Ohio counties’ budgets take hit from loss of health-related tax

YOUNGSTOWN, Ohio (WYTV) – As Mahoning County commissioners start their yearly process of budget hearings and appropriations, they expect to spend roughly the same amount as this year — around $67 million — but the future is in doubt.

Mahoning County Budget Director Audrey Tillis said 2018 is going to be a planning year.

“How do we move forward? Because we don’t know what the state is gonna do.”

Six weeks ago, changes went into effect across the state, eliminating the sales taxes paid by what are known as health-related “managed care organizations,” such as HMOs and PPOs. It means millions less for local counties.

In Mahoning County, the taxes had accounted for over $4 million a year or about 10 percent of sales tax revenues.

Tillis said it’s already affecting the bottom line.

“Sales tax is up 2 percent but down because of the loss of the revenue source for the managed care organizations.”

More: Tax cuts leave Trumbull County facing big shortfall

To make up the difference, Ohio is providing a short-term fix.

“Right now, the state is providing us transition aid so that’ll take us this year and will get us through next year. Once those funds are gone, then we will have the hole going forward,” Tillis said.

She said most departments won’t see any changes for next year but budget officials will be looking for ways to either reduce spending, find new revenue sources, or both over the next 12 months.

Commissioners said the change affects every county in Ohio and some are much more reliant on those managed care dollars than this area.

In the meantime, they’ll be pressing state lawmakers to come up with a more permanent solution for all 88 of Ohio’s counties.

“We’ll continue to make it an issue and continue to do something because it’s a hole that we shouldn’t have,” Tillis said.