This past year marked the start of a long-awaited change of course for New York State. Items that had once proved elusive spending cuts, tax cuts, a property tax cap, SUNY 2020, ethics reform -- were one after another signed into law. However, any successes must be put into perspective with the challenges that remain, particularly for New York State's counties and property taxpayers.
Capping property taxes, a landmark first step toward addressing New York State's high property tax burden, will work as designed only when coupled with comprehensive and extensive mandate relief for local governments.
Without such relief, county governments saddled with millions in state-mandated expenses and restrained by the tax cap are left with few options.
Gov. Andrew M. Cuomo has been adamant about the need for comprehensive mandate relief, but to date his appointed Mandate Relief Redesign Team has largely ignored the big ticket items. Specifically, that means Medicaid, a $50-billion-per-year program whose local cost obligations represent the largest unfunded mandate for every county in the state.
On average, Medicaid consumes 45 percent of an individual county's local property tax levy. In Erie County, Medicaid's burden ($204 million in 2010) accounts for a staggering 94 percent. This single mandated cost is a fundamental cause for high property taxes here and across the state.
In September, I introduced legislation to gradually reduce and eventually eliminate Medicaid's local burden by having the state incrementally assume the entirety of Medicaid's costs over eight years. This cost realignment will enable counties to live within the strictures of the tax cap, avert steep cuts to local services and reduce property taxes -- not merely limit their growth.
This legislation does not contemplate the need for any additional tax increases to pay for the state's increased Medicaid costs. It relies on reforms developed by the governor's Medicaid Redesign Team, increased revenues and savings opportunities created by the federal Affordable Care Act and administrative savings gained through consolidations. The Medicaid Redesign Team has already identified savings in excess of $2 billion and more are being developed for this coming budget year and beyond.
Since September, more than 100 state and local elected officials, Democrats and Republicans, from across New York have signaled their support for this proposal. It has received the backing of the New York State Association of Counties, the New York State Association of County Executives and numerous county governments.
When considering the accomplishments of 2011, mandate and Medicaid relief is the next necessary step toward continued progress in 2012.
Patrick M. Gallivan represents the 59th District in the State Senate and is chairman of the Social Services Committee.