Local officials still split on health amendment

JOHNSTOWN — As the House vote on the American Health Care Act, goes into its second day, federal, state and local officials remain spilt on an amendment to the bill that would change how New York collects its Medicaid dollars.

On March 21, an amendment was added to the American Health Care Act by New York Congressmen Chris Collins, R-Buffalo, and John Faso, R-Kinderhook. Faso represents the 19th District, which includes part of Montgomery County.

The Medicaid Local Share Limitation proposal — also known as the Collins-Faso amendment — would remove the obligation of the state’s counties to pay for the cost of Medicaid.

The current structure sees the federal government pay 51 percent of the cost, the counties 13 percent and the state the remainder.

Faso said counties in the 19th District paid more than $224 million in property taxes to support the Medicaid payment in 2015.

“High property taxes are crushing upstate homeowners and businesses. Medicaid costs passed on from Albany are the primary driver of these taxes,” Faso said. “This policy, which I’ve described as the single-worst mistake from the Rockefeller era, has burdened homeowners and small businesses for decades and helps give New York State the lamentable record of having some of the highest property taxes in the nation and the worst retention rates for people and jobs over the last decade. Enactment of this reform, which is contained in the American Health Care Act, would eliminate over $2.2 billion in county property taxpayer costs on a statewide basis starting in 2020.”

Gov. Andrew Cuomo has come out strongly against both the Republican bill and the Collins-Faso amendment. Cuomo states that the amendment could have a major impact on the state’s healthcare system.

“Life has options, and the hard reality is that Collins and Faso are leaving New York state with only two unacceptable choices. Either, we could pass on the devastating cuts to our hospitals, nursing homes and the 40 percent of New Yorkers who currently receive Medicaid and health benefits. Or, we would be forced to raise state income taxes – either by increasing taxes on all New Yorkers by 10 percent, or if Collins and Faso have their way in protecting only the wealthy, on the middle class by 26 percent. Any tax increase flies in the face of New York’s success in reducing spending and taxes to record lows.”

Congresswoman Elise Stefanik, R-Willsboro, whose 21st District includes Fulton and Hamilton counties, has come out in support of the amendment.

“Counties across my district and across New York are being unfairly subjected to massive financial liabilities being imposed by the state that can have severe impact on our local property taxes,” said Stefanik in a news release. “This amendment would make New York State take responsibility for their own budgeting, freeing up needed funds at the county level for local governments to use in our communities. I thank my colleagues in the New York delegation for their work on this important issue and will continue to work in Congress to serve the needs of my district.”

Lt. Gov. Kathleen Hochul, a Democrat, said the Collins-Faso amendment represents a “$2.3 billion political IOU.”

“Local county taxes or state taxes New Yorkers still pay. One way or another, it is still coming out of New York taxpayers’ pockets,” Hochul said. “Let Mr. Collins help New York state and his district by having the federal government pay – that is why he is in Washington.”

Local officials

Fulton County Administrative Officer Jon Stead said the idea behind Collins-Faso seems like a logical one, since 48 other states do not have their counties pay a share of Medicaid costs.

“It sort of seems to us to be a great thing. It breaks this gridlock that has existed for many years where the state imposes this large share of Medicaid costs on property taxpayers,” Stead said.

He said small- to medium-sized upstate counties can see Medicaid be upwards of 50 percent of the tax levy.

“In Fulton County, it’s just about 51 percent of our tax levy,” Stead said. “Every dollar a property taxpayer pays, 50 cents of that dollar is for the local share of Medicaid.”

Stead said counties have proposed many times a phased-in state takeover of the local share in the past that would make New York similar to other states.

“A phased-in seven- to 10-year takeover would be very fair to both parties and it would make the most sense,” Stead said.

