As the state budget nears completion, local officials continue to be concerned about a lost tax that could cost the county nearly half a million dollars.
“I am not optimistic,” Union County Commissioner Gary Lee said.
The statement came in response to a budget proposal released earlier this week by the Ohio Senate. He said the proposal fails to provide a permanent replacement for the state’s soon-to-be-eliminated Medicaid managed care organization sales tax.
In 2014, the federal government told Ohio it had to stop charging sales tax on the payments doctors and hospitals receive from Medicaid, which uses federal and state dollars to pay for medical care for low-income Americans. The federal government gave states until the end of their current budget cycle, June 30 in Ohio, to do it.
While the federal government will save $756 million each year in reimbursements, Ohio will lose $558 million in revenue and local governments and agencies will lose about $200 million annually. State officials have estimated Union County’s share of the loss is $451,317, about 3.3 percent of the county’s total sales tax revenue, each year.
At a recent meeting with county office holders and department heads, County Commissioner Steve Stolte said he too is “pessimistic” and “disappointed” that local officials have not been able to sway state legislators.
He urged the office holders and department heads to “reach out” to Rep. Dorothy Pelanda and Sen. Dave Burke, “and express your disappointment in the lack of movement, positive movement with regard to that loss of Medicaid Managed Care sales tax.”
As of Wednesday, Pelanda said she had not “fully digested,” the entire proposal, but said the final budget would likely look very different.
“All I can say is that we are in the third quarter of a four quarter game,” Pelanda said.
She said there still could be significant changes when officials from the House and Senate come together to work on the budget to send to Gov. John Kasich’s desk.
Senator Dave Burke could not be reached for comment.
As recently as last week, Senate President Larry Obhof, said the matter could eventually be resolved.
The state house and senate have planned for a floor vote on the proposed budget next week and officials have said they do not feel they will have a problem having a final spending plan approved by the legislature before the end of the state fiscal year.
“I do not understand how the legislature can turn it’s back on county government like that,” said Stolte.
Lee has repeatedly testified about the need for the state to provide a permanent replacement for the state’s Medicaid managed care organization sales tax.
Lee said it is “interesting” to hear legislators tell local officials they should have known the revenue was not permanent, but watch them pull money from other areas to fill the void the missing money will create in the state budget.
“They turn around and they filled the hole that they lost, 100 percent, and I had the same argument — well they should have known that was only temporary,” Lee said. “What fits one foot, ought to fit the other.”
Lee said he heard a state legislator explain that if police and fireman are overpaid, that is a local problem.
“So their attitude is, locals have plenty of money and they aren’t going to worry about it, so it is pretty disappointing,” said Lee.
The state would offer Union County a one-time allocation of $111,000.
Local officials said the cut will not only impact the county general fund, but also county roads, bridges and senior citizens because the county charges 1 percent for sales tax along with an additional 0.25 percent, split evenly for roads and bridges and for senior services.
“Right now, it doesn’t look good, but we are just in a time when we have to wait and see,” said Lee.