Cattaraugus County shoppers will help absorb the brunt of increased Medicaid costs with a sales tax of 9 percent, an increase of .75 of a percentage point, beginning in 2005 if the State Legislature agrees to the County Legislature's latest bid to increase the tax.
The legislators met in Little Valley for a brief special session Tuesday, passing the measure, 15-4, in an attempt to stave off some of the local share of federally mandated Medicaid costs, which are projected to climb about $1.7 million in 2005 for a total county share of $15.65 million.
A similar attempt to raise the sales tax failed last week by a single vote.
The tax hike will not bring much revenue to the county in 2005 because the ratification procedure takes some time. State lawmakers must favor the proposal and then draft legislation that is adopted after the County Legislature repeats the two-thirds majority vote. Annual sales tax revenues of $5.76 million could be added to the county's coffers once the hike is finalized.
An amended bill, referring to a projected $1.6 million operating deficit in the county's nursing homes because of the loss of 2005 intergovernmental transfer revenues, was not put to a vote. Several legislators argued against the sales tax hike, noting nearby Pennsylvania's sales taxes are luring shoppers. They urged stepped-up lobbying in Albany to curb the local government share of Medicaid costs and requested a delay to fully review the proposed 2005 budget.
"I think this is premature. This is sending the message that we'll take on the burden, but a good portion (of county residents) are low income," said Linda L. Witte, D-Olean, pledging to oppose the hike.
Another opponent, Kenneth W. "Bucky" McClune, D-Salamanca, argued for a temporary belt-tightening to pressure Albany and reluctantly suggested a property tax hike, warning legislators will be sorry after increasing sales taxes.
He pointed to about $1.4 million in revenue not factored into the budget picture, including the county's share of Casino money, questioning the rush in advance of a complete analysis of the 2005 budget package.
"Nothing troubles me more than what we're doing here today," McClune said.
Paul J. Schafer, R-Olean, who voted to support the tax increase, said he supports an increase in the state income tax and reminded legislators that Pennsylvania's sales taxes are lower because clothing is exempt.
"We have a gun to our heads. All of us agree the whole thing lies with the state," Schafer said.
Following the special meeting, legislators made some adjustments to preliminary draft department budgets, completing a series of committee meetings with department heads on the tentative plan, which calls for appropriations topping $171 million. Nursing Homes Director Thomas Schobert said the proposal is precarious and asked that legislators reconsider staff cuts and additions to avoid affecting patient care, for a net spending decrease of $57,621.
The Senior Services Committee agreed to incorporate his request for a series of spending reductions and the elimination of the day nursing supervisor position, to be balanced with the restoration of a head nurse and administrator's secretary positions that had been slated for deletion. Among other cuts to the preliminary budget were $10,250 from Suburban Adult Services and $141,240 from various line items earmarked for purchase of new Sheriff's vehicles. Additions include $10,000 to the Cattaraugus County and Olean Municipal Airport, and $6,000 to the Critical Incident Stress Management Team.
All the plan's components were sent to the Finance Committee for a final review scheduled for 6 p.m. Monday.
As the plan now stands, the proposed increase in the tax levy has been trimmed a fraction of a percentage point to 16.59 percent.