TESTIMONY before the OHIO SENATE SENATE FINANCE GENERAL GOVERNMENT SUBCOMMITTEE HONORABLE SENATOR KRIS JORDAN, CHAIRPERSON

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1 The Ohio State Board Cosmetology To protect and support the public through regulation and education, while promoting the integrity of the industry Gateway Circle Grove City, Ohio Phone: (614) Fax: (614) Thomas Taneff, J.D. Chairperson TESTIMONY before the OHIO SENATE SENATE FINANCE GENERAL GOVERNMENT SUBCOMMITTEE HONORABLE SENATOR KRIS JORDAN, CHAIRPERSON ON FISCAL YEARS 2016 AND 2017 BUDGET RECOMMENDATIONS BY CHRISTOPHER H. LOGSDON, M.B.A., EXECUTIVE DIRECTOR OHIO STATE BOARD OF COSMETOLOGY MAY 6, 2015 INTRODUCTION: Senator Jordan and respected members of the Senate Finance Subcommittee on General Government, my name is Christopher Logsdon and I am the recently appointed Executive Director for the Ohio State Board of Cosmetology. Although recently appointed to this position, I have spent the last twenty-four years serving the state of Ohio as the Executive Director for the Ohio Respiratory Care Board. I appear before this subcommittee to seek the support of the Ohio Senate concerning the Ohio State Board of Cosmetology s Fiscal Year 2016 and 2017 budget recommendations contained in Sub. H.B. 64. After a brief description of the Board and its role, I would like to focus the majority of my testimony on the Ohio State Board of Cosmetology s budget recommendations. THE OHIO STATE BOARD OF COSMETOLOGY: The Ohio State Board of Cosmetology (hereafter referred to as the Board ) is a unique regulatory board engaged in the governance of business, schools, and providers of branches of Cosmetology and Tanning services. The Board s stated mission is to protect and support the public through regulation and education while promoting the integrity of the industry. The Board meets this mission through an engaged process that involves overseeing curriculum and practice standards of cosmetology schools, cosmetology salons, tanning facilities, and individuals engaged in the many branches of cosmetology, including full cosmetology services, hair design, manicuring, natural hair styling, and esthetics. The Board embraces the concept of smart, but limited governance to reduce Other Current Board Members Steve Thompson Clara Osterhage Charles Penzone Valerie Benfer Luke Hanks Tasha Sheipline Shalini Gupta, M.D. Columbus, OH Centerville, OH Powell, OH Willard, OH Orient, OH Wapakoneta, OH Cincinnati, OH

2 2 P age negative impact on businesses and individuals. In total, the Board issues licenses to 89,799 individual providers of branches of Cosmetology and approximately 11,476 licenses and permits to salons engaged in cosmetology, hair design, manicuring, natural hair, esthetics, and tanning services. Including instructor licenses, the Ohio State Board of Cosmetology renews approximately 101,000 licensed entities on a biennial basis. (Table 1) Additionally, the Board inspects the physical site, establishes, and monitors the curriculum of more than 189 proprietary and Career Technical Cosmetology Schools in the state of Ohio. Table 1. Provider Licenses Instructor Licenses Salons Cosmetologist Cosmetologist Instructors 3274 Cosmetology 8403 Estheticians 3022 Esthetician Instructors 94 Esthetician 606 Hair Design 190 Hair Design Instructors 2 Hair Design 265 Manicurist 9966 Manicurist Instructors 103 Manicuring 1059 Natural Hair 30 Natural Hair Instructors 3 Natural Hair 8 Independent Contractor Tanning 1135 The Board s core mandates are to test minimum competencies of persons seeking to enter into one or more of the service branches of Cosmetology and to ensure that salons and individuals engaging in offering those services are compliant with infection control and safety standards established by the Board. The Board conducts its own theory and practical examination in Cosmetology and each branch of Cosmetology at its office in Grove City, Ohio. Annually, the Board tests over 15,000 candidates seeking to enter the Cosmetology industry. The State Board of Cosmetology consists of nine individuals appointed by the Governor with the advice and consent of the Ohio Senate. The State Board of Cosmetology is comprised of three graduate licensed cosmetologists, two of whom are actively engaged in the management of a beauty salon at the time of appointment; one regularly licensed physician; one owner of a licensed school of cosmetology; one member of the public; one Independent Contractor (IC) or owner of a salon that employs IC s; one person who represents individuals who teach the theory and practice of a branch of cosmetology at a vocational school; and one owner of at least five licensed beauty salons. The Ohio State Board of Cosmetology employs thirty-three (33) support staff and eight (8) administrative staff to complete the spectrum of duties entrusted to them by the Board. EXECUTIVE BUDGET RECOMMENDATIONS: The Board supports the budget recommendations contained in Sub. H.B. 64 of $3,758, in FY 2016 and $3,819, in FY The Board's budget was prepared using a zero-based budgeting approach. This process assumes no base budget for our agency and its programs. Each program s mission-critical goals and objectives were separately evaluated. The costs to meet each

