Senator Farley Joins Governor Pataki, Nys Association Of Counties In Annoucing Savings To Capital Region County Taxpers Under New Medicaid Cap

Hugh T. Farley

August 25, 2005

State Senator Hugh T. Farley (R,C - Schenectady), Governor George E. Pataki and the New York State Association of Counties (NYSAC) announced county-by-county budget savings under the first two years of the State’s historic cap and takeover of the local share of the Medicaid program.

Under the new Medicaid cap counties and New York City will realize a cumulative total of $6.5 billion in savings over the next five years, beginning in 2006.

The substantial Medicaid savings data, provided this week to assist counties in crafting their 2006 fiscal year budgets -- will allow dozens of counties to limit their spending growth and provide taxpayers with significant property tax relief this year.

"We proposed and fought to enact this new cap so that we could provide real and immediate relief from escalating Medicaid costs to Capital Region property taxpayers," Governor Pataki said. "Today, we’re proud to announce county-by-county estimates of billions of dollars in savings that taxpayers will see as a result of our efforts."

"This new measure dramatically reforms what was one of the fastest growing fiscal responsibilities for New York’s property taxpayers and local governments and reverses that trend by capping the local share and providing counties with significant and immediate relief," the Governor added. "We’re confident that the resulting savings will allow counties to construct soundly-balanced budgets that restrain spending growth and reduce property taxes."

Savings by county includes:

* Albany - - $1.2 million in 05-06, $6.4 million in 06-07

* Fulton - - $320,614 in 05-06, $1.67 million in 06-07

* Montgomery - - $285,101 in 05-06, $1.48 million in 06-07

* Rensselaer - - $532,795 in 05-06, $2.76 million in 06-07

* Saratoga - - $692,608 in 05-06, $3.62 million in 06-07

* Schenectady - - $470,866 in 05-06, $2.44 million in 06-07

* Schoharie - - $115,177 in 05-06, $599,438 in 06-07

* Ulster - - $380,840 in 05-06, $1.97 million in 06-07

* Warren - - $385,610 in 05-06, $2.02 million in 06-07

* Washington - - $232,319 in 05-06, $1.21 million in 06-07

The projected savings includes more than $113 million across the State in 2005-06. In 2006-07, total savings are projected to reach $590 million. The attached county-by-county breakdown shows the projected local Medicaid cap and the associated savings for both 2005-06 and 2006-07.

The Legislature enacted Governor Pataki’s proposal to cap local Medicaid costs virtually unchanged in this year’s final State Budget. The Governor worked closely with Legislative leaders and the New York State Association of Counties (NYSAC) to ensure its speedy and successful approval.

Rocco J. Di Verononica, President of the New York State Association of Counties, said, "This historic law represents years of effort by county officials and is an important turning point in the state-county partnership. The law brings to counties an unprecedented level of stability and predictability that will benefit county taxpayers for years to come."

This new law not only caps Medicaid costs, saving counties $6.5 billion over five years, but also provides an additional one-time savings to counties of more than $500 million by alleviating the need for local governments to budget for accrued liabilities relating to Medicaid costs. Counties outside of New York City are estimated to receive a one-time cash infusion of more than $90 million from this accounting change.

Additionally, the New York State Department of Health has been working cooperatively with counties to develop and implement further cost savings through demonstration projects. These new projects are designed to reduce Medicaid costs and improve the delivery of health care in a cost effective manner. The county will be eligible to share in these savings.

Specifically, the new law enacted by Governor Pataki and the Legislature:

* Phases in the Medicaid cap over three years based on the county’s 2005 Medicaid spending levels.

* Establishes a cap of 3.5 percent beginning in State fiscal year 2005-06, 3.25 percent in 2006-07, 3 percent in 2007-08.

The final budget also provides $25 million in additional support to counties outside of New York City - - where the property tax burden has had the most negative affect - - by accelerating the State takeover of local Family Health Plus costs from January 1, 2006 to October 1, 2005.

The new Medicaid reform plan will be fully implemented in 2008 when counties will have a permanent Medicaid cap not to exceed 3 percent annually. Passage of a number of Medicaid reform proposals advanced by the Governor and enacted by the State Legislature earlier this year have allowed the State to assume a greater share of the costs.