Governor’s Vetoes May Set Up Showdown with General Assembly

With only minutes to spare before the beginning of the new fiscal year, Gov. John Kasich signed House Bill 49, the state’s biennial budget bill, just before midnight on Friday, June 30. However, he did so only after using his line-item veto powers to strike 47 separate provisions from the bill.

Unfortunately, two items the Ohio Chamber had requested he veto were not among the 47: the provision that eliminates the important taxpayer right to make a direct appeal to the Ohio Supreme Court from a decision of the Board of Tax Appeals, and the provision that allows up to two percent of the Bureau of Workers’ Compensation and Industrial Commission budgets to be transferred to the General Revenue Fund.

Further, one of the 47 was a veto of a provision supported by the Ohio Chamber, which would have clarified that sales of automatic data processing, computer services, electronic information services, and electronic publishing services are not taxable under the sales tax when they are being provided primarily to deliver, receive, or use another, nontaxable service.

Beyond these three items, most of the focus of the governor’s vetoes surrounded the General Assembly’s work on Medicaid – with the legislature’s plan to freeze Medicaid expansion enrollment in 2018. Lawmakers said this was necessary in order to give the state time to evaluate any changes Congress and Pres. Donald Trump may make to the Affordable Care Act (ACA). However, the governor said it violates federal law requiring a single state agency to administer the program by taking away a portion of the state Medicaid director’s authority and giving it to the legislature. The truth is that this is really a fight about the merits of Medicaid expansion itself.

This fight isn’t necessarily over yet, either. Many lawmakers and Medicaid expansion opponents are calling on the legislature to override the governor’s veto. The House has session scheduled for Thursday, July 6, and it is possible that a vote to override will occur. Whether it does will depend on if at least 60 of the 66 Republican members would vote to override. All 33 Democrats are expected to support the governor’s veto, but the constitution requires a three-fifths majority of the House in order to override. House Republicans are meeting later today to determine if they have the votes.

The Ohio Chamber supported Medicaid expansion in 2013 as long as the federal government continues to provide the levels of funding promised in the ACA. It has, so we are urging lawmakers to sustain the governor’s veto.

The House is also considering attempts to override several of the governor’s other vetoes, including his veto of a provision that requires the Medicaid director to ask the federal Centers for Medicare & Medicaid Services (CMS) whether the state can increase its health insuring corporation franchise fee to generate an additional $207 million for local governments. If it were to be approved by CMS and subsequently implemented, it could increase the costs of HMO plans that many employers use to provide health care coverage to their employees. For this reason, the Ohio Chamber is urging lawmakers to sustain the governor’s veto of this provision, as well.

Should the House successfully override any of the governor’s 47 vetoes, the Senate would then have to take the same action in order to actually overturn any of them. The Senate has a session tentatively set for next Wednesday, July 12.