Key legislators at the forward-looking budget panel for Thursday's Impact Ohio conference said they foresee greater partnerships with local governments in the near future, but House Finance Chairman Rep. Scott Ryan (R-Newark) said, for him, that does not mean restoration of the Local Government Fund (LGF).

"I do not support any more money going to the Local Government Fund, period," he said. "And that's because of the distribution model."

Ryan said state assistance to local governments, whatever the form, needs to be based on the actual work and services they provide, citing the formula proposed in his recent road-funding measure, HB415, which passed the House and is awaiting a hearing in the Senate Finance Committee.

Sen. Matt Dolan (R-Chagrin Falls), member of the Senate Finance Committee and a former House finance chairman, said it should evoke "a huge sigh of relief" from local governments that the incoming administration and Thursday's four panelists all expressed a desire for better relationships. But he said the state needs to make "strategic" moves in that regard, rather than send "a blank check."

He said that can mean the state's lifting mandates it puts on counties or assuming some of their responsibilities, like indigent defense or running jails.

Sen. Vernon Sykes (D-Akron), like Dolan a current Senate Finance member and former House finance chairman, said the state needs to approach relationships with local governments systematically. He noted the state used to convene a local government commission, presided over by the lieutenant governor, for those purposes. "Since we broke that bond, we have gotten further and further away," he said.

Success Group lobbyist McKenzie Davis, moderating the panel, kicked off discussions by noting the strong state of state finances and the national economy, but also the prospect of a national slowdown in the future.

Rep. Brigid Kelly (D-Cincinnati), a member of the House Finance Committee, urged a change from "business as usual" from the past few budgets, saying past tax cuts had created the shortfall that emerged in the previous budget cycle. And she expressed hope that the budget would be used less to push policy decisions than in the past, saying that occurred recently because of a lack of communication between lawmakers and the administration.

Sykes said he hoped the incoming administration would consider changes to education like those being studied by Reps. Bob Cupp (R-Lima) and John Patterson (D-Jefferson), and more investments in early childhood education and public transportation, for example. He also noted the scope of underspending of Temporary Assistance for Needy Families (TANF) funding, noting how many people are in need of that assistance.

Sykes also urged an examination of tax expenditures, saying the state loses billions of dollars based on policies that aren't working.

Dolan urged caution in assessing the strength of the budget, noting that eight months out from the start of the current biennium, the scope of the looming shortfall was only beginning to become evident.

He also said policies outlined by Gov.-elect Mike DeWine during his campaign will come with a price tag, noting for example his promise of a mental health professional in every school. "While we're going to finish in the black, it's likely that we're going to get a budget from the administration that is immediately going to put a strain on the existing revenues that are in place," he said.

Turning to Medicaid, panelists indicated Medicaid expansion was likely safe in the upcoming administration, albeit with changes. Ryan said he'd prefer to discuss the ways to help people move off the expansion, noting the House's action to fund short-term work certificates to help people get better jobs.

Dolan said he expected an improved relationship with the Trump administration going forward, meaning greater likelihood that the federal government will grant waivers that allow more effective and efficient administration of the program, notwithstanding the political tension around work requirement waivers.

Kelly said House Democrats are committed to fighting for Medicaid expansion, and pointed out that most people who benefit from the expansion already are working.

On the topic of transportation, Dolan said lawmakers need to take a hard look at all sources of road funding, given the state of gas tax revenues and how transportation innovation could diminish personal car ownership.

Sykes said it's time to consider whether to raise the gas tax, given how long it's been since the last increased.

Davis also asked about public transit funding, asking specifically about lost revenue to county transit authorities from the phase out of the Medicaid managed care organization sales tax.

Dolan said it's time to move on from the sales tax discussion and focus more broadly on communicating the message that public transit is important to the economy, health care access and other areas of life. He also said the state needs to ensure local transit authorities understand the changing economy, noting the idea of funneling people from the suburbs to the city in the morning and back again in the evening is outdated in an age where jobs are more dispersed.

Sykes said improving the state of rural public transit and showing the benefits it can bring should create broader support generally among lawmakers for transit everywhere.

Davis closed the panel by asking for one-word answers to a series of questions, such as their willingness to include new revenue in the transportation and operating budget. Sykes, Dolan and Kelly responded affirmatively, while Ryan said that was a difficult conversation in his caucus.