The Greater New York Hospital Association and the 1199 Service Employees International Union are gearing up to launch a television campaign attacking Governor Pataki for trying to contain the costs of Medicaid in New York. “Emergency rooms will be shut down,” one commercial warns. “Children will lose their health care. It means life-saving equipment for seniors – gone.” Albany’s stinginess has already closed “dozens” of hospitals and nursing homes across the state, an ominous voiceover cautions. “Yours may be next.”

If that’s the case, we shudder to think what health care must be like for residents of the other 49 states – each of which spends substantially less on Medicaid than New York. In fact, New York shells out more in Medicaid expenses than California and Texas combined. But scare tactics have always been an effective tool of the state’s health-care lobby. Now, however, the special-interest groups face growing opposition from local leaders across the state. Elected officials and business leaders gathered in Utica on Wednesday to call attention to the crisis faced in counties across the state because of escalating Medicaid costs.

“Medicaid is literally killing us. It is literally killing county governments,” said the county executive of Erie County, Joel Giambra, according to the Evening Times. Medicaid expenses recently forced Erie County to lay off 2,000 employees and cut public programs. “Counties across the state are going to experience the same meltdown,” Mr. Giambra warned. The worst part is that it’s beyond their control, since the rising costs are imposed on county governments by Albany. Only 11% of county spending in Erie County is discretionary, Mr. Giambra said. “The people’s revolution is going to prevail because we’re mad as hell and we’re not going to take it anymore,” he thundered to the crowd.

“Medicaid is stripping all of our budgets,” the administrator of Herkimer County, James Wallace, said at the rally, according to the Herkimer Evening Telegram. “Property taxes have not kept pace with Medicaid and we face even higher costs ahead if we don’t cap local spending this year.” The executive director of the Chemung County Chamber of Commerce, Kevin Keeley, says, according to the Corning Leader: “It is suffocating us. It is driving business out of the state.”

“We can’t take it in Nassau,” the executive of Nassau County, Thomas Suozzi, said of property tax hikes. “We can’t take it anywhere.” Mr. Suozzi’s office is circulating a petition among county residents to demand cost-saving measures from the state. “Spiraling Medicaid costs are placing an unfair burden on our Community,” the petition reads. “In Nassau County Medicaid costs have increased by 53% in the past five years. This growth rate is unsustainable and a threat to the financial wellbeing of the County and its residents.” Medicaid costs Nassau County twice as much as the county collects in general fund property taxes.

On the same day as the rally, March 2, three legislative committees in Greene County passed a resolution urging the governor and the state legislature to cap local Medicaid costs. “The continuing increases in the amount this county, as well as every other county in New York State, must fund for Medicaid impacts the budget, services, and programs of every county department,” the chairman of the county legislature, Frank Stabile Jr., told the local Daily Freeman newspaper. Greene County’s Medicaid bill has risen above $10 million in 2005 from $7.3 million just three years ago, Mr. Stabile said.

On Thursday, March 3, the executive of Orange County, Edward Diana, delivered his State of the County address. “This year, for the first time in Orange County history, every single dollar of property tax that we collect from our residents is used to pay for mandated Medicaid and Social Services programs,” Mr. Diana told county lawmakers. “Two-thirds of our annual budget now goes to pay for unfunded state and federal mandates. Nearly every dime of the increase in spending in this year’s budget will be used to pay for unfunded mandates.”

Also last week, on March 1, Oneida County’s new 9.75% sales tax kicked in – making Oneida’s sales tax the highest in New York. County legislators say they had to raise the sales tax to cover the growing costs of Medicaid. Some Oneida residents, according to the Associated Press, plan to spend their shopping dollars in neighboring counties where the sales taxes are lower.

In Allegany County, the legislature’s Ways and Means Committee recently started receiving a biweekly report to keep track of the county’s Medicaid expenses. After just seven weeks, the county’s Medicaid bill was almost $1.6 million. Given the numbers, Allegany County may need to budget an additional $1.5 million over initial cost projections. “The whole program was set up to fight poverty, but it will end up making poverty among all of us,” the chairman of the legislature, James Palmer, told the Times Herald on Friday.

Monroe County has seen its Medicaid costs rise to $151 million this year – double what it was a decade ago. In Broome County, Medicaid expenditures have increased at the same rate, rising $10.9 million, or 53%, over the past five years.

The concerns of local leaders echo a 2004 report by Moody’s Investor Service, which argued that New York’s counties face financial trouble and negative rating outlooks because of “the high percentage of non-discretionary expenditures, which include expanding costs of local Medicaid share, employee wages, and health benefits, and pension contributions.”

County leaders called for reform when that report was released as well. “The ability of counties to continue to provide basic services and meet their financial obligations is seriously jeopardized unless Albany acts in the upcoming legislative session to reform Medicaid and reduce its impact on county property taxpayers,” the executive of Onondaga County, Nicholas Pirro, said last fall.

“The case for Medicaid reform has been made by county governments throughout the state,” the county executive of Westchester, Andrew Spano, said at the time. “In Westchester, the year-to-year growth of Medicaid is fast outpacing the county’s ability to pay.”

New York State’s local taxes are 72% above the national average. It runs the most expensive Medicaid program in the nation. New York’s total spending on Medicaid exceeds the entire budgets of 42 other states combined, according to the state budget director, John Cape, in a recent letter to the Press and Sun-Bulletin.

With all the problems New York’s bloated Medicaid program has caused, why won’t Albany fix it? Mr. Giambra, of Erie County, has one answer. The SEIU health workers union recently placed a full-page ad in the Buffalo News targeting Mr. Giambra. “Obviously we’re going to be under attack by special interest groups that are causing the problem,” the county executive told reporters last week. “Last year, one union alone, SEIU, distributed $11 million in campaign contributions. So that’s the reason you can’t get change in Albany.”

Even Mr. Pataki, now pushing some modest Medicaid reforms, has been known for election-year deal-making with 1199 SEIU. The governor expanded Medicaid to cover more workers in 2000, and he expanded Medicaid again in 2002 to subsidize pay increases for hospital and nursing-home employees.

But this year New York’s Medicaid crisis has reached a boiling point. Even the heath-care lobby’s hold over its members is beginning to crack. Last month, Buffalo’s largest health-care system, Kaleida Health, withdrew from the Healthcare Association of New York State because of the lobbying group’s “unequivocal opposition” – as the chief executive of Kaleida Health, William McGuire, put it – to Mr. Pataki’s proposal to appoint a commission to evaluate underutilized hospitals and nursing homes and make recommendations about restructuring the healthcare industry.

“Kaleida Health believes this type of commission is necessary in order to avoid the huge Medicaid cuts and provider taxes that have been proposed in the 2005-06 New York State Executive Budget,” Mr. McGuire wrote in a letter to the president of HANYS, Daniel Sisto. “In the long term, Kaleida Health believes the commission could help right size the state’s hospital system in a fashion that not only preserves access to care for every community, but also leads to lower health care costs, including Medicaid costs.”

New York’s heath-care lobby, fat and bloated from state subsidies, can’t hope to keep siphoning more-and-more tax dollars from communities across the state. New Yorkers are already mad as hell. At some point, they won’t be able to take it anymore.