WASHINGTON -- A gargantuan tax cut for property taxpayers across upstate New York came one small step closer to reality Thursday as Senate Republicans revealed a health care reform bill that includes a provision that bars the state from charging upstate counties for a share of the cost of Medicaid.
The inclusion of the provision in the Senate bill counts as one of Rep. Chris Collins' greatest political victories in his five years in Congress. Collins, R-Clarence, sponsored the amendment calling for the tax change in the House version of the health bill, along with Rep. John Faso, R-Kinderhook.
“This is important and welcome news for New Yorkers that the Senate leaders have recognized the burdens placed upon taxpayers for far too long and included our amendment to force Albany to end its unfunded mandate on New York’s counties once and for all," Collins said. "We are on track to ending the Obamacare nightmare and I am pleased with the progress made today to bring vital reforms and the largest property tax reduction ever enacted to Western New York.”
That property tax reduction is by no means certain. Republican Senate leaders remain short of the votes they need to pass their health bill, and even if they do, it's unclear the Senate and House then could reach a compromise on the legislation.
And even if they did, any major local tax break would not take effect until 2020 -- and Erie County Executive Mark C. Poloncarz predicted it might not happen at all.
Given that the Collins-Faso amendment would blow a $2.3 billion annual hole in the state budget, Poloncarz said the state might make up for the loss by simply shifting other costs onto the counties. For example, the state could force counties to pay more for local schools or community colleges.
Court action could also block the amendment, Poloncarz said.
"I have a hard time believing this will be in effect by 2020," he said. "I think it's highly doubtful."
In the short run, though, the inclusion of the Collins-Faso proposal in the Senate bill means that if the Republican-controlled Congress can agree on a health bill, it will almost certainly block the state from paying for its Medicaid program the way it has for decades.
New York counties currently pay 13 percent of the costs for Medicaid, the state-federal health care plan for the poor and lower middle class. Shifting those Medicaid costs onto the state would eliminate the largest driver of county property taxes.
“To put that in perspective, 95 percent of every dime taxpayers pay in county property taxes has gone to cover a bill that was always supposed to be paid for by the state," said Erie County Comptroller Stefan I. Mychajliw. "This amendment relieves us of that back-breaking burden. It gives us the opportunity to invest that money more wisely and return the majority of it back to taxpayers."
The Collins-Faso amendment would save Erie County more than $150 million annually, and Mychajliw suggested that 75 percent of the savings be turned into a property tax cut, with the remaining 25 percent to be used to improve the county's infrastructure.
But Poloncarz and other Democrats stressed that making such plans now would be premature for several reasons.
First, four Republican senators said Thursday that they oppose the larger health care bill that includes the Collins-Faso amendment, meaning the legislation is short of the votes it needs to pass. And changing the bill to satisfy those conservative senators who oppose the bill might push some more moderate Republicans into opposing it.
"I think the Senate bill was prepared to fail," said Rep. Brian Higgins, D-Buffalo. "I think the Republicans felt an obligation to give it a try. But I don't think the math made any sense from day one."
Even if the health care bill passes and the House and Senate eventually reach a compromise version, New York Gov. Andrew M. Cuomo has vowed to do everything he can to stop the Collins-Faso amendment.
Cuomo lashed out at the GOP health care bill Thursday, saying: "By keeping the reckless Collins-Faso Amendment, this bill targets New York and threatens to slash an additional $2.3 billion in Medicaid funding for the state, leading to devastating cuts to our hospitals, nursing homes, and home care providers."
As far back as March, Cuomo vowed to wage a court battle if the Collins-Faso amendment were to make it into law. That's because the provision targets New York State and New York State only, allowing other states to continue charging counties for a share of Medicaid costs.
Cuomo said the Collins-Faso amendment is unconstitutional because it unfairly harms one state, and without any federal purpose.
“There is no justification for why you target New York,” the governor said in a conference call with reporters in March.
Poloncarz agreed, saying: "I don't think it will pass constitutional muster."
But Faso called Cuomo wrong to be fighting the amendment.
"Governor Cuomo’s false and hysterical charges about this provision are unfortunate," said Faso, who won election to Congress last year in part by promising to find a way to end the county Medicaid mandate. "Rather than false claims, Mr. Cuomo should start preparing to reform his Medicaid program and finally take full responsibility for the program, as governors in the other states are already doing,”
Meantime, Senate Minority Leader Charles E. Schumer of New York -- who will lead the Democrats' fight to try to kill the GOP health bill -- stressed that the Collins-Faso amendment is only one part of a much larger measure that includes deeper Medicaid cuts than the House health bill.
"The Collins-Faso amendment is nothing more than rearranging deck chairs on the Titanic," Schumer said. "It does nothing to stop this heartless bill from hurting New Yorkers who need health care most.”
Supporters of the Collins-Faso amendment, however, said that it rights a longtime wrong. For decades, New York has charged its counties far more for Medicaid than has any other state. And Rep. Tom Reed, R-Corning, said it's time for that to stop.
"Albany cannot be allowed to force its share of Medicaid onto the backs of county taxpayers," said Reed, who thanked Collins and Faso for their efforts. "Residents are fleeing the state because we have some of the highest property taxes in the country. Relief for hardworking New Yorkers is long overdue."