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Panel protests proposed revenue loss
YOUNGSTOWN
The Mahoning County commissioners are trying to persuade state legislators to avoid inflicting major financial damage on county governments due to revenue losses from Ohio’s Medicaid managed-care organization sales tax.
The commissioners discussed the matter in a Tuesday staff meeting as they prepared to meet today in Columbus with state Rep. Ryan Smith, Ohio House Finance Committee chairman, and state Sen. Scott Oelslager, Ohio Senate Finance Committee chairman.
“This is more of a proactive stance, getting in front of it instead of being behind it,” said Audrey Tillis, executive director of the county commissioners’ office, referring to the strategy of meeting with legislative leaders before legislators vote on the state budget.
The commissioners’ draft letter, dated today, is accompanied by resolutions from Mahoning and other Ohio counties concerned about the funding loss.
The tax applies to insurance companies under contract with the state to cover Medicaid.
Ohio’s Medicaid MCO tax is set to expire June 30 because a federal rule says the state cannot impose such a tax on Medicaid MCOs if it does not also impose this tax on other MCOs.
A Sept. 12, 2016, resolution by the Mahoning County commissioners says the county likely will lose between $3.4 million and $3.7 million in annual sales-tax revenues.
The resolution estimated the loss to equal about 9.5 percent of the county’s 2015 sales-tax collections.
Tillis said the state’s current estimate of Mahoning’s loss is $4.4 million a year.
Sales-tax collections constitute 93 percent of the county’s criminal and administrative justice fund revenue and 46 percent of its general-fund revenue, the commissioners’ resolution says.
The letter notes that Gov. John Kasich’s 2018-19 budget proposal would fully replace the loss of Medicaid MCO sales-tax revenue to the state, but it provides counties with only a one-time allocation covering three months to a year of the foregone revenue.
In 2016, the 5.5 percent Medicaid MCO tax generated $558 million in revenue for the state and $209 million for counties and transit authorities.
Kasich’s proposed budget “maintains state fiscal stability and provides temporary need-based support to counties that stand to lose funding,” according to a fact sheet issued by the governor’s office.
“To assist with this change, the largest dollar increase in the governor’s proposed budget will go to help locals deal with this adjustment,” said Emmalee Kalmbach, the governor’s press secretary.
David Ditzler, chairman of the Mahoning County commissioners, said he isn’t sure how the county would balance its budget if the cut to county revenues proposed in the governor’s budget takes effect in its current form.
“There’s no quick fix that we can roll out,” he said.
All three commissioners said adding another quarter-percent sales tax here to compensate for this and other funding losses would be a last resort.
A quarter-percent sales tax generates about $8 million a year in the county, Tillis said.
Mahoning County government levies a total of 1.25 percent in sales tax, with 1.5 percent being the maximum state law permits.