G. Michael Kinowski, chairman of the Fulton County Board of Supervisors said in a statement via Stefanik’s office that: “I am writing regarding federal legislation sponsored by the New York State Congressional delegation that would remove the giant burden of Medicaid costs from property taxpayers in the state. The Board of Supervisors strongly supports the legislation to halt the NYS Medicaid Mandate.”

“This legislation, if enacted, will simultaneously reduce county property taxes by 50 percent and unleash an unprecedented economic revival all across New York state. It is definitely a step in the right direction and I commend you for your forthright efforts to get it enacted,” Kinowski said in his statement.

Stead said he doesn’t believe property taxes are a good way to fund a program such as Medicaid. He said income tax may be a fairer way to pay for such a program, since it is based on income level. He said in some cases, a farmer may be paying more than a condo owner who has a great deal more income.

“People with the least ability to pay are sometimes paying the highest portion,” Stead said.

Stead said if this were to go through, the change could have a major impact on the county. He said that if the state did not react strongly and shift some other costs onto the counties, tax bills could decrease substantially.

“It would probably cut a person’s county tax bill in half,” Stead said.

He said there could be economic advantages as well, since local governments potentially could have more funds available for infrastructure and public safety projects.

Stead said other counties could see even larger cuts based on their current Medicaid portion.

He said he has heard comments that the state’s reaction if the amendment goes through may be to alter the state’s sales tax collection formula.

“The Medicaid burden has been growing exponentially over a period time,”Stead said. “The state did cap it a few years ago. But it still froze it at over $14 million a year in the counties local share.”

Montgomery County Executive Matthew Ossenfort said the amendment would force the state to consider how it will fund Medicaid.

“[The proposal] is bringing to light an issue that will likely never be addressed the way its being addressed now on the federal level,” Ossenfort said.

Ossenfort said since both counties pay some of the higher percentages of Medicaid dollars per taxpayer, this could help the counties lower their tax burden.

Ossenfort said he does not have an opinion either way on the broader health care bill.

“I’m just trying to do my best to stay informed on the process,” Ossenfort said.

The Empire Center for Public Policy recently came out with a report on the idea of the state taking over the local share of Medicaid cost.

The report listed Fulton County as third and Montgomery County fifth in Medicaid payments as a percentage of the combined property taxes.

Stead said he is not surprised to see Fulton County as third on the Empire Center’s list.

“It’s a huge impediment on economic growth in Upstate New York,” Stead said.

Ossenfort said he was not surprised Montgomery County was so high on the list. He said that the state has taken some steps to address cost issues, such as capping costs of Medicaid, but the Medicaid costs still have a huge impact on upstate counties.

“Likely, if it is not included, we will continue down a long and arduous path, one where counties like Fulton and Montgomery will continue to bear a very heavy burden when it comes to medicaid costs,” he said.

The healthcare industry has a totally different outlook, since Cuomo has stated the state can’t afford to cover any more of the Medicaid burden. That extra amount will be passed along to hospitals and nursing homes and other healthcare providers.

Nathan Littauer Hospital and Nursing Home President and CEO Laurence E. Kelly spent Monday at the New York State Capitpl with Cuomo in his chamber.

“While locally this may seem positive, the Governor told me, in his office Monday, that this is an unacceptable and unsustainable burden for the state; and, unfortunately, would result in the state having no other choice but to reduce payments to Medicaid providers by as much as 25 percent,” Kelly said in a statement released Wednesday. According to a news release from Cuomo’s office, Nathan Littauer Hospital would lose around $1.6 million in funding if the proposal were to be included in a passed bill.

Kelly went on to explain that Medicaid providers in Fulton County include Nathan Littauer Hospital, many physicians and dentists, every nursing home and many social service organizations. Nathan Littauer Hospital and Nursing Home and its Primary/Specialty Care Centers, alone, could lose reimbursements totaling up to $5 million per year.

According to Littauer, Some Fulton County organizations would probably be in jeopardy of closing.

Kerry Minor can be reached at [email protected]

By Chad Fleck

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