On Monday, Oct. 3, I appeared at a press conference to support a new bill being introduced in the New York State Legislature by Senators McDonald and Gallivan and Assemblymember Paulin to reform how Medicaid is funded. Currently, New York State forces the county governments to pay half of the state’s share for Medicaid. The Medicaid formula is supposed to be split equally between the state and federal government, and New York is the only state in the union that forces the county governments to split its share.
I was a speaker at the press conference, and thanked the state legislators for introducing the bill and coming to Westchester—a county where $211 million of your county tax dollars were sent to Albany this year due to this flawed funding scheme. These legislators are demonstrating real leadership for the taxpayers of New York.
Medicaid is known as the “mother of all unfunded state mandates” and must be reformed. The state treats the county governments like an ATM—we must collect tax dollars from residents, and then ship the money directly to Albany for the unfunded mandate, without even providing the counties with any flexibility to make changes to the Medicaid program. I am shocked every year when we do the county budget and see this massive amount of money that we must send to Albanyjust for Medicaid.
In my comments, I told the state legislators that we supported them and that the Republican and Democratic county legislators in Westchester are willing to load up a bus and go to Albany to lobby for this excellent bill. Below is the press release from yesterday’s event
The New York State Legislature
Assemblywoman Paulin Leads Bipartisan Effort to Reform Medicaid’s Cost Structure - Legislation Will Eliminate Unfunded Mandate, Provide Property Tax Relief
Assemblywoman Amy Paulin (D -Westchester) was joined by State Senator Suzi Oppenheimer (D – 37 S.D), County Legislator Jim Maisano (R-New Rochelle) and County Legislator Sheila Marcotte (R- New Rochelle) Monday, to announce bipartisan legislation (A.8644/S.5889B) that will structurally reform the cost administration of New York State’s Medicaid system by incrementally transferring full responsibility for funding the nearly-$53 billion program to the State — gradually eliminating the local share traditionally paid by county governments.
The proposal initially freezes local Medicaid costs, providing $180 million in immediate local savings. The proposal will eliminate the automatic three percent annual spending increase currently required by statute. Starting in the fourth quarter of 2012, the local share would then be reduced by five percent, providing counties with an additional $75 million — totaling $255 million in savings for county governments.
Between 2013 and 2019, local Medicaid costs will continue to be gradually reduced as the state assumes an increasing share of the burden. The end result would completely eliminate Medicaid costs from county budgets, providing municipal governments with the flexibility to substantially reduce local property taxes.
Under New York’s current Medicaid structure, the program is funded by state and local governments, with matching funds provided by the federal government. Medicaid costs mandated by the state represent the largest item in nearly every county’s budget: on average, Medicaid accounts for 40-45 percent of an individual county’s local property tax levy.
In Westchester County, property owners pay the highest real estate taxes in the United States.“Without comprehensive changes to the cost structure of Medicaid, county governments are going to be faced with extremely regrettable choices. The tax cap will only work as intended to address the property tax burden in New York State if we provide the corresponding mandate relief on local budgets,” said Assemblywoman Amy Paulin. “This proposal will permit local governments to control taxes, while ensuring they are able to continue providing the essential services working families rely on.”
Local Medicaid costs are expected to increase $2.6 billion by 2025 if nothing is done to provide county governments with some form of Medicaid mandate relief. Absent passing this legislation Medicaid will cost local property taxpayers $10 billion.
Paulin noted that her district’s proximity to communities in Connecticut makes Westchester County’s real estate taxes critical in maintaining residents as citizens of New York. “At some point,” she said, “a five-figure property tax bill – which is what roughly half of Westchester County residents are paying right now – could cause even loyal New Yorkers to consider relocating.”
County Legislator Jim Maisano stated, ”Clearly, for county governments trying to balance budgets while facing issues like the rising costs of mandates and constituents crying out for property tax reductions, we need relief from the State of New York. This legislation will allow us to reduce county property taxes while protecting essential services. I hope the legislation passes very soon.”
Senator Suzi Oppenheimer (D – 37 S.D.) added, “I have long supported a state takeover of Medicaid costs, the largest unfunded mandate placed on the property tax. Local governments must be given the means to reduce their costs and lower the property tax burden. I co-sponsored this proposal because it provides real relief for taxpayers in the form of a freeze on increases now and a phased-in assumption of Medicaid costs by the state. I salute Assemblywoman Paulin’s leadership in sponsoring this bill.”
Paulin was also insistent that this legislation in no way precludes the Legislature or Governor Cuomo from continuing to identify and eliminate burdensome unfunded or underfunded mandates aside from Medicaid.
By calling for an initial spending freeze coupled with a multi-year transition of the local share of Medicaid costs, the legislation intentionally allows the Governor, the Legislature and the State Department of Health a reasonable period of time to prepare and adjust the program to ensure that New York State’s Medicaid program is compliant with the new healthcare provisions and state mandates contained in the federal Affordable Care Act, enacted in 2010.