Senator Flanagan Announces That Medicaid Reform Leads To Millions In Property Tax Relief

John J. Flanagan

February 03, 2006

Senator John Flanagan (2nd Senate District) recently announced the positive effects of the New York State Medicaid cap implemented by the Senate last year. A report issued by the Office of the New York State Comptroller stated that the cap resulted in $190 million in property tax relief across the state. Over the next five years, it is estimated that the plan will save Suffolk County homeowners over $280 million.

"Homeowners across Suffolk County deserve relief from local property taxes and this report shows that the Medicaid cap has been effective in achieving this goal. The benefits of this program will continue to grow in the coming years to relieve the local property tax burden and to provide needed relief to Suffolk County," stated Senator Flanagan.

According to the report from the Comptroller’s office, county property tax increases across the state rose at half the rate they averaged over the previous five years. In Suffolk County, due in part to the state’s Medicaid cap,property taxes increased by approximately half the amount they averaged over the previous five years.

The 2.3% tax increase was also less than the average statewide increase of 3.3%. It is estimated by the Comptroller’s office that the cap will save Suffolk County taxpayers $22 million dollars in 2006. The report also stated that without the state funded cap, county tax rates would have to increase by a an average of 33% by the year 2010 to keep pace with the current rate of Medicaid growth.

Under the plan, the cap will be phased in based on a county’s 2005 Medicaid spending levels. This year’s cap was 3.5%. That level will reduced to 3.25% in the following year and to 3% in all subsequent years. Estimates have stated that the Medicaid cap will save Suffolk County residents more than $27 million in 2006-2007, $52 million in 2007-2008, $82 million in 2008-2009 and over $115 million in 2009-2010. The total estimated savings for Suffolk County homeowners are expected to exceed $280 million over the next five years and over $352 million when combined with the state takeover of the Family Health Plus program.

In December, to further the property tax relief effort, Senator Flanagan announced a 25-point plan that would deliver an estimated $2.4 billion in school and local property tax relief over the next three years. The centerpiece of this package is the REBATE NY plan that is an expansion of the successful STAR program.

Unlike STAR, REBATE NY would deliver tax refunds directly to homeowners in the form of a rebate check. This money would be in addition to a homeowner's current STAR benefit.

The plan would be phased in and would be based on a homeowners STAR benefits. In 2006, the rebate would equal 30% of the homeowners STAR savings for the 2005-06 school year, with the benefit ratio rising to 50% in 2007 and 75% when fully phased in 2008. The yearly average rebate checks to Suffolk County residents would be among the largest in the state:
Annual Average Check for Average Annual Check for
Basic STAR Recipient Enhanced STAR Recipient
2006-07$291 $444
2007-08 $485 $740
2008-09 $728 $1,100

"This plan will build upon the proven success of the Medicaid cap and deliver real property tax relief directly to Suffolk County homeowners. The job is to build on that property tax relief, root out Medicaid fraud, fight for New York State’s share of federal Medicaid funding and continue to deliver for the homeowners of Long Island," added Senator Flanagan. "Taxpayers in this area have been paying their fair share and the state must continue to deliver."