Senate should override Kasich MCO veto
Posted July 24, 2017 in Press Releases
New Policy Matters report analyzes strong case for lawmaker’s fix
The fate of more than $200 million a year in funding for Ohio’s transit agencies and county governments is now in the hands of the Ohio Senate.
The federal government told Ohio to bring the Medicaid Managed Care provider tax (MCO tax) into compliance by broadening its base. Ohio moved the MCO tax from the state’s sales tax base to the health insuring corporation tax, but reduced the rate and cut collections. As a result, counties and transit agencies that piggybacked a local sales tax on the state base would lose $209 million a year starting in 2019.
Legislators want the cut reversed and proposed a workable solution. A strong case can be made that the legislative solution could be approved under existing federal rules. Simply investigating, as the legislature proposes, before moving forward, would not endanger the tax and its funding of Medicaid.
Lawmakers included the fix in the 2018-2019 budget. Governor John Kasich vetoed their proposal and the House overrode the veto. The Senate has not yet acted.
“The Senate should override the veto as well,” said Policy Matters Ohio Senior Project Director Wendy Patton. “Losing MCO revenues means transit agencies and county governments will have to make cuts to the essential services they provide for residents. Lawmakers acted in their constituents’ best interest when they directed the Administration to investigate a way to make counties and transit agencies whole.”
In a new report, Policy Matters shows how the solution proposed by legislators remains consistent with federal law.