COLUMBUS, Ohio (AP) _ Ohio hospitals are bracing for a new state fee that begins Monday.

The move comes as many hospitals are cutting jobs and medical services amid the recession.

The new franchise fee is expected to raise $718 million to help balance the state budget.

The fee is based on part of operating expenses at each hospital and will be paid over two years.

Federal money will help offset the cost because hospitals will be partially reimbursed with higher Medicaid payments.

But hospitals will still take a hit.

A survey released this week by the Ohio Hospital Association found that half the state's hospitals have laid off workers.

The cuts are more evident in rural areas.

Pike Community Hospital in southern Ohio cut 15 positions, or 5 percent of it's staff, and gave remaining workers a 7.5 percent pay cut.

(Copyright 2009 by The Associated Press. All Rights Reserved.)