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Counties Struggle To Be Heard As Medicaid Tax Stays On Chopping Block
By: Susan Tebben
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UPDATE 2:30 p.m.: The counties receiving the managed care organization sales tax might see a reprieve to the total loss of funding, under the budget just passed by the Ohio legislature.
An amendment was included in the budget passed on Wednesday night, that now awaits Governor John Kasich’s signature.
The amendment, submitted by Senator Matt Dolan and supported by Representative Bill Seitz, asks that the state raise the “franchise fee,” which was originally in the budget to salvage the funds the state government would lose as a part of the managed care tax change. Raising the franchise fee would bring in $207 million per year for counties and transit systems, according to the County Commissioners Association of Ohio (CCAO).
But the amendment and the budget are not out of the woods yet, according to CCAO officials.
“The governor has stated that he will veto anything that jeopardizes the current waiver granted by the U.S. Centers for Medicare and Medicaid Services,” the association said in a call-to-action after the budget was passed.
Local county leaders have grown frustrated with the wait to see what will happen to their piece of the state budget, and say they are being ignored by the administration seeking to pass it.
One of the biggest problems for places like Meigs County is the proposed loss of the Medicaid Managed Care Organization (MCO) sales tax. The sales tax is allocated to local government funds, and has been a part of local county budgets since 2009.
Under the Governor’s budget proposal that annual funding goes away.
The cut equates to a nearly $580,000 loss for Meigs County. County Commissioner Randy Smith said that represents a loss of about 10 percent of the county’s operating budget.
“That could literally (affect) everything in the county, from courthouse services…to cuts to staff,” Smith said in February, after a meeting about the proposed cuts.
Surrounding counties stand to lose a significant amount as well.
Athens County would see an $850,000 loss in the managed care tax, according to 2015 sales tax numbers.
Gallia County could lose nearly $600,000 in managed care tax if the proposed budget goes through unchanged, and Jackson County would be out more than $750,000.
“We’re the foot soldiers of that legislation, whatever they choose to pass,” Smith said. “We’ve got to figure out a way to implement it, and how are we supposed to do that if we’re not properly funded?”
The Governor’s Office said their hands were tied after the federal Centers for Medicare and Medicaid Services notified the state that Ohio’s Medicaid MCO sales tax would “no longer be a permissible taxing method used to draw down Medicaid matching funds from the federal government.”
“To assist with this federal rule change, the largest dollar increase in the governor’s proposed budget will go to help locals deal with this adjustment while maintaining fiscal stability, limiting negative impacts on Ohio’s non-Medicaid MCOs and providing assistance to counties and transit authorities,” wrote Emmalee Kalmbach, press secretary to the governor, in a statement to WOUB.
The governor’s office has proposed “temporary, need-based support” to counties losing the funding. That includes two types of “transition assistance.”
$49 million would be split between all 88 counties in Ohio as a “revenue replacement calculation,” to be made in late 2017. Another $158 million will be spread out to counties for which the MCO tax represents more than four percent of their total tax revenue. This money will be given in lump sums over multiple years.
“But at the end of that, if, say, Vinton County, doesn’t have any more money left, and no industry has come in, that’s it,” Smith said.
Smith said Meigs County officials have been to Columbus multiple times testifying about the budget, and have asked for time with the governor as well.
The loss of funds hits hard in an area where the battle against opioid abuse – a topic the governor has used to fight for his version of the budget – is always in the spotlight. Smith said that makes the budget changes a matter of public safety.
“We’re the ones in the streets dealing with it, it’s our jails dealing with it, our medics and EMTs dealing with it,” Smith said. “It’s not the governor.”
The Ohio budget is awaiting approval by the legislature before it heads back to the Governor’s desk.