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Counties fear Medicaid shift will trigger grim decisions

Joe Mahoney, CNHI State Reporter
Posted 2/17/23

Local governments leaders told lawmakers Wednesday a Hochul administration plan to redirect hundreds of millions of Medicaid dollars to the state will force counties to make a tough choice.

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Counties fear Medicaid shift will trigger grim decisions


ALBANY — Local governments leaders told lawmakers Wednesday a Hochul administration plan to redirect hundreds of millions of Medicaid dollars to the state will force counties to make a tough choice: Slash public services or boost property taxes.

“Cutting services or raising taxes are the two things that local governments don’t want to do,” Stephen Acquario, executive director of the New York State Association of Counties (NYSAC), advised members of a legislative budget committee.

The proposal initiated by Gov. Kathy Hochul would cause county governments across the state to collectively lose more than $600 million in Medicaid funding they had been expecting in the coming fiscal year, with the funding shift beginning in less than seven weeks.

Acquario appeared to make headway with two of the most influential lawmakers in budget matters — Sen. Liz Krueger, D-Manhattan, chair of the Senate Finance Committee, and Sen. Tom O’Mara, R-Big Flats, the GOP ranker on that same panel.

“I’m with you on this,” Krueger told Acquario after he detailed a scenario county leaders are now dreading.

Acquario voiced frustration that county governments have been forced to confront the new proposal after enduring earlier battles dating back to at least 2005 on the same issue.

“This is devolving Into the old days of property taxpayers paying more and more for Medicaid,” he said. “We thought we were beyond this.”

Acquario said he and his staff had worked with Sen. Charles E. Schumer, D-N.Y., on the federal Medicaid legislation that he said was intended to spare counties from shouldering more than their share of the responsibility for Medicaid expenditures.

In addition to facing an estimated loss of $625 million in the year ahead, Acquario said the state owes the counties $1.2 billion in payments withheld over the past seven years, noting “the state never reconciled the difference” in funding the counties had been banking on.

The Hochul budget proposal involves a plan for the state to keep 100% of the enhanced Federal Medicaid Assistance Percentage that has been going to the localities.

According to NYSAC’s breakdown of the impacts of the funding shift on individual counties, Niagara County would lose nearly $5.8 million in the coming year.

Otsego County would lose more than $1.3 million in Medicaid funding, while Delaware County would take a $1.1 million hit, with Schoharie County losing nearly $730,000 and Chenango County left with a hole of nearly $1.3 million. Clinton County would lose more than $2.2 million, with Essex County losing some $880,000 and Franklin County out nearly $1.3 million.

In his comments immediately following the governor’s release of the proposed executive budget, Oneida County Executive Anthony J. Picente Jr. condemned the proposed spending plan, saying, “Governor Hochul’s budget proposal will absolutely decimate local governments by hijacking $1 billion of federal funds meant to help us offset Medicaid costs. This incomprehensible decision to pocket our Enhanced Federal Medical Assistance Program (eFMAP) money will cost the taxpayers of Oneida County more than $7.6 million and completely flies in the face of the intention of the Affordable Care Act.”  

New York City Mayor Eric Adams also sounded off against the proposal, saying it amounted to “undoing one of the more important Medicaid reforms in recent history.”

Acquario argued that embracing the Hochul plan would have ominous consequences.

“It’s a dangerous thing to be doing right now,” he said. “We have so many things that we’re trying to face in an affordability crisis. It’s unimaginable that we’re even speaking about counties paying more for Medicaid” in the coming year.

On another fiscal front, O’Mara said he agreed with the counties’ opposition to a proposal that would require the local governments to pick up the tab for what is expected to be a very expensive increase in the hourly rates paid to lawyers assigned to represent indigent individuals in legal matters.

Said Acquario: “It’s outrageous that local governments are being asked to provide counsel for the poor. It’s a federal constitutional responsibility of the state.”

Legislative leaders will be meeting with representatives of the governor’s staff in an effort to hammer out compromises on the spending blueprint over the next six weeks.

Another Hochul proposal that has stirred up concerns involves her proposal to expand the availability of affordable housing. Some local governments have given it a frosty reception, maintaining it would weaken the ability of communities to set their own zoning standards.

Peter Baynes, the executive director of the Conference of Mayors, told lawmakers the Hochul administration, in promoting the governor’s plan, has sought to justify the proposal by indicating similar affordable housing plans have been advanced in six other states”

As for the plan’s potential to yield more affordable housing in New York, Baynes added: “I don’t think the way it’s written right now, necessarily, we would drive affordable housing.”

The Conference of Mayors, