Counties Call On State Lawmakers To Reject Governor’s Medicaid Cost Shift To Local Taxpayers

County leaders today are calling on their state representatives in the Senate and Assembly to adopt one house budgets that reject Governor Kathy Hochul's proposal to shift $625 million in new costs to counties for the State's Medicaid program. 

According to the Governor's Budget proposal, the state will keep $625 million in federal Medicaid assistance that had been shared with counties since the Affordable Care Act (ACA) was enacted in 2011. The four-year impact is projected to be $3 billion in shifted costs to local taxpayers as follows: 

$624 million – SFY 2024 
$709 million – SFY 2025 
$774 million – SFY 2026 
$808 million – SFY 2027 

Congress provided that a portion of this enhanced Federal Medicaid Assistance Percentage (FMAP) be shared with local governments who pay a share of a state's Medicaid program. In New York, counties contribute $7.6 billion each year to the state's Medicaid Program, more than all other counties in the nation combined. 

“We are asking our partners in the State Senate and Assembly to reject the Governor's proposed cost shift when they pass their one house spending plans. This cost shift is unnecessary, unprecedented, unhelpful, and unaffordable for New York homeowners, renters, and businesses,” said NYSAC President Michael E. Zurlo. “If this plan is allowed to take effect in April, it will blow a $625 million hole in the budgets of counties and New York City, putting services like road paving and Meals-on-Wheels at risk, and marking the beginning of the end of New York's property tax cap.”

The Governor's cost shift to local taxpayers is unnecessary.
This year's budget deposits $5.5 billion in the State's reserves, two years ahead of schedule, while blowing up local budgets mid-year. The SFY 2023-24 budget also projects a state general fund surplus of $36 billion by year end. The State has the funds at their disposal, they don't need to take this money from counties and local taxpayers. 

The Governor's cost shift is unprecedented.
No other budget action has this large of a negative economic impact on any level of government or entity. Also, since 2003, every enhanced Federal Medicaid Assistance Percentage (eFMAP) has been shared proportionally with county's who are required to pay $7.6 billion in local tax dollars to the State's Medicaid program – to leverage the Federal match for the program.

The Governor's cost shift is unhelpful in efforts to reign in property taxes.
The State's Medicaid cap was designed to help counties lower the impact that county Medicaid costs have on local property taxes. Prior to the Medicaid cap, county property taxes were rising more than 10 percent annually. Since the cap, counties have kept their property tax increases to lower than 2 percent on average. 

The Governor's cost shift is unaffordable.
Over the course of the ten years, the Governor's proposed cost shift will cost county and New York City taxpayers an additional $6.25 billion. 

“At the end of the day, county leaders and state legislators all work for the same constituents—the residents of New York–and we're grateful for those lawmakers that have stood with counties in trying to protect those constituents from a cost shift that will make life less affordable for them,” said NYSAC Executive Director Stephen Acquario. “We all want to pass a budget that strengthens the programs and services that New Yorkers depend on, but doing so by raiding the coffers of the local governments who actually provide the bulk of those services is the wrong way to go."