Local officials get primer on cuts in Medicaid
Medicaid is the most-funded program in the state’s budget, but within the next four months a significant loss in revenues due to federal mandates is expected to hit local counties hard.
County commissioners and representatives from the area met Monday in Marietta to discuss concerns with Gov. John Kasich’s proposed budget for the next two years concerning the loss in tax revenue and what the lack of funds could do to local governments.
“The fact of the matter is that we have a lot of unmet needs in the state that there’s not money for,” said Rep. Jack Cera, D-Bellaire.
In July 2014, the federal Centers for Medicare and Medicaid Services advised state Medicaid directors that taxing a subset of health care providers at the same rate as a statewide sales tax is subject to the definition of a health care related tax and is not permissible. CMS gave Ohio until the end of June of this year to remove the tax, which generated more than $209 million in fiscal year 2016.
Kasich’s plan offers a transition aid program to wean local governments off of reliance on the revenue, but local county commissioners say there is no weening without a replacement source of income.
With flat revenue streams from property and income taxes, Southeastern Ohio counties rely on sales tax to fuel their general funds.
“Folks are more dependent now on this sales tax than they have ever been,” explained Brad Cole, managing director of research for the County Commissioners Association of Ohio. “This will first start to impact local governments in the final quarter of this year.”
Washington County’s current general fund draws 6.14 percent, or $827,368, of its revenue from the tax. In Noble County 8.42 percent, or $168,168, of the county general fund comes from the tax. The $279,055 take for Morgan County is 16 percent of its general fund budget and in Monroe County 7.05 percent, or $228,684, of the general fund comes from the tax.
“There are a lot of mandates from the state already that go unfunded,” said Washington County Commissioner Rick Walters. “So if they’re going to reduce revenues, they need to reduce the mandates we are forced to fund on our own.”
Ohio Rep. Andy Thompson, R-Marietta, said the current budget proposal by Kasich will be reviewed well before July in budget committee meetings and that the concerns of commissioners present, along with those across the state, will be of great benefit.
“We’ll have to look at this and make corrections,” said Thompson. “I suspect we’ll be huddling on this project but I hope there will in the end be more authority passed back down from Washington and Columbus to local governments so that you have more freedom and latitude to spend your tax dollars where you need them.”
The meeting at Buckeye Hills-Hocking Valley Regional Development District also addressed the continuing opiate epidemic and its cost on local government funds, specifically in the cost of care for the children of addicts.
“Let us take care of our own kids here in Southeast Ohio instead of having to send them to Pittsburgh because we have no facilities to house them,” said Washington County Commissioner Ron Feathers. “Right now state mandates reach too far into our pockets and we end up spending $350 per day to send kids outside the county that need therapeutic care.”
Noble County Commissioner Ty Moore agreed with Feathers and suggested that local counties band together to fund local treatment options for both adults and youth in an effort to defray costs of out of region care.
At a glance
¯ In July 2014, federal officials advised Ohio Medicaid that taxing a subset of health care providers at the same rate as a statewide sales tax is subject to the definition of a health care related tax and is not permissible.
¯ Ohio has until the end of June of this year to remove the tax.
¯ 6.14 percent, or $827,368, of Washington County’s general fund is drawn from the tax.
¯ 8.42 percent, or $168,168, of Noble County’s general fund is drawn from the tax.
¯ 16 percent, or $279,055, of Morgan County’s general fund is drawn from the tax.
¯ 7.05 percent, or $228,684, of Monroe County’s general fund is drawn from the tax.
Source: County Commissioners of Ohio Association.