Via Albany Times-Union
In 1965 President Johnson and Congress enacted the federal-state Medicaid program to provide health care for the poor. Soon after, New York Governor Nelson Rockefeller adopted the program but made a critical mistake which has haunted property taxpayers for over 50 years. The mistake was to impose half of the state’s share of Medicaid on county governments and New York City.
In typical New York fashion, Medicaid was especially generous. Albany’s generosity was made easier because the counties – and their property taxpayers – were required to foot half of the local cost. This arrangement has greatly contributed to the astronomical cost of Medicaid in New York. With eight percent of the nation’s population, our program now accounts for 15 percent of total nationwide spending.
Albany’s cost shift can be explained another way. Imagine if you could lease a $500 luxury car knowing that you could afford the payments because you could make someone else pay $200 of the monthly cost? Well, that is just what state government has been doing to counties for 50 years – passing along Medicaid costs to residential and business property taxpayers. The result? Property values drop and business investment in job-creating enterprises is discouraged.
Despite capping cost increases in recent years, local governments in New York spend more on Medicaid than localities in the other 49 states combined. While federal law permits such cost-sharing, only New York has taken it to such extremes.
This cost-sharing with counties is a major reason why county property taxes are so high in New York. For instance, Rensselaer County in 2015 devoted 54 percent of its entire $61.2 million property tax levy to the program. In Otsego County, over 90 percent of their county property tax goes to foot the Medicaid bill. This is killing county property taxpayers across our state and it is time we fix it. Unfortunately, fixing Medicaid financing is not on Governor Cuomo’s agenda.
Since Albany won’t act, Congress should. Federal law should be amended to eliminate the local government share of Medicaid within a five-year period. This change would largely affect only the Empire State and it should also be given additional program flexibility to reform its program and absorb local costs over a five-year period.
Upstate New York continues to lose population and jobs as people flee to other states. According to Census figures, 38 of the 50 Upstate counties lost population between 2000 and 2014. For all the happy talk and taxpayer-funded TV commercials announcing New York’s economic recovery, the reality of people voting with their feet tells a different story.
If we are going to truly reverse Upstate New York’s decline, we must cut property taxes. Getting the Medicaid burden off the backs of residential and business property taxpayers is necessary to lower the cost of living here. Fixing Governor Rockefeller’s 50-year-old mistake is a critical step in correcting what ails Upstate New York.
John Faso 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.