Local officials make final push on tax loss


By Sarah Hawley - shawley@aimmediamidwest.com



POMEROY — Since finding out last fall that the county budget could be impacted by the medicaid managed care tax cut, the Meigs County Commissioners and others have been in communication with legislators working to find a way to offset the cuts to the counties and local governments. A public meeting was held in the county in February, including state representatives and neighboring counties to discuss the situation.

Now, just days before a balanced budget must be approved by legislators in Ohio and signed by Gov. John Kasich, there is still no fix to permanently replace the approximately $574,000 that Meigs County will lose annually.

While Meigs and other counties are losing the funding, the state, which has also received revenue from the same sales tax will not lose any money. The administration worked with the federal government to negotiate a fee which will make the state whole financially.

The fee, however, does not trickle down to the counties.

Asked for comment on the situation and the funding for the counties, Emmalee Kalmbach, Press Secretary for Gov. John Kasich’s office, stated that it is important to remember that the replacement plan is a result of a federal rule change.

“To assist with the 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,” Kalmbach stated in an email.

Kasich’s budget, and those approved by the house and senate, provide for a one time payout to the counties and transit authorities, rather than a permanent annual fix. The payouts are based on “need” although no formula has been released for how the payouts were figured. Under the payout plan, Meigs County is to receive approximately $3.4 million as a one-time payment.

A proposed budget amendment which Commissioner Randy Smith’s recent testimony supported from Senator Matt Dolan was not included in the final version of the senate budget which was approved last week. The Dolan amendment would have provided revenue to the counties and transit authorities impacted by the cuts to make them whole once again, while also leaving the payouts to the counties that was in Kasich’s budget.

Kasich’s budget provides two types of transition assistance to counties and transit authorities, a revenue replacement calculation and formula loss assistance.

The revenue replacement calculation completely replaces the revenue from Oct. 1, 2017 to Dec. 31, 2017 as a result of the loss. All 88 counties and eight transit authorities will receive this funding. The formula loss assistance will go to 80 counties and all eight transit authorities and is based on the reliance on the tax among other factors. The eight counties which receive less than four percent of their sales tax revenue from the managed care tax do not receive this funding.

Smith, who has been involved in numerous local and regional meetings on the matter, and submitted written testimony to the Senate finance committee a few weeks ago, spoke with the Sentinel about the status of the tax loss as the budget deadline approaches and what is being done to share the local position with those at the capital.

Smith is not the only local official who has worked to make Meigs County’s voice heard throughout the budget negotiation process at the state level.

Fellow commissioners Mike Bartrum and Tim Ihle, Clerk of Courts Sammi Mugrage and many other office holders, local organizations and individuals have been reaching out to legislators to share what the impact of this tax loss will mean to them, their offices and organizations.

Newly elected State Rep. Jay Edwards (R-Nelsonville) has also been hands on, working with representatives from other areas and maintaining a line of communication with local officials, said Smith.

In the last few days leading up to the June 30 budget deadline, the County Commissioners Association of Ohio (CCAO) has been encouraging its members to reach out not only to their legislators, as had been the case all along, but to the governor’s office as well.

It was that call to action that led Smith to reach out to the Governor’s Office to issue an invitation for the governor to come to Meigs County for a meeting and to see how the county operates on a day to day basis. Smith stated that he has attempted to file the request through the website he was directed to by the Governor’s Office and has also emailed regarding the request.

Smith said that should Kasich accept the invitation he would see a county where elected officials work 40 hour weeks alongside the employees in their offices; he would see a treasurer staffing the counter to take tax payments from customers; he would see a clerk completing the same duties as her deputy clerks; he would see commissioners in the office on a day to day basis conducting business on behalf of the county.

In announcing the budget in early 2017 which did not include a fix for the loss to the counties, Kasich, Smith stated, has indicated that the counties were using the tax money to create a “surplus” or “pad salaries.” While Smith said he cannot assure that that is not the case in each and every county, he said it is far from the case in Meigs County.

It is quite the opposite in Meigs County Smith indicated, stating that it was not until 2015 in which all county employees were brought up to making $10 per hour.

Now, with the cut of nearly 22 percent of the county’s sales tax revenue, and 10 percent of the overall operating budget, the county will be set back to 2012 revenue levels.

Smith said that many agencies, events and others which the county has been able to provide financial support for over the past couple years are concerned as well as to what the budget cuts may mean to them.

Additionally, while revenue levels will go back to the 2012 levels, expenses continue to rise. Mandates and new laws approved at the state level also have an impact on the budget, increasing expenses placed on the counties.

One such matter referenced by Smith is the switch to Next Gen 911 over the next few years. It would require the county to spend approximately $750,000 to follow the new guidelines in order for the county to continue to receive the approximately $100,000 annually from cell phone fees. There is no funding available from the state to complete the upgrade, but simply the loss of funding should the county, or other agencies, not comply. It is likely something that is not feasible for the county to spend the additional funding.

So what does the cut mean to the county and the services it provides. That is not yet known specifically, as the payout could help for a short period of time. The tax loss could also be something addressed by whomever is elected as governor next year, although it has not been addressed by any of the candidates at this point.

For the time being, Smith and the other remain hopeful that a fix will be put in place to make the counties whole from the tax loss and will continue to reach out to state and regional officials to make sure Meigs County’s voice is heard.

By Sarah Hawley

shawley@aimmediamidwest.com