Seward Hails Medicaid Takeover

James L. Seward

February 02, 2006

Counties throughout the state have been able to hold the line and even reduce property taxes as a result of Medicaid reform and accountability measures proposed by the senate and enacted in the 2005 state budget, State Senator James L. Seward noted today. Seward applauded county officials for passing along $190 million in Medicaid savings to overburdened property taxpayers.

In Seward's district, the Medicaid cap and assumption of the Family Health Plus program account for an estimated savings to counties of $15 million this year.

"New York's overburdened, hardworking taxpayers pay far too much in taxes," Seward said. "That’s why the senate proposed a Medicaid cap, Family Health Plus takeover and accountability measures as critical first steps in reining in wild Medicaid spending. With our reforms, county governments no longer need pass rising Medicaid costs along to property taxpayers.

"This year we will continue the fight by cracking down on Medicaid cheats who are stealing tens of billions of dollars from hard working taxpayers every year," added Seward. He said the state can drive additional major savings into the pockets of taxpayers by cracking down on fraud and abuse.

Seward said the senate majority property tax reduction plan, released earlier this month, is another step in the Senate’s commitment to reducing property taxes. The 25 point plan would provide more than $2.4 billion in school and municipal property tax relief over the next three years, including direct rebate checks to property taxpayers, expanding the STAR program and the property tax circuit breaker, and encouraging consolidation of local government services.

"Property tax reduction is our number one priority this year, and we will fight to ensure that Medicaid fraud and government waste does not take money out of the pockets of hard working New York families," said Seward. "Local officials recognize the burden excessive taxes place on homeowners and small businesses and I know they will work with us to enact creative solutions, like consolidation and sharing services, in an effort to protect taxpayers who are paying too much."

The current state budget includes a state assumption of local Medicaid costs, beginning with the takeover of costs that exceed an annual growth rate, set as follows: 3.5 percent in 2006, 3.25 percent in 2007 and 3 percent in subsequent years. To help fund the Medicaid takeover, counties remit a set level of local revenues to the state and are subject to new accountability standards aimed at checking excessive local spending growth. The cap and accountability standards will save taxpayers $6.4 billion over five years.

Additionally, last year’s budget included an accelerated state takeover of the local share of the Family Health Plus Program for counties outside of New York City that will save taxpayers $2.5 billion over five years. Under the senate plan, the state began assuming all local costs for the Family Health Plus Program on October 1, 2006.

Together, the Medicaid cap, accountability measures and state takeover of the local share of the Family Health Plus program, will save local taxpayers a cumulative total of almost $9 billion over five years as the plan is phased in.

The statewide rate of spending growth in county budgets was more than halved, to 3.3 percent from the average annual increase of 7 percent from 2001-2005.

According to a research brief with county-by-county budget and tax data issued by Comptroller Alan Hevesi, more than three-quarters of the counties (48 out of 57) had 2006 property tax levy increases below their individual five year growth trends.