One of the most costly state mandates for local government is the Medicaid program. Counties pay for 25 percent of the cost of acute-care services and 9 percent of the cost of long-term care services, according to the New York State Association of Counties. In Fulton County, the 2012 Medicaid bill will be $13.8 million, which is about 50 percent of the property-tax levy.
This year, New York's counties will pay more than $7.1 billion for Medicaid, or about 13 percent of total expenditures, which are projected to be $53 billion.
The state's newly imposed tax-levy cap on localities has created even greater challenges for counties, which are now responsible for 3 percent annual growth in the Medicaid program while tax revenues are allowed to grow only about 2 percent.
Counties have been complaining about Medicaid costs for years, and state government leaders are well aware of the burden the program places on property taxpayers. This year, Gov. Andrew Cuomo is trying to do something about the problem. In his proposed state budget for 2012-13, he's calling for the state to provide some relief. The budget proposes to gradually take over growth in the local share of Medicaid costs. In 2013-14, local government Medicaid growth would be reduced to 2 percent, then reduced by an additional 1 percent annually over the subsequent two years. In 2015, counties' and New York City's Medicaid expenses no longer would grow. The takeover of the growth costs would save counties and New York City $1.2 billion over five years.
The proposal certainly would be an improvement, but it fails to go far enough. About two dozen states require no local funding for Medicaid. Of the 27 other states that require a local contribution, most force localities to pay only for administrative costs, a small portion of specific services or some other minimal contribution, according to the state Association of Counties.
If New York were serious about providing Medicaid relief, it would phase out the entire local share of the cost. This would lead to lower property taxes and improve the administration of the Medicaid program. Such a change would solve many of the financial problems facing localities. Of course, the state, in turn, would have to find ways to cut costs and save money as it picks up billions in Medicaid expenses.
Don't let state officials tell you it's impossible. Other states manage to do it. It's time for New York to get serious about Medicaid relief.