Many property owners in New York saw smaller tax increases than in previous years in part because of last year's cap on county Medicaid costs, state Comptroller Alan Hevesi said in a new report.
The cap, passed last March by lawmakers, makes the state responsible for any growth in the plan exceeding 3.5 percent in 2006; 3.25 percent in 2007; and 3 percent in the following years. The Comptroller's office estimated that the Medicaid program cost counties $190 million less because of the 2005 cap. Forty-eight out of the 57 counties included in the Comptroller's study showed increases below the previous five years.
“Last year, the Legislature and Governor took an important step towards reducing the heavy financial burden Medicaid has placed on counties, and our analysis shows that their actions are having positive results,” Hevesi said. “The Medicaid cap introduced a much-needed element of predictability in Medicaid spending and is helping moderate property tax growth. This is a positive development for county governments, but it is clear that this moderation in growth is dependent upon continued implementation of the cap.”
The Business Council, along with the New York Association of Counties and many state chambers of commerce, had lobbied intensively for the cap in 2005. The Council held rallies around the state with many county leaders and chamber executives, urging Albany to give Medicaid relief to counties and taxpayers.
"For 2006, property taxes for counties overall increased by an average of 3.3 percent compared to an average annual increase of 7.0 percent from 2001 to 2005," a release from the Comptroller's office said.
"Without the cap, counties would have seen their property taxes grow by another $190 million to nearly $4.3 billion, or 4.7 percent higher than actual 2006 property tax levies," the release said. "Instead, statewide property tax levies total $4.1 billion."
More on the report is available at www.osc.state.ny.us/press/releases/jan06/013106.htm.