Drug money in, tax cuts out
Despite $800 million less to spend because of declining tax revenue, House Republicans plan to pump an additional $170 million over two years into battling the state’s growing drug crisis.
Also, say goodbye to Gov. John Kasich’s proposed income-tax cuts. Say hello to tuition increases. And those cuts that local school districts were facing under Kasich’s proposal? For some, they’ll still be there, though not as deep.
House Republicans will roll out significant changes today to Kasich’s proposed two-year, $66.9 billion budget, including across-the-board cuts for
a number of agencies and a request to impose work requirements on able-bodied adults who are part of Medicaid expansion.
House GOP leaders have said they want to make fighting Ohio’s opioid crisis a priority.
Sources say the additional $170 million will be directed to a variety of areas, including prevention, child-protective services, kinship care, detox and transitional housing and drug-court expansion.
The goal, sources say, is to take a comprehensive approach to an epidemic that killed 3,050 Ohioans in 2015 — tops in the country — and an estimated 4,000-plus last year.
House Republicans are expected to add $80 million to schools over two years, although few districts are expected to see significant funding boosts.
Under Kasich’s plan, 390 of Ohio’s 610 districts faced funding cuts. The House is expected to leave unchanged his provision that says districts that lost at least 5 percent of enrollment over five years would be subject to cuts of up to 5 percent in 2018. Kasich also capped formula funding increases at 5 percent per year.
Under the House plan, the cap would rise to 5.5 percent, helping Olentangy and multiple districts in Franklin County. Capacity aid would increase, helping poorer districts, and the base per-pupil funding would increase from $6,000 to $6,020.
The House will eliminate Kasich’s tax plan, which included $3.1 billion in income-tax cuts offset by about $3.1 billion in tax increases. The House is expected to do a minor reduction in the number of state income-tax brackets that is not expected to create tax savings.
The House also will eliminate Kasich’s proposed centralized collection of municipal business taxes, but exactly how businesses will utilize the Ohio Business Gateway to file tax forms online is expected to get additional debate. The House may propose charging businesses a 1 percent filing fee through the Gateway, but business groups are opposed.
House GOP leaders will delay Kasich’s plan to move 150,000 elderly and disabled Medicaid beneficiaries receiving long-termcare services into managed care.
The delay is a win for nursing homes, assisted-living facilities and other providers that argued they already provide care coordination. They also pointed to patients being denied services and payment delays under a pilot managedcare project, MyCare, that’s now serving more than 108,000 Ohioans covered by Medicaid and Medicare — the so-called dual eligibles. The longterm-care groups asked lawmakers to delay the plan until at least 2021 and create a study group.
Managed-care companies argue that MyCare has saved nearly $100 million in its first three years, and they are ready to expand.
The tax-funded Medicaid program provides health insurance to more than 3 million poor and disabled Ohioans. Nearly 90 percent of beneficiaries are enrolled in managed-care plans. Kasich’s proposal would have moved the remaining enrollees into managed care with the exception of those with developmental disabilities. The administration projected no initial savings from the move, proposed to start July 1, 2018, but managed-care companies estimated cost reductions of up to $363 million a year.
For higher education, the House plans to eliminate $20 million per year from its major state funding source, and flat-fund the Ohio College Opportunity Grant.
Kasich’s proposal that capped at $300 what undergraduate students would pay annually for textbooks will be gone. University leaders saw it as an unfunded mandate that could cost $300 million per year.
While Kasich proposed a tuition freeze, House Republicans are going to lift the cap with one caveat: If a university increases tuition, it also must offer students a guarantee that tuition will remain the same throughout the student’s undergraduate career. The House also would allow community colleges to do a $10 per-credit-hour increase.