COLUMBUS—State Representative Dave Greenspan (R-Westlake) announced that the Ohio House has voted to override the Governor’s veto of a provision in the state biennial budget bill related to the managed care organizations (MCOs) sales tax replacement plan.

Under the budget bill, House Bill 49, Medicaid managed care organizations would be subject to a franchise fee, replacing a state and local sales tax on purchases made by Medicaid MCOs. In 2014, the state of Ohio was advised by the federal government that applying this sales tax was no longer permissible under federal law and that Ohio must comply by the end of June 2017.

This franchise fee will be a replacement for the revenue local governments previously collected through the MCO sales tax. The House overrode the Governor’s veto of this provision, including a measure that requires the Director of the Ohio Department of Medicaid to seek federal approval to raise the franchise fee, which has the potential to raise up to an additional $207 million each fiscal year.

“This is an important message to send to our local partners, including Cuyahoga County and RTA, that we support their efforts to serve the residents and businesses of northeast Ohio,” said Rep. Greenspan.

The additional funds raised will be distributed to each county and transit authority that experiences reduced sales tax revenues due to the cessation of the sales tax on Medicaid MCOs, providing more aid to counties in their fight against the opioid epidemic.

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