3 3 P age program s goals and objectives were built into the budget to determine the agency s funding needs for the next biennium. The amount reflected in the Executive Budget will fund continued operations for the Board at the current service levels. Effect of the Budget Recommendations The budget recommendations contained in Sub. H.B. 64 of $3,758, in FY 2016 represent an 8.2% overall increase from FY 2015 funding. FY 2017 recommendations for $3,819, represent a 1.6% increase over FY 2016 funding recommendations. Payroll costs represent the greatest change in the budget amounting to an increase of 8.4% in FY 2016 and an additional 1.6% increase in FY 2017 over FY Payroll costs were based upon the agency s current personnel ceiling using the wage and benefits models developed by the Office of Budget and Management under the SOPPS system. Purchased Personnel Services and Maintenance Services represent the second greatest change in the agency s budget request. Continued funding for existing personnel and Board Members The budget recommendations will support current payroll costs for our existing office staff and board members (budgeted at 96 hours annually). In addition, the budget recommendations provide funding to meet the payroll obligations to fill the Executive Director position that was only recently filled and support a new position to assist the Board with examination development, maintenance, and policy development for each program area administered by the Board. Payroll costs represent approximately 78% of the Board s recommended budget in both FY 2016 and FY This funding permits the Board to carry out its mandates, which includes in FY 2015 administering more than 15,000 theory and practical examinations each year, issuing an estimated 7725 new individual licenses, 1638 salon licenses, and issuing an estimated 988 violation notices. (Table 2) Table 2.

4 4 P age Inspection activity has remained relatively constant, meaning the Board is averaging approximately the same number of inspections (averaging about 12,000 annually) over the past few years. Violations of Board standards are found approximately 7.8% of the time. Notable; however, are the number of warnings given. In FY 2015, the Board implemented new reasonable inspection procedures that took into consideration the severity of infractions. New guidelines are based on the seriousness of the infractions, which have reduced the number of overall violations and increased warnings for non-critical findings. As a result, the Board believes it has achieved a more balanced approach to conducting inspections that reduces the number of violations issued, while encouraging better education and compliance. The Board plans to continue development of its reasonable inspection standards over the next two years with objectives to reduce bureaucracy, improve compliance through better education, and concentrating enforcement resources on high risk activity. (Table 3) Table 3. Additionally, the Board renews licenses on a biennial basis, resulting in approximately 101,000 individual and salon licenses being renewed through the State of Ohio s elicense system during the three months that precede the biennial license expiration date. During this three month period, Board staff collectively handles an average of 867 telephone inquiries per day. Purchase service funding Purchase services funding supports contract services used by the Board to conduct intermittent work that does not rise to the level of needing to hire staff or to complete work that requires specialized skills or knowledge that can be more efficiently performed by a contractor. The Board contracts two primary services: (1) Court reporting services this contract covers the cost of expert personnel to record the proceedings of the Board, including board meetings, rules hearings, and administrative hearings held before the agency. Additionally, the Board contracts for Hearing Examiners services. Hearing examiners conduct administrative hearings and write reports and recommendations for the Board pursuant to requests received in compliance with Chapter 119 of the Revised Code. Continued funding of maintenance expenses

5 5 P age The budget recommendations for FY 2016/2017 will provide for continued funding for maintenance service costs. Most maintenance expenses are fixed and directly related to services rendered to the Board through the Department of Administrative Services. Maintenance account spending includes information technology support services, internet connectivity, telephone charges, mail presort and postage, office rent, central service agency charges, financial transaction services for online payments, and elicense system use. In addition, these costs include Board member and investigative travel expenses, office supplies, and credit card processing fees for online license renewal. The maintenance budget is highly dependent upon stable costs associated with DAS services. Unforeseen fee increases for DAS services can have a significant impact on the Board s maintenance budget. CONCLUSIONS: In FY 2014, the Board began a process of updating its inspection guidance for field inspections to create reasonable inspection standards. We believe we have more to do and greater improvements can be realized. Over the next two years, the Board will be reviewing its rules and procedures in an effort to clarify, improve, and balance effective oversight of the Cosmetology and Tanning industry. In February 2015, the Board approved a three-year strategic plan. Among the nine objectives stated in the plan is a goal to strengthen the existing structure of the agency, emphasizing a focus on strong foundational policies and procedures, consistent and predictable core program outcomes, and maximizing agency resources to limit growth. Additionally, the Board has just recently engaged LeanOhio to conduct a targeted review of services to find process bottlenecks, improve workflow, and align the agency s workforce to better match the mission and needs of the agency. The Board must consider the impact of its regulations on businesses and individuals by enacting rules and procedures that strike a balance between protecting the public through effective monitoring of infection control and safety standards, licensing competent providers, and upholding strong educational standards; while identifying and reducing processes that create an overreaching and unnecessary bureaucracy or negative impact on businesses and individuals. Historically, the Board lapses a very small amount of its annual budget, a testimony to very tight budget analysis and planning. The Board, like all agencies, is expected to continually identify unnecessary expenditures, new efficiencies, and less expensive alternatives to reduce its budget. Doing so requires the Board to continually evaluate its mission, its priorities, and analyze the impact of tradeoffs that may be identified. The Board and its staff are committed to evaluating methods to reduce spending while meeting the agency s mission critical objectives within the budget parameters. In conclusion, the Board is seeking approval of the budget recommendations in the amount of $3,758, for FY 2016 and $3,819, for FY Should you have any questions regarding the Board's FY 2016 and FY 2017 budget recommendations, I would be pleased to address them.