COLUMBUS — Ohio Gov. John Kasich vetoed a number of items in the budget put before him on Friday evening, including the fix to the Medicaid-managed care organization (MCO) sales tax which is set to impact Ohio’s counties and transit authorities.
In all, Kasich vetoed 47 items, which also included a Medicaid freeze.
Local officials had been cautiously optimistic that Kasich would leave the fix to the MCO tax loss in the budget following months of efforts by state and local officials to find a way to fix the funding loss.
After the potential fix had not been in the budgets initially submitted to the conference committee by the governor, house or senate, the so called “Dolan Amendment” was placed in the budget by the six person committee assigned to set the final version of the budget to be sent to Kasich.
In the document signed by Kasich just before the midnight deadline on Friday evening, the governor lists the reasoning for his veto of the fix.
“This provision would require the Department of Medicaid to ask the United States Centers for Medicare and Medicaid services whether the franchise fee may be increased through the health insuring corporation (HIC) franchise fee and, if the fee may be so increased, to request approval for the increase,” states Kasich in the document of the purpose of the items in the budget.
“The Department was approved for a HIC waiver after demonstrating compliance with federal requirements, including that the tax be broad based and not violate hold-harmless provisions. Requesting a change puts the approved waiver in jeopardy and risks the loss of the $615 million net benefit currently permitted by the waiver. Futher, the Executive budget already provided transition payments for the counties as they adjust their budgets in preparation for the end of the existing tax. Therefore, this veto is in the public interest,” the statement concludes.
While the loss was to impact both the state and local governments, the waiver noted by Kasich fixes the loss to the state.
“We are hopeful that the legislators override the veto on July 6th. We believe the support is there,” said Commissioner Randy Smith following the Governor’s veto early Saturday morning. “I’m certainly not surprised at the Governor’s veto. He’s long made moves to hurt local government. This is clearly another one of those moves.”
Likewise, State Rep. Jay Edwards (R-Nelsonville) who represents Meigs County was disappointed by the decision, but already working to try to overturn it.
“I’m pretty upset by it,” Edwards told the Sentinel of the decision.
“I’m excited to get on the horn, call legislators. This is part of the process and the process also provides the ability to make a stand,” said Edwards.
He added that legislators have every right to go back and do something about the veto on this or other matters that they feel need addressed.
Outside of spending time in the counties he serves over the next few days, Edwards said he will be “on the horn” working to get bother senators and representatives back to Columbus to address the matter.
The County Commissioners Association of Ohio (CCAO) which has worked with the local officials to rally support for the potential fix also responded early Saturday to the veto by Kasich.
In an email statement, the CCAO addressed the veto and the impact in will have on some of the counties.
Counties testified throughout the budget process about the difficult decisions that face communities if this annual revenue to counties and transit authorities is lost and the budget realities they have been facing. For example, Shelby County’s 2017 general fund budget is currently less than the budget passed in 2002. Wayne County testified that from 2007-2015 their total revenue growth was a net total of 1 percent. Cuyahoga County shared how they are projecting a record 775 overdose deaths in 2017 and that this crisis has had a substantial impact on almost every county system, the statement noted.
“Now is not the time to leave counties behind. In the absence of a revenue replacement mechanism, counties will have to reduce or eliminate funding for programs that invest in economic growth and exacerbate the growing pressure on important systems like criminal justice, public safety, and child protection. The demand on these services is only growing in the wake of the opiate epidemic,” said CCAO Executive Director Suzanne Dulaney in the email.
“We respect the importance of Ohio’s Medicaid program, and the solution put forth is specifically tailored to protect the State of Ohio from adverse impacts to its existing waiver. We appreciate that the General Assembly worked diligently with us to find a solution for counties. We are hopeful that the strong support expressed by the General Assembly means that there will yet be good news for county government,” she concluded.
As previously reported by the Sentinel, Meigs County is to lose approximately $574,000 annually, around 10 percent of its total budget, due to the tax loss. Under the transition assistance, noted by Kasich, Meigs County is to receive a one-time payment of $3.4 million, which is equal to approximately six years of the tax loss.
In Gallia County, the annual loss figure is around $592,000.
The House of Representatives is set to meet on July 6 for the possibility of overriding the veto. It is unknown if the senate has set a date to consider the veto override.