This is typical state thinking.
Spend money at a record pace while making no attempt whatsoever to control spending or cut taxes. Then to get more revenue, take money away from local governments and force them to raise their taxes instead.
One of Gov. Kathy Hochul’s budget proposals involves shifting 100% of Federal Medical Assistance Percentage (FMAP) funds in the Medicaid program to the state and away from county governments, which administer Medicaid.
The fight over the local share of Medicaid reimbursements goes back at least two decades. So if you’re a longtime county official, you’ve been down this road before. And now you’re about to go down it again.
If the governor’s proposal is included in the state budget, due on April 1, it will cost New York counties collectively $625 million in the upcoming fiscal year – $345 million in New York City and $280 million for counties outside the city.
The impact of this new proposal will have a compounding effect, costing local taxpayers more than $2.5 billion over the next three years, according to testimony provided to the state Legislature by the New York Association of Counties (NYSAC).
According to NYSAC’s county-by-county breakdown of the impact of the funding shift, Schenectady County would lose about $4.4 million next year; Albany County, $8.1 million; Saratoga County, $3.1 million; Fulton County, $1.8 million; Montgomery County, $1.5 million and Schoharie County, $730,000.
The sudden loss of revenue could force counties to either raise taxes or cut local services to make up the difference.
Because the state caps how much local governments and school districts can increase local property taxes in a given year (The cap this year is 2%.), county officials will either have to approve exceeding that cap or cut local services to stay within it.
The governor, meanwhile, proposed a second consecutive record state budget, $227 billion this year, that allows her to take credit for helping local governments — including a record level of state aid to school districts — without taking the political hit for raising state taxes or making drastic state spending cuts.
Instead, she says, school districts should have enough money, thanks to the state, and should be cutting their own taxes.
We’re no apologists for excessive spending at any level of government. State, county and local governments and school districts should always be looking at ways to provide necessary services at the lowest cost to taxpayers.
But high inflation and the lingering impacts of the pandemic have lately made it more difficult for local governments to provide those services without jacking up local property taxes.
The last thing the state should be doing is taking money out of their budgets for itself, while forcing local governments alone to make the tough decisions on whether to cut spending or raise taxes.