Commissioner disappointed by Gov. Kasich

SIDNEY — Shelby County Commissioner Tony Bornhorst has responded to Gov. John Kasich’s veto dealing with a sales tax revenue.

Bornhorst has released for the following statement:

“During the State of Ohio Budget process for Fiscal Years 2018-19, which is very close to conclusion, counties have been advocating for a solution to the loss of Medicaid Managed Care Organizations (MCO) Sales Tax Revenue. For the past 6 years, Sales Tax has been applied to the services provided by MCO’s for Medicaid recipients. The state received 5.75 percent and Shelby County received 1.5 percent Sales Tax on these services. That sales tax will no longer be collected as of July 1, 2017. The loss of revenue for the State is roughly 587 million dollars, 207 million dollars total to Counties and Transit Authorities and the loss to Shelby County is about $455 thousand. The governor proposed in his budget to replace those Sales Tax dollars by increasing the Health Insuring Corporation (HIC) franchise fee by an amount that equals $625 million for the state of Ohio. The governor provided a one-time payment to Counties and Transit Authorities in Fiscal 2018 based on prior MCO sales tax revenue receipts and applying a formula that takes into consideration reliance and other factors. Shelby County’s amount would be close to $205,000. According to the governor, this one-time payment will be enough for counties and transit authorities to make adjustments while the State of Ohio continues to collect in the future.

“I wish to thank the entire Senate and House members for their efforts to include in their version of the Budget an amendment that addressed the loss of MCO Sales Tax revenue to the Counties and Transit Authorities. This amendment would provide for the one-time payout of roughly $207 million to Counties in Fiscal 2018, and then reset the HIC franchise fee at a level to replace both the State’s and County and Transit Authority’s revenue in future years. Unfortunately the Governor vetoed this amendment on Friday.

Shelby County’s General Fund Budget expenditures for 2017 are $178,000 less than 2002’s expenditures. During that same fifteen years the State of Ohio General Fund expenditures has gone up 54.7 percent. We are doing more with less for quite some time. In the last three State of Ohio budgets under Gov. Kasich, the Shelby County General Fund has lost $1,278,000/year in revenue due to State cuts to LGF (Local Government Funds) and elimination of TPP (Tangible Personal Property) tax reimbursement. If you include the elimination of the $455,000 of MCO Sales Tax, Shelby County’s total loss will be over $1.7 million. Shelby County only funds five areas that are not mandated by Ohio Revised Code and they are: Extension, Soil and Water Conservation, Senior Center, Public Transit and Economic Development. The loss of this MCO Sale Tax revenue jeopardizes the funding of these five entities receiving about $439,000 total. All are good and worthy expenditures, but the State, and let me be clear, the governor, has put the Shelby County Commissioners in a no-win situation.

The governor’s veto continues his legacy of being critical of the services that counties and local governments provide. My disappointment of the Governor is not only rooted in his veto, but also in himself and staff of providing misinformation during this entire budget process. First, the governor has stated the MCO sales tax has only been applied for six years, so Counties should not have been reliant on those dollars, yet he chose an option to keep the State whole and actually is collecting $28 million more than what the State was previously collecting.

“Second, Gov. Kasich and staff stated that increasing the HIC franchise fee may jeopardize the waiver already received by the State of Ohio from the United States Centers for Medicare and Medicaid Services. In his written veto he states, ‘Requesting a change puts the approved waiver in jeopardy and risks the loss of the $615 million net benefit currently permitted by the waiver.’ Expert counsel hired by CCAO (County Commissioners Association of Ohio) reported that the waiver would not be jeopardized by asking to increase the HIC fee to accommodate the $207 million lost to Counties and Transit Authorities.

“Third, the governor has stated that he will not agree to new taxes by counties. This is not a new tax, it is a replacement of lost tax revenue by a fee, and the contradiction here is that it is OK for the state to replace their lost revenue by this fee, yet not OK for counties and transit authorities!

“Lastly, the governor continues to talk about fiscal responsibility. In Fiscal 2018 he could have saved the state of Ohio $207 million in the one-time payout to counties and transit authorities if he would have just increased the HIC fee at the beginning to keep both the state of Ohio and counties whole in replacing the lost revenue of MCO Sales Tax. I am not sure what has prompted the governor to be so critical of local government, but definitely clouded his judgement on this particular issue, and cost the taxpayers $207 million dollars in 2018.

“I ask for Sen. Matt Huffman, Rep. (Keith) Faber and Rep. (Nino) Vitale to override the Governor’s veto of the Budget Amendment that provided for a solution to the loss of revenue dollars to Counties and Transit Authorities. Those dollars are extremely important to Shelby County to maintain the services that we provide to citizens. I encourage Shelby County residents to call Sen. Huffman, and Reps. Faber and Vitale to let them know the importance of overriding the governor’s veto,” concluded Bornhorst.