Though Enacted, State Budget Continues to Change Through Veto Overrides

HB 49 BIENNIAL BUDGET (Smith, R.) Though enacted more than a month ago, the state budget continues to change.  As reported previously, Governor Kasich signed a state operating budget bill (HB 49) into law on June 30. Before doing so, however, he line-item vetoed 47 items. The House then reconvened July 6 and overrode 11 of the vetoes. The Senate reconvened August 22 and voted to concur with the House on six veto overrides, as noted below in bold and italics.

Senate President Larry Obhof (R-Medina) said after the vote that lawmakers are still working with the administration to find compromises on other issues that were vetoed, but the items overridden Tuesday were largely efforts to reclaim legislative authority. “The administrative state has taken on what were traditionally or should be the responsibilities of the legislature, and we are starting to take some of those back,” he said.

The legislature now has until the end of the General Assembly (December of 2018) to override any of the remaining Governor’s vetoes. Compromise discussions are apparently occurring between the legislature and the administration on various topics including local revenue lost by counties and transit authorities due to the replacement of the Medicaid managed care sales tax, other matters relating to Medicaid and a provision that would have given the legislature power to appoint members to the Oil and Gas Leasing Commission instead of the governor.

The six veto overrides with which the Senate concurred include those noted below:

1. Item 3 – Controlling Board Authority: Deletes limits on the Controlling Board’s ability to adjust appropriations and create new funds. Veto overridden by both House and Senate
2. Item 23 – Medicaid Coverage of Optional Eligibility Groups: Eliminates the prohibition on the Department of Medicaid from covering any new, optional groups “unless expressly permitted by statute” because this would violate federal law requiring there be a single state agency in charge of administering the Medicaid program. Veto overridden by both House and Senate
3. Item 25 – Legislative Oversight of Rules Increasing Medicaid Rates: Eliminates the requirement that any Medicaid payment rate increase must go to the Joint Medicaid Oversight Committee and the ability for the General Assembly to, by concurrent resolution, stopping a rate increase. Veto overridden by House
4. Item 26 – Medicaid Rates for Neonatal and Newborn Services: Eliminates the provision that would require that the Department of Medicaid set rates for certain neonatal and newborn services at levels equal to 75 percent of the Medicare rates for those services, and forces the Medicaid director to reduce the rates for other services to avoid an increase in Medicaid expenditures. Veto overridden by both House and Senate
5. Item 27 – Medicaid Rates for Nursing Facilities: Eliminates the provision that makes numerous changes in the formula used to determine Medicaid payment rates for nursing facility services, including eliminating portions of the reimbursement formula that are focused on quality and accountability measures. Veto overridden by both House and Senate
6. Item 30 – Long-Term Services Added to Medicaid Managed Care: Eliminates the provision that prohibits nursing facilities, as well as home- and community-based waiver services, with limited exceptions, from being added to Medicaid managed care at any time prior to the General Assembly’s enacting legislation authorizing the addition. This provision also creates a temporary study committee to examine the merits of including these services in the managed care system. Veto overridden by House
7. Item 31 – Behavioral Health Redesign: Eliminates the provision requiring the Ohio Department of Medicaid delay the addition of behavioral health services into managed care until July 1, 2018. Veto overridden by both House and Senate
8. Item 33 – Health Insuring Corporation Franchise Fee: Deletes the provision that would require the Department of Medicaid to ask the federal Centers for Medicare and Medicaid services whether the franchise fee may be increased through the health insuring corporation (HIC) franchise fee and, if the fee may be so increased, to request approval for the increase. Veto overridden by House (this is apparently the provision that would mitigate the loss of Medicaid managed care organization sales tax that goes to counties and regional transit authorities)
9. Item 34 – Controlling Board Authorization Regarding Medicaid Expenditures: Deletes the provision requiring the director of budget and management to transfer money from the General Revenue Fund to the Health and Human Services Fund and requiring the Medicaid director to request the Controlling Board to authorize expenditures from the Health and Human Services Fund for purposes of paying for the Medicaid program. Veto overridden by both House and Senate
   Item 36 – Waiver Regarding Healthy Ohio Program: Eliminates the mandate that the Department of Medicaid request the same waiver to implement the Healthy Ohio program which was previously denied by the Centers for Medicare and Medicaid Services. Veto overridden by House
10. Item 37 – Oil and Gas Leasing Commission Appointments: Deletes the transfer of appointment authority for members of the Ohio Oil and Gas Leasing Commission from the governor to the General Assembly. Veto overridden by House