Editorial for Times Union
Gov. Andrew Cuomo says property taxes are too high. State lawmakers, particularly Republicans, say the state’s mandates on local governments are too onerous. Well, here’s something they can all do: Take over Medicaid.
Property taxpayers in New York pay for about 15 percent of the state’s Medicaid costs, for no reason, really, than the reluctance of state officials to pay the full share. And the bill only gets worse the poorer a county is.
It’s an utterly regressive system, and one the state could fix with a stroke of pen. If, that is, the governor and lawmakers had the will to take responsibility for their rhetoric.
A governor who local government efficiency-through-consolidation must know that the one thing counties can do little if anything about is the Medicaid tab that the state sticks them with. The federal government pays for half of Medicaid; New York is responsible for the other half. But rather than pay its full share, it makes counties pay more than $8 billion a year.
This hurts poorer counties the most because, simply, they have more people eligible for Medicaid. So they have three hits against them –— bigger Medicaid bills, relatively fewer people to pay for the program, and less overall wealth to pay the tab with.
The state has taken some steps to relive counties, including a plan to take over Medicaid’s administrative costs by 2016. But that represents only 1 percent to 6 percent of the program, according to various estimates.
The state also capped annual increases in counties’ Medicaid expenses at 3 percent. But with counties dealing with a 2 percent cap -— state-mandated, of course — on tax levy increases, it’s a losing game over time. Today, for example, Albany County finds that most of its tax levy is going to pay for Medicaid.
Other states do it better. A 2011 survey by the Citizens Budget Commission in New York City found that 27 states require no local share at all. Those that have a local share are all in the single-digit percentages, and some require only a share of certain things, like administrative services or mental health costs.
The solution to this inequity is for the state to take over the cost of Medicaid. For Mr. Cuomo, it would be ultimate government consolidation, with all the efficiencies he can draw from it. For Republicans, it would mean the end of one of the biggest state mandates there is.
But how to pay for it? The state would no doubt have to raise income taxes. But that’s a far more progressive system, based more on people’s ability to pay, than property tax.
We realize that’s a lot to ask from a governor who wants election year tax cuts, and a Legislature that’s happier railing about mandates than actually doing something about them. But this is one of the most significant things state government could do to give property tax payers a break — bigger than the governor’s temporary property tax freeze, bigger than all the vague talk of local consolidation.
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