republicans voted in favor and 19 voted against while 22 Democrats voted in favor and six voted against.

Shortly after the vote, the Ohio Mayors Alliance released a statement reiterating the bipartisan organization’s concerns with the fiscal implications of the bill.

“Unless local governments raise taxes, and absent any state support to offset this significant unfunded mandate, communities across Ohio will have $81.9 million less each year to hire more police officers, increase wages for first responders, and support the current public safety needs of our cities,” the statement read.

Locally, Dayton Mayor Jeffrey Mims told this outlet that it would cost the city at least $2.6 million a year to uphold their end of the mandate. Mims said the city would have to look at cuts elsewhere in the budget in order to afford the obligation unless the state pitched in.

Democrats tried to strike a balance between pension members and local governments by offering amendments to both partially restore Ohio’s local government fund — a pot of funds distributed to cities and townships based on need — to prior levels, and a proposal to have the state kick in half of the increase local governments expect to face.

Toledo-area Rep. Josh Williams, R-Sylvania, proposed an amendment to take 15% of state revenue from recreational marijuana sales to temporarily help local governments fund the increase.

Rep. Bill Seitz, R-Cincinnati, argued vehemently against the amendments on the House floor. He warned that the state ought not to get into the business of partially funding public pensions and that, by approving any of the amendments to help local governments in connection to the Ohio Police and Fire Pension fund, the state would set a precedent that would eventually lead to other pensions turning to the legislature for financial support.

All three amendments were turned down, though Williams’ garnered the most support, including from the bill’s secondary sponsor Rep. Thomas Hall, R-Madison Twp., a firefighter in Butler County.

Earlier in its legislative journey, H.B. 296′s proposed phase-in period was expanded from four years to six, giving local governments added time to sort out their budgets and making the bill easier to support for some lawmakers like Montgomery County state Rep. Tom Young, R-Washington Twp., who helped vet and amend the bill in committee.

Other House Republicans weren’t so soothed. Rep. Brian Stewart, R-Ashville, posted on social media shortly after the vote showing that the bill will eventually cumulatively cost local governments more than $80 million per year.

“Here’s the unfunded mandates the House just voted to pass onto every city, village, and township that has a police force in the State of Ohio. Once again — passed with Democrat votes after it couldn’t muster 50 Republican votes,” Stewart wrote. “When these local governments push new levies to raise your income & property taxes in the years ahead, this will be why. I voted no.”

If H.B. 296 does manage to make it into law, pension members’ own contribution rate would raise slightly from 12.25% of their pay to 12.5% beginning in 2030.

David Graham, communications director for the Ohio Police and Fire Pension fund, told the Dayton Daily News that the fund could pay off all its liabilities within 29.8 years, but he said that figure inched closer to the state’s maximum 30-year limit over the past year. In 2023, the fund could pay off its liabilities within 26.7 years.

Members of the pension become eligible for standard retirement once they hit 25 years of service and are at least 48 years of age, though the retirement age for younger pension members was raised to 52 years old. Pension members at a maximum can receive pension payments equaling of 72% of their average annual salary.

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Avery Kreemer can be reached at 614-981-1422, on X, via email, or you can drop him a comment/tip with the survey below.