A majority of Ohio’s 88 counties, including Butler County, are imploring the state General Assembly to find a permanent fix to sales tax budget holes created when the federal government erased the Medicaid Managed Care franchise tax.
Butler County commissioners signed a resolution Monday asking state legislators to eschew the governor’s solution — the county would get a one-time $2.1 million cash infusion — to the $3.1 million per year problem. The county stands to lose 7.5 percent of their sales tax revenue, which was budgeted at $41.5 million this year.
“The board of Butler County commissioners hereby implore the Ohio General Assembly to stop shifting the state budget shortfall to local jurisdictions, penalizing Butler County for the capacity to increase sales tax as a solution to fund state and federal unfunded mandates and take immediate action against the potential loss to Butler County of over $3 million,” the resolution reads.
Butler County Finance Director Tawana Keels said the governor’s proposed fix is unfair and the state legislators need to come up with something better.
“The Ohio General Assembly is considering the capacity to increase sales tax as a solution to fund state and federal unfunded mandates,” she said. “This is a solution that simply cannot be tolerated by the county. The Ohio General Assembly must step up, adopting an equitable solution that fully replaces the loss of Medicaid MCO sales tax revenues.”
Gov. John Kasich’s executive budget — which was released last month — included $207 million for three months of this year and all of 2018 in a new fund called the “Medicaid Local Sales Tax Transition Fund.”
The governor’s budget document offered this by way of explanation:
“One-time appropriation in fiscal year 2018 is used to mitigate the effects of and assist in the adjustment to the reduced sales tax revenue of counties and affected transit authorities,” the budget document reads.
When the county first learned about the situation they said they had been told the state was working on a solution to the huge revenue reduction — the total loss to counties statewide was estimated at $145 million — it appears from the budget statement the solution is counties have to get used to lower funding.
Sen. Bill Coley said he is “sensitive” to the situation and it will be addressed during Senate budget hearings that start this week.
“Anytime my county takes a hit like that, as far as its revenue, it’s something we have to address,” Coley said. “We’ve got to look at all our options and see what’s out there and what we can do to try to help our counties.”
The county commissioners met with Coley, State Rep. Candice Keller and staffers from the County Commissioners Association of Ohio (CCAO) a few weeks ago where the tax reduction was a main topic.
Keller chose not to comment on the issue.
Cheryl Subler, managing director of policy for CCAO, said she believes in the end all 88 counties will be involved in the movement to get state legislators to help and she said that would be a pretty powerful message.
“I think when you have 88 county elected commissioners, county executives and county council members, coming together and sharing the same message, it tends to resonate and it tends to have an impact,” Subler said.
Commissioner T.C. Rogers said they might well address it, but he fears where the money might be siphoned from.
“My concern is if they take care of this that Columbus would take it from other funding sources so the net loss of funding to the county wouldn’t be that different,” Rogers said.