EDITORIAL: Again, give Ohio counties what they deserve

July 04--Ohio counties and transit agencies just want to be made whole for now. They persuaded the Republican majorities at the Statehouse to include a provision in the new two-year state budget that would replace revenue lost due to the expiration of a sales tax on Medicaid managed care organizations. On Friday, John Kasich struck the language. Will House members seek to override the governor's line-item veto at their session schedule for Thursday?

The governor's office has mobilized to make its argument for why the veto should hold. It warns that no matter how well intentioned lawmakers appear, the provision puts at risk $615 million a year, an amount the state cannot afford to lose.

How would a proposal designed to route roughly $200 million a year to counties and transit agencies lead to losing three times that amount? Recall that the federal government found the sales tax on Medicaid managed care organizations violated regulations. The tax applied too narrowly. The state responded by winning permission from federal officials to increase a franchise fee on all insurers.

That would cover the state for its loss. Unfortunately, counties and transit agencies no longer could piggyback on the sales tax. To provide a cushion against the fall in revenue, the governor proposed a one-year fix.

Counties and transit agencies argued: That isn't good enough, Summit County, for instance, looking at a shortfall of $3.5 million annually. Lawmakers then devised their remedy. They called for the governor to seek from federal officials an additional increase in the franchise fee, making the local entities whole for six years, or a fair and measured transition.

A responsible compromise? The governor's office counters: Not really. It argues that getting the franchise fee for the state already was a big challenge, adding that lawmakers seek an increase beyond anything federal officials have approved.

More, it reminds: Administrations have changed in Washington, the Trump White House with a different view than its predecessor. Tom Price, the secretary of health and human services, looks unfavorably on such fees. The governor's office fears even making a request for the increase could result in a re-evaluation of the concept and the state eventually losing the entire revenue stream.

Thus, its case: Seeking $200 million isn't worth risking $615 million.

For their part, counties, transit agencies and supportive lawmakers anticipated the concern. The provision sets out a "stair-step approach," the first asking federal officials whether the franchise fee can be increased. Is that really so dangerous?

A governor's office fretful about a veto override -- and worse -- would do well to take its own responsible step. It has been at the front in making things fiscally difficult for local governments to address priorities. Why not acknowledge the consensus of local officials and state lawmakers by finally proposing a reasonable cushion for counties and transit agencies?

___

(c)2017 the Akron Beacon Journal (Akron, Ohio)

Visit the Akron Beacon Journal (Akron, Ohio) at www.ohio.com

Distributed by Tribune Content Agency, LLC.