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The Suburbanite
  • Turnabout is fair play in budget talks

  • The issue: Local government fund

    Our view: ‘Bring dollars back home’ isn’t just pro-Medicaid argument

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  • The issue: Local government fund
    Our view: ‘Bring dollars back home’ isn’t just pro-Medicaid argument
    When Gov. John Kasich announced that he wants to expand the state’s Medicaid program, he described the decision in part as a way to bring more of Ohioans’ tax dollars back home from Washington.
    Maybe that’s the best argument local government officials can make to him as they continue to struggle with diminished levels of state funding: Let local dollars come back home from Columbus.
    If state legislators approve the Medicaid expansion that Kasich has written into his two-year budget proposal, the federal government will pay for the entire expansion for three years, then will reduce its share gradually to 90 percent by 2022.
    In contrast, Kasich’s budget would give local governments a modest $28 million hike in funding that comes nowhere near replacing the $633 million that the state has cut from the local government fund — used for police, firefighting and other basic services — just since 2011.
    Meanwhile, starting this year, communities also lose revenue from the now-defunct estate tax. And Ohio’s four new casinos are likely to pay cities and counties less than half the amount that was projected when the casino amendment was on the statewide ballot in 2009.
    Budget Director Tim Keen, challenged on the local government fund cuts during his testimony before the House Finance Committee early this month, said: “We have a state-law system in place that provides the local governments a means to raise revenue to cover their costs. I think it’s appropriate that the taxes are raised by the jurisdiction where the services are provided.”
    Well, yes, after a fashion.
    State law doesn’t permit cities to consider sales taxes. And while counties would benefit from
    the expansion of the sales tax in Kasich’s budget, it certainly won’t be to the extent that the state would benefit. The budget calls for the state to lower local sales tax rates and to forbid any local sales tax increases for three years.
    The Medicaid expansion is popular with Democrats in the Statehouse but not so much with legislators in Kasich’s own Republican Party. Democrats looking for a bargaining chip for their votes in favor of the budget will find one in the local government fund.