By Cheryl Splain, KnoxPages.com
MOUNT VERNON — Federal regulators have ordered the state of Ohio to discontinue a sales tax imposed in 2009 on services performed by Medicaid managed-care organizations. The change will hit counties, including Knox County, hard.
“The federal government is telling us [the state] can no longer tax those services,” said Commissioner Teresa Bemiller at Thursday morning’s meeting of elected county officials. “We stand to lose close to $500,000.”
Auditor Jonette Curry said the county will take a little bit of a hit in 2017 because the tax can be applied until June 30, 2017. “In 2018, we will not receive it at all,” she said.
Curry said that state officials are still trying to determine whether any revenue can be found to offset the loss, but, based on previous instances where the state made cuts, she is not optimistic. Bemiller agreed. “The [County Commissioners Association of Ohio] is working on it with the legislature, but we’ll see what happens. We don’t usually get much help from the state,” she said.
The Center for Medicare and Medicaid Services ruled that a tax on Medicaid managed-care organizations but not other health maintenance organizations is discriminatory and in violation of federal rules. Bemiller said that officials have known that the sales tax was at risk of being overturned. The state estimates it will lose $1.1 billion over the next two-year budget, which runs from July 1, 2017, to June 30, 2019.
Curry said the county’s current financial picture is steady, with an unencumbered balance of $5.187 million in July. This compares to $2.658 million in 2015. “Real estate and sales taxes are pulling in a little bit more,” she said. “We’re really not cutting into our carryover.”
She noted that the balance includes second-half real estate revenue and that by the end of the year the balance will probably start to decline.