Governor signs $74 billion budget, vetoes 14 provisions

Jul. 2—COLUMBUS — Gov. Mike DeWine said his decision to veto budget language sought by the insurance arm of ProMedica was among the toughest he has had to make as governor.

"I cannot tell you how disappointed I was when the results came back [from last spring's Medicaid managed-care provider selection process] and a very significant company from northwest Ohio was not on the list of winners," he said. "I understand what this company means to Toledo. I understand what it means to northwest Ohio.

"But for me to allow this language to be passed would be to say that the careful procedure we had put together could be upended by this language," Mr. DeWine. "As painful as it was to make this decision, it was a decision that I felt I had to make..."

After the prior fiscal year had already expired, the governor signed a $74 billion, two-year budget that promises more than $1.6 billion in income-tax cuts, $250 million in broadband expansion, and a major overhaul of how the state funds primary and secondary schools.

But first, he used one of his 14 line-item vetoes to remove language that would have dictated how the Ohio Department of Medicaid would select future companies to oversee the biggest chunk of the state's budget.

Lawmakers had already removed budget language sought by Paramount Advantage, the Maumee-based insurance arm of ProMedica, that would have forced the state to scrap the April managed-care contracts it had awarded and to redo the selection process after Paramount was the only current provider not to get one.

But lawmakers left language in the budget that would have required the department to consider such factors as whether a provider is based in Ohio, the number of jobs involved, and potential economic-development when it comes to awarding such contracts in the future. That was the language Mr. DeWine struck early Thursday.

He made his comments while standing next to state Sen. Theresa Gavarone (R., Bowling Green), author of the ProMedica language. She was on the six-member conference committee that fashioned the final budget bill that reached the governor's desk.

She expressed disappointment after the budget news conference, noting she had a phone conversation with the governor Wednesday in hopes of saving the language.

"I certainly expressed my concerns," she said. "I have fought tirelessly for the 600 jobs and the 240,000 people who have coverage through Paramount.

"Paramount is an Ohio company with a track record for providing Medicaid services in Ohio for 28 years," Ms. Gavarone said. "They've had high quality rankings throughout. I think the amendment we had in the budget would have helped continue those services and help keep this Ohio company serving Ohioans."

Mr. DeWine said allowing the language to stand would have undermined the reforms his administration has championed in the federal-state health insurance program-of-last-resort for the poor, disabled, and infirm.

"We put together a new procurement protocol where we were going to hire companies, and those companies needed to buy into our vision," he said. "And not only did they need to buy into our vision, they needed to have the ability to carry it out."

He insisted the selection process was objective.

"We had winners," he said. "We had losers. The process worked."

In a statement, ProMedica said it appreciated the efforts of state legislators and community leaders to address the issue.

"While we are disappointed that Governor DeWine vetoed the language that could have effectively kept Paramount in the managed-care plan, we will forge ahead, reviewing and pursuing strategic and legal options that would allow Paramount to continue providing high-quality managed care to nearly a quarter of a million Medicaid members and save 600 Ohio jobs," it said.

Mr. DeWine also struck a provision that would have vacated violations of coronavirus-related health orders by liquor-license holders after March 14, 2020, reinstated their revoked licenses in some cases, and ordered refunds of fines and penalties.

Mr. DeWine said that would have sent the wrong message.

"It really would not be fair for 99-plus percent of retail people who did a phenomenal job, who played by the rules and did everything they could to keep their customers safe, for us to turn around right now and the few who had been cited by our liquor control agents to say to them there's no consequences."

Among other things, he crossed out items he said could undermine sponsor oversight of charter schools, create a second judicial avenue for handling complaints of open-meetings law violations, and cement Medicaid provider rates in statute.

The governor raised relatively few objections to the spending plan, which was helped by tax coffers overflowing with cash despite last year's coronavirus shutdown and fueled by billions in federal stimulus dollars.

In addition to providing the 3 percent across-the-board income-tax cut, the budget eliminates the top bracket for those earning more than $220,300 a year, ultimately bringing the top marginal rate down from nearly 4.8 percent to 3.99 percent.

At the other end of the scale, the threshold below which Ohioans would pay no income tax is raised from $22,150 to $25,000.

Together, these moves will cost Ohio more than $1.6 billion over the next two years. That climbs to about $2 billion when factoring in other tax breaks worked into the budget. The income-tax changes will be retroactive to the start of this calendar year.

A study by the Washington-based Institute on Taxation and Economic Policy for the left-leaning Policy Matters Ohio estimated that the top 1 percent of earners would eat up a third of the total cuts, paying about $5,400 less a year on average.

Those in the middle of the pack, earning between $42,000 and $65,000, would see an average cut of $49 under the total package — less than a dollar per weekly paycheck.

"This is the result of extensive work and collaboration by lawmakers from across Ohio," House Speaker Bob Cupp (R., Lima) said. "This is a budget that will have a positive and lasting impact for the people of Ohio."

He and Senate President Matt Huffman, a fellow Lima Republican, officially signed House Bill 110 Wednesday at the city's Veterans' Memorial Civic and Convention Center.

Generally, the Ohio House of Representatives' ambitious Fair School Funding Plan made the final plan, but only for the two years covered by this budget. Language dealing with the outer years of what would be a six-year plan, ultimately costing the state an extra $1.8 billion, was removed.

The plan, with Mr. Cupp as a chief author, attempts to finally address decades-old court rulings that found Ohio's heavy reliance on property taxes unconstitutionally placed K-12 students in poorer districts at a disadvantage compared to their counterparts in wealthier districts.

Under the plan, the state would directly pay subsidies for charter-school and voucher students rather than expect public school districts to pay for them out of their own subsidies.

The Senate, in turn, got much of what it wanted in terms of expanding EdChoice scholarships, or vouchers, for students opting for private and religious schools. The amounts would climb from $4,650 to $5,500 for kindergarten through eighth grade and from $6,000 to $7,500 for high school.

Mr. DeWine left in place controversial language that would protect physicians from litigation if they refuse to provide treatment they deem morally objectionable, a provision that drew protests from gay-rights and abortion-rights groups.

"As we close out Pride month and approach the Fourth of July, this budget is a stark reminder that some Ohioans do not enjoy the same freedoms and protections that we will be celebrating this coming weekend," said state Sen. Teresa Fedor (D., Toledo), the sole negative vote on the budget in the Senate.

"The fight for equality is far from over," she said. "I will never be able to support any legislation that legalizes discrimination."

Also untouched was a provision creating legislative oversight over Disability Rights Ohio, a non-profit advocacy organization for disabled people that receives no state funding. The organization contended that the legislative maneuver threatened its independence and treated it differently than any other advocacy organization.

First Published July 1, 2021, 2:22am

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