COLUMBUS, Ohio – Following an effort that pulled together counties throughout the state, a veto has brought budget loss back into question for local governments, especially in Meigs County.
The County Commissioners Association of Ohio on June 30, 2017 submitted a letter to Gov. John Kasich asking him to retain in the biennial budget bill a provision that replaces the lost Medicaid Managed Care Organization (MCO) sales tax revenue that previously went to counties and transit authorities which totaled more than $200 million in annual revenue. The governor chose to veto this portion of the budget bill.
Gallia County is facing a loss as well. “We are a lean operating machine,” Gallia County Commissioner Harold Montgomery said of the work the Gallia Commissioners have done to tighten the belt following a previous budget cut several years ago. He said he could not see how they could make cuts further without cutting services, which is the same conclusion the Meigs County Commissioners have as well. Gallia County is facing the loss of $592,650 or 12 percent of their annual budget.
The Meigs County Commissioners called together local elected officials and other county commissioners to learn more about Governor John Kasich’s proposed Ohio budget during a public forum earlier this year. Gallia County Commissioners Harold Montgomery and Brent Saunders attending the forum. Rep. Ryan Smith (R-Bidwell) of the 93rd District and Rep. Jay Edwards (R- Athens) of the 94th District were both there and listened to concerns. Both representatives had worked on a fix for the proposed budget changes and the challenges the General Assembly faced. Rep. Smith is also Chair of the House Finance Committee.
Gallia and Meigs County Commissioners also gave testimony before the final budget went to a vote. The fix, however, was vetoed by Gov. Kasich. The loss of revenue for Meigs County is almost $600,000 from the annual budget. According to Commissioner Randy Smith, it would put Meigs County “back in the Stone Age.” Smith also stated they did not expect this to end with the veto, but will continue to fight for Meigs County.
For Meigs County, the loss of the sales tax revenue stands to be more than a half million dollars or 21.7 percent of the county’s yearly budget. Other counties also hit hard by the proposed budget include Vinton County looking at 24.9 percent budget cut. Other counties such as Geauga County will only see a three percent cut to their budgets. While Geauga County would be loosing $424,333, it is still only three percent of their annual budget of $14,051,414. In comparison, Meigs County’s annual budget is around $5 million.
Frustration for the way this loss to the state budget is being handed down to rural counties and local governments has been evident through the entire process.
“I’ve watched the state. You know they’ve filled their coffers with the Rainy Day Fund. We are very thankful for that and we thought you know once we arrived at that point, maybe there would be some redistribution back to the local level. We haven’t seen much of that coming back from the state,” Commissioner Montgomery said previously.
Both Gallia and Meigs County Commissioners have been vocal in the County Commissioners Association of Ohio about various needs, but have been especially vocal about the MCO sales tax.
Many 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.
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 one 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.
“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.
The amendment sought to require the state to seek federal approval from the Centers for Medicare and Medicaid Services (CMS) to reset the franchise fee on health insuring corporations (HICs) to raise up to an additional $207 million per year, a portion of which may be used to help address Medicaid MCO reimbursement. If federal approval is granted, the state would annually distribute payments beginning soon after July 2018 to counties and transit authorities for six years. The amendment also retains the original transition aid contained in the executive budget proposal that makes one-time payments to counties and transit authorities in FY 2018 based on counties’ reliance, as determined by the administration’s formula.
“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.
Townships and villages are also expected to feel the impact of the veto on the budget fix. The question now becomes if the legislature has enough votes to override the veto. It is also possible a seperate bill could be proposed directly addressing the funding issues for local governments.