Thu October 11, 2012
Struggling Counties Want Some Rules Eased
New York’s counties are making a push to get Governor Cuomo and state lawmakers to take their growing fiscal crisis seriously, and let them off the hook for some state mandates that they say are bringing some counties to the brink of bankruptcy.
Steve Acquario, with the New York Association of counties, says his lobby and advocacy group has already begun researching laws governing municipal bankruptcies, in case struggling counties in New York have need of guidance. But he says he hopes it would be a last resort.
“Yes we can declare bankruptcy.” Acquario said. “But it’s a drastic measure, what is that telling the people of New York? That we can’t run our government? It’s a terrible situation.”
Counties say they are squeezed between the recently enacted 2% property tax cap and state rules that they say they’re running out of money to fund. Acquario says the data shows a “very serious” widening gap between the money that counties take in in revenue, largely from property taxes, and the cost of state mandated programs. That difference will reach $4.2 billion dollars annually by the end of the decade.
“ We call it a jaws chart,” he said.
One county, Cortland County in Central New York, is almost at its constitutional taxing limit, several counties are under a state run financial control board, and others are spending down their reserves at an alarming rate.
Acquario says the largest mandate that accounts for much of the counties’ budgets is the requirement that counties pay for 25% of the state’s $54 billion dollars in annual Medicaid costs. The federal government pays just over half, and the state pays for the other quarter, but Acquario says federal and state government have greater resources to come up with the money, like an income tax and other taxes and fees. He says counties have to rely on just the property tax and a “narrow band” of taxpayers to fund a vast health care program. He says it’s “absurd” and no longer sustainable.
Governor Cuomo and the legislature have already taken over all county Medicaid expenses that rise above 3% each year, but have not agreed to take over all of the $7.5 billion dollars in costs to counties and New York City. Acquario suggests that perhaps a take over could be done in phases, with the state paying for long term care costs first. He says nearly $3 billion dollars in savings expected from the federal Affordable Health Care Act, also known as Obamacare, could help pay for the partial takeover.
The counties also believe a waiver request sought by the Governor’s Medicaid Redesign Team from the federal government could also bring in more funds. And they urge Cuomo’s Medicaid overhaul panel to look at reducing some benefits, as well, to more closely match what’s offered in the private sector.
The counties would also like to get out of an obligation to pay for almost half of the costs of pre school education for disabled children. Acquario says school districts should pay those costs instead. He says if schools were responsible for the expenses, they might find ways to save money in the program.
Acquario has an answer for people whose eyes glaze over when they hear the term mandate relief.
“Look at their tax bill,” he said. “If they’re flat, they’re fortunate.”
Without help from the state, he expects 20% of all counties to exceed the tax cap in the budgets they are now putting together. If 60% of a county’s legislators agree to raise taxes beyond the 2% limit, then the property tax cap can be overridden.
County leaders are also taking other steps to reduce costs, like privatizing the running of nursing homes, or selling them outright. They are also laying off workers.
Governor Cuomo appointed a task force to try to provide some relief from mandates. It was due to issue a report last June, but missed that deadline and has not set a new date to report.
The counties have issued a report outlining the mandate changes they'd like to see implemented .