January 14, 2005
Council: Report on threat of Medicaid-driven county tax hikes intensifies need for Medicaid reform in Albany
County property taxes would have to increase by an average of almost one-third by 2010 if Medicaid costs continue to rise at the current rate, according to a new brief from state Comptroller Alan Hevesi.
“Medicaid costs are pushing already high local property
taxes even higher. Although last year’s Family Health
Plus takeover offered some relief, Medicaid costs are still
a major burden for
county governments in New York State. In 2003, Medicaid alone amounted to 19 percent of county spending and equaled 73 percent of property taxes. Preliminary numbers indicate those shares continue to grow,” Hevesi said.
"Comptroller Hevesi's report adds urgency and insight on the need for Medicaid reform this year," said Business Council Vice President Ed Reinfurt, who has personal responsibility for the Council's Medicaid advocacy. "This will be a major test of whether legislators in 2005 will bring home the results that really matter to their businesses, taxpayers, and communities."
From 2004 to 2005, Medicaid costs are expected to increase 8.6 percent, a major factor in the 5.9 percent increase in total county spending that resulted in a 4.5 percent increase in property taxes, the Comptroller’s release said. .
The research brief analyzed the growth in Medicaid costs and total spending for counties since 1993, and projected future costs if current trends continue. Its finding include:
- County Medicaid costs more than doubled from $1.1 billion
in 1993 to $2.3 billion in 2003, an average annual increase
of 8.6 percent, according to county financial data reported
to the Comptroller’s Office. General Fund county spending
increased an average of 4.7 percent during that period.
- If Medicaid costs continue their historical rate of growth,
from 2005 to 2010 costs would increase by $151 million in
Nassau County, $115 million in Suffolk, $70 million in Monroe,
$67 million in Erie, and $54 million in Westchester.
- While the projected average annual increase in overall
county property taxes would be 6.5 percent a year for five
years, for some counties it could be substantially higher.
For example, Wyoming and Delaware counties could face 17
percent annual increases, while property taxes in Rockland
and Otsego counties could increase by 12 percent annually.
- Five counties could not afford to use property taxes alone
to pay for the projected increase because, under this scenario,
the rise in Medicaid costs would push taxes over their current
tax margin: Allegany, Chenango, Cortland, Fulton and Montgomery.
- For 11 counties, the projected increase in Medicaid costs could consume half or more of their remaining tax margins: Broome, Chautauqua, Chemung, Delaware, Jefferson, Livingston, Orleans, Steuben, Washington, Wayne and Wyoming.