Property taxes are killing upstate New York. While people and jobs flee, upstate districts such as mine in the Hudson Valley and Catskills are paying their hefty tabs with a shrinking tax base. What’s driving these local costs and the statewide brain drain? To a great extent it’s Medicaid.
At $63 billion, New York’s program is currently one of the nation’s most expensive. While very few states impose a local-government share of Medicaid, New York’s creative financing scheme makes us unique.
Since the days of Gov. Nelson Rockefeller in 1966, Albany’s elites have required county taxpayers to cover a mammoth share of the state’s overall costs. That drives up local property taxes and pushes out the people and jobs that grow our economy.
Today, annual local-government spending on Medicaid accounts for $9 billion nationwide; $7.2 billion of that total, or 80 percent, is paid by local taxpayers here in the Empire State.
I ran for Congress by pledging to fix Rocky’s 51-year-old mistake and cut taxes. I kept my word, and this week Rep. Chris Collins (R-Buffalo) and I introduced an amendment to the House Republicans’ American Health Care Act that would save county taxpayers $2.3 billion and give Albany 2½ years to modernize its Medicaid program.
Here’s how it works: Ditch New York’s Medicaid mandate starting in 2020. That would give Albany number-crunchers 2½ years to budget for an additional $2.3 billion – the counties’ share of Medicaid costs outside New York City. That’s just 1.5 percent of New York state’s $152 billion budget.
A similar county phaseout was proposed by none other than Gov. Mario Cuomo early in his tenure. Gov. Andrew Cuomo should do what other governors across the nation do and have the state assume this financial burden.
Instead, the governor falsely threatens hospitals and health care providers with cuts. On Wednesday, he called for raising income taxes on the middle class by a whopping 26 percent. (Thursday, he threatened to sue.) Meanwhile, my plan would cut property taxes an average of $360 a year for upstate homeowners and businesses.
Cuomo prefers the high-spending status quo to reform, and he bullies anyone who gets in his way. Instead of looking to cut the corporate welfare he doles out by the billions, Cuomo wails that he can’t reduce his budget by 1.5 percent to lower property taxes.
New York’s sky-high property taxes are already crushing homeowners and driving up the cost of doing business here. According to the nonpartisan Tax Foundation, New York has the heaviest state and local tax burden in the country.
That’s why the Faso-Collins plan has received such high marks. County leaders across the state have lined up behind the Medicaid mandate-relief plan. They all understand that the Faso-Collins amendment is the best shot at finally ending New York’s habit of paying for Medicaid out of homeowner property taxes.
Recently, a constituent of mine, a local restaurant owner in Ulster County, explained that his property tax bill was simply too high and he would soon have to close the family business if nothing was done.
Albany has been talking about cutting property taxes for decades – and getting incomplete results. With the Faso-Collins amendment incorporated into the House’s ObamaCare replacement legislation, we have an opportunity to fix a 51-year-old mistake. The time is now.