April 5, 2016

Faso's Reform Plan to Cut Property Taxes

Federal Plan Would Remove Albany's Medicaid Burden on Local Taxpayers

Kinderhook, NY — April 5, 2016 … Citing New York's outrageous property taxes as a major cause of Upstate's economic decline, Congressional candidate John Faso (R-Kinderhook) today announced that, if elected, he will introduce legislation amending federal law (42 USC 1396a)to eliminate a state's ability to impose a local government share of Medicaid costs. Among the 50 states, New York requires a disproportionate share of Medicaid costs to be borne by county governments and the City of New York.  In fact, New York localities pay more Medicaid costs – $7.5 billion in SFY 2013-14 – than local governments in the other 49 states combined. 

In releasing his plan, Faso – who as a member of the Assembly cut spending and championed proposals that led to real balanced budgets – called it a smart way to reduce costs, increase efficiencies and align New York with most other states in the nation that don't pass their Medicaid expenses down to county taxpayers.

"Property taxes are killing New Yorkers. Federal law allows states to impose a portion of the state share of Medicaid costs on local governments. New York State imposes the highest burden in the nation on property taxpayers for support of Medicaid. It's wrong and my proposed legislation will result in major reductions in county property taxes throughout the state. In the 19th Congressional District, property taxpayers – both residential and commercial – paid approximately $224 million in 2015 in Medicaid expenses. High property taxes also depress home values and adversely affect business location decisions.

"When people wonder why their property taxes are so high compared to other states, the mandated local share of Medicaid is a primary reason," said Faso. "My proposal will fix this problem and force Albany to finally reform its Medicaid system while allowing significant property tax cuts for homeowners. We can't continue to require homeowners to shoulder costs which the state should be paying."

New York State has the largest Medicaid program in the nation. New York with approximately 8% of the nation's population, is responsible for around 15% of total national Medicaid spending. The state spends more than $54 billion on the health care program for the poor, which exceeds total spending in the states of Florida and Texas combined, according to the Kaiser Family Foundation. While some other states require localities to foot a small part of the Medicaid bill, local governments in New York State pay more in Medicaid costs than localities in the other 49 states combined.

Because the local share of Medicaid is mandated by Albany, state government has adopted the most generous program in the nation without being responsible for footing the entire non-federal share of the Medicaid system. Dutchess County, for example, is expected to spend nearly 40 percent of its $106.7 million property tax levy on Medicaid in 2016. Other counties in the 19th district pay remarkably high percentages as well: In 2015, roughly 95 percent of Otsego County's tax levy went to cover its Medicaid costs; over half of Rensselaer's levy consisted of Medicaid payments and in Schoharie County it approached 28 percent.

As proposed by Faso, the plan would be phased in over a five-year period affording state government the opportunity to plan for a full takeover of local Medicaid costs. New York should also be given additional program flexibility to allow it to absorb local costs.

"If the burden of Medicaid were lifted off the backs of our county property taxpayers we could cut every homeowner and businesses' property taxes by 54%," said Rensselaer County Executive Kathy Jimino. "Unfortunately our state leaders have refused to do what the majority of other states do and pay for their own share of the Medicaid bill. By making this a legislative priority, John Faso, who has long been known as a creative and innovative legislator, demonstrates his commitment to providing meaningful relief to the taxpayers of this state.  John provides exactly the type of thinking we need in Washington to bring about the tax relief our families and businesses need and deserve."

"John Faso's idea would finally end the inequitable system – in place for 50 years since the Rockefeller Administration – which has county governments and the City of New York paying for a local share of Medicaid benefits mandated by Albany," said William Cherry, Schoharie County Treasurer. "It is high time this system ended and the Faso plan is an ingenious approach to solve a problem which has long burdened county taxpayers.  County governments have to raise the taxes to pay for a program that is controlled by state government in Albany. The Faso plan fixes this unfair situation."

County	2015 Tax Levy	2015 Medicaid Expenses	Percent of Taxes
Dutchess	$106.7 million	$41.7 million	39 percent
Otsego	$11.3 million	$10.3 million	91 percent
Schoharie	$20 million	$5.6 million	28 percent
Greene	$23.2 million	$9.5 million	41 percent
Ulster	$77.9 million	$35.3 million	45 percent
Sullivan	$57 million	$19.9 million	35 percent
Columbia	$41.2 million	$10.8 million	26 percent
Delaware	$29.7 million	$8.4 million	28 percent
Montgomery	$27.3 million	$11.8 million	43 percent
Rensselaer	$61.2 million	$33.3 million	54 percent
Broome	$70 million	$37.4 million	53 percent
Total	$525.5 million	$224 million	42 percent

Faso is running to fill the seat now held by Congressman Chris Gibson (R), who is not seeking re-election. As a member of the New York Assembly, Faso developed and pushed proposals that led to real balanced budgets – including the first reduction in state spending in decades while closing a $5 billion deficit. He championed legislation that made a difference for tens of thousands of families such as the STAR program and education and real property tax reform. A former board member of the Rockefeller Institute of Government, Faso also served for three years as a member of the Control Board that worked to fix the financial and managerial issues of the City of Buffalo and its school system.

Mr. Faso and his wife, Mary Frances, a registered nurse, are the proud parents of two children. They have lived in Kinderhook, New York, for more than three decades.

John Faso (R-Kinderhook) is former Republican leader of the state Assembly and candidate for Congress in the 19th Congressional district. To learn more about Faso, visit johnfaso.com.

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