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Economy

Kasich's Veto on Hiking the Managed-Care Tax, Explained

Kent Scarrett
OHIO MUNICIPAL LEAGUE

One of Gov. John Kasich’s vetoes overridden by the House last week involves a tax on managed-care organizations that helps raise money for counties and transit authorities. Those local groups are hoping senators go along with that override.

Kasich had vetoed a plan to ask for a tax increase on  managed-care organizations.

But Kent Scarett with the Ohio Municipal League says counties and transit authorities raise $200 million each year through piggyback sales taxes on that MCO tax, so the loss will be devastating.

“They’re really going to be on their own to try and make up these differences, and we’re all in the pot together to try and continue with the level of services that businesses and residents expect,” he said.

Business groups have come out for Kasich’s veto, saying an override and the tax increase that could result could raise insurance costs. If the Senate agrees to override, the state will ask the feds to broaden and hike the tax, and Kasich says he doubts the federal government would OK it.