Mahoning budget commission ponders loss of state sales tax on Medicaid organizations
YOUNGSTOWN
The uncertainty surrounding a revenue source that brought Mahoning County between $4 million and $5 million annually loomed large at a Wednesday meeting of the county’s budget commission.
County and transit systems relied heavily on a 5.5 percent sales tax on Medicaid managed-care organizations. The tax represented $209 million, or 8.2 percent of all county and transit authority sales-tax revenues, according to the County Commissioners Association of Ohio.
But the federal Centers for Medicare and Medicaid Services told the state that applying the tax to Medicaid MCOs but not other health maintenance organizations violates federal law.
The state had to expand the tax or eliminate it. Ohio stopped collecting the tax effective July 1.
The state will continue to receive revenue through a franchise fee on all MCOs, but county revenues are less certain.
State lawmakers provided transition aid that will help counties through the end of fiscal year 2018 – Mahoning County will receive about $5.2 million for the fourth quarter of 2017 and 2018 – but nothing concrete exists beyond that.
County Prosecutor Paul Gains, who chairs the budget commission, said the loss of the MCO tax is another blow dealt to local governments by Gov. John Kasich.
“The governor touts what he’s done for the state, but doesn’t tell the public about the stress he’s put on local communities,” Gains said.
Read more about the matter in Thursday's Vindicator or on Vindy.com.