Medicaid Costs Could Significantly Drive Up Taxes Imposed by Counties

ALBANY – County property tax levies will increase by nearly one-third by the end of this decade if the cost of the Medicaid program isn’t checked, the state comptroller, Alan Hevesi, projected yesterday.Echoing the warnings of county executives, Mr. Hevesi said property taxes would rise by an average of 6.5% a year to allow counties to pay for their share of the Medicaid program.Mr. Hevesi said Wyoming and Delaware counties could face annual tax-levy increases averaging 17% and Rockland and Otsego counties could see average 12% annual tax-levy increases.“Although last year’s Family Health Plus takeover offered some relief, Medicaid costs are still a major burden for county government in New York State,” the Democratic comptroller said.The Legislature and Governor Pataki agreed in 2004 to have the state pick up half of localities’ share of the Family Health Plus program for working poor adults in 2005 and the entire local portion starting in 2006. That will be worth $201.5 million to local taxpayers this year and $403 million a year starting in 2006.A. Douglas Berwanger, chairman of the Board of Supervisors in Wyoming County in western New York, said yesterday his county’s Medicaid bill has increased to $7.5 million this year from $2.5 million in 1998. With only about 45,000 residents, the county is struggling to generate the resources to meet double-digit increases.A road reconstruction and paving initiative is one of the local programs that was curtailed as Medicaid costs have mounted, he said.“All the votes, all the population, and all the power are based in New York City and Albany,” Mr. Berwanger said. “Basically, we get the crumbs off the table … It’s difficult and some days, it becomes depressing.”County executives are pushing to have their share of the Medicaid program capped at 2003 levels and, ultimately, for the state to take over the counties’ portion of the program. A cap would save counties $600 million a year, or about 10% of the overall share of the Medicaid program that they and New York City pay.Mr. Pataki and the state Legislature do not dispute Medicaid costs are rising too fast or that counties are getting caught in a squeeze. County officials complain about having to cut back on services for all residents to pay for Medicaid cost increases.Medicaid consumed 73% of the amount generated by the 57 counties outside New York City in 2003 through property tax levies, Mr. Hevesi said.The other major source of revenues for counties is the sales tax. Most counties have increased their sales taxes by at least a percentage point in recent years, to 4% or more. That is in addition to the 4% the state charges.County Medicaid costs more than doubled to $2.3 billion in 2003 from $1.1 billion in 1993, an average increase of 8.6%.Albany County Executive Michael Breslin said Mr. Hevesi’s property tax increase projections for his county – averaging 9.8% over the rest of the decade – seemed a little low to him.“This is an obligation that is passed onto real taxpayers,” said Mr. Breslin. “It is the most regressive tax for retirees, seniors, and those on a fixed income.”Mr. Breslin said the state may not insist on real cost-savings in the Medicaid program until it assumes the local government share in New York. Counties and New York City pay about 20% of the overall cost of Medicaid in New York, with the state picking up just over 30% and the federal government the other half.“If this whole Medicaid program is going to continue to grow, the state should be the one responsible and accountable for paying for all of it,” Mr. Breslin said. “Then they are more likely to pay for real reform.”Also yesterday, the state Conference of Mayors called on the state Legislature to force counties to share sales tax revenues with cities within their borders. The executive director of the conference, Edward Farrell, said many cities are at or near their constitutional property taxing limits and need a portion of the locally generated sales tax to help improve their finances.

Medicaid Costs Could Significantly Drive Up Taxes Imposed by Counties

Medicaid Costs Could Significantly Drive Up Taxes Imposed by Counties

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