Why Counties in NY Pay More for Medicaid

We had two guest speakers in my Public Affairs - Local Government Class. The First was Syracuse Mayor Matt Driscoll, followed by Onondaga County Chief Fiscal Officer Joe Mareane.

Many interesting topics were discussed, but one in particular was helpful in understanding the financial troubles of New York State Counties. All New Yorkers know that the State's Medicaid program needs to be reformed and causes huge budget problems for local governments each year.

Mareane explained in simple terms what the problem is. When the federal government created the Medicaid program, they told the states that they must provide a basic list of services to their residents (and pay for them). In addition, the states were offered a list of additional optional services they could pick and choose from, and again, pay for.

Every state except New York offered the basic services, declined most of the optional ones, and used state revenue to pay for most or all of the Medicaid program. New York had other ideas. Instead, Albany decided it would share half of the cost of its Medicaid program with county governments. So, because Albany was essentially getting a 50% discount on services compared to other states, it enrolled in all of the optional services as well.

The result is that county governments, especially those in Upstate NY, are crippled under the financial burden of the NY State's ridiculously large and expensive Medicare program. According to budget documents at ongov.net, Onondaga County's 2008 budget is $1.1 billion - with $92 million going to the state for Medicaid, an increase of about $2 million from last year.

Former Onondaga County Executive Nick Pirro (who teaches the class) says that these costs and others have created such high taxes in NY that businesses don't want to come here. That's also why 9 out of the 10 counties in the US with the highest property tax rate are in NY (Onondaga is 7th, Monroe is 3rd). This information is in a preliminary report from the New York State Commission on Property Tax Relief, of which Pirro is a member (he handed out bound copies of the report in class - so I have one and will have more information specifically on that in the future.

This is a serious issues that state leaders need to address. Citizens must continue to put pressure on lawmakers in Albany to lower the tax burden and make NY a desirable and attractive place to do business. This is the only way that upstate cities will be able to fully recover from the loss of manufacturing jobs.