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RTA managed-care sales tax fix still needed in Ohio budget: editorial

Still undone as Ohio lawmakers scramble to finalize a new two-year budget before the last one expires at midnight June 30 is a fix to keep Ohio counties from losing millions and to avoid a devastating revenue loss for sales-tax-aided transit systems such as the Greater Cleveland Regional Transit Authority.

The issue concerns sales taxes on Medicaid managed-care organizations.

The federal government has decreed Ohio can no longer impose those taxes after June 30. The budget proposed by Gov. John Kasich included a partial fix to keep state revenues intact and allow a little interim funding for counties -- but a fuller resolution is needed. At stake, according to budget testimony, is $18 million annually for RTA and $30 million for Cuyahoga County -- about 7 percent of the county's general fund -- with tens of millions more for other counties.

Luckily, state Sen. Matt Dolan, a Chagrin Falls Republican, has been pushing a solution.

And while the exact contours of a fix aren't yet resolved, a Senate budget amendment Dolan sponsored that the Senate approved Wednesday will let debate on the issue continue in the House-Senate conference committee that must hammer out final compromises on the budget in coming days.

To replace the sales tax, the budget bill -- House Bill 49 -- would levy a franchise fee on heath insuring corporation plans, producing $615 million a year for the state. But counties and transit systems don't charge franchise fees. Apart from some interim revenue-sharing, they'd be out in the cold.

Dolan is working on a permanent solution. That, not a one-time Band-Aid, is what counties and transit systems need. This issue must get the conference committee's full attention

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