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Override of veto could mean end to financial woes

LISBON — The financial woes anticipated by Columbiana County commissioners could be over for now if the Ohio Senate concurs with the House in overriding the governor’s line-item veto of an amendment in the new state budget.

The new two-year state budget approved in late June by the state legislature provides replacement funding for counties that will otherwise see a significant drop in sales tax collections due to changes in federal regulations. Starting July 1, the federal government no longer allows state and local sales taxes to be assessed against Medicaid managed-care providers.

As a result, the county’s sales tax revenue is expected to decrease by $800,000 during the second half of the year and by $2.12 million in 2018, when the full impact will be felt. The two county sales taxes, which total 1.5 percent, generate about $16 million a year and account for 70 percent of all county general fund revenue.

The state budget contained a provision setting aside money for counties over the next six years to replace at least 69 percent of what would otherwise be lost. Gov. John Kasich used the line-item veto to strike down the budget amendment, but his veto was overridden by the Ohio House. The bill is now back before the Senate, which returns to session on Aug. 23 to decide which vetoes it wants to override.

If the Senate overrides the line-item veto the county could expect to receive between $1.46 million and $2.12 million annually over the next six years, with the money going away after that. All of this is contingent on the approval of the Centers for Medicare and Medicaid Services, which must agree to let Ohio collect a franchise “fee” on health insuring corporations to raise the needed money.

Commissioner Mike Halleck said they were one of the fortunate counties that could be made whole over next six years if the Senate concurs with the House. “Obviously, it’s critical to not only our county operations but every county in Ohio,” he said.

To prepare for the loss of sales tax revenue, commissioners approved a 2017 county budget that cut appropriations by 6 percent, or $800,000. If the Senate does not override the governor’s veto and Kasich’s budget proposal prevails, the county would still receive 100 percent replacement funds but just for this year and 2018.

“Either way, I think the county will be OK for the next year,” Halleck said.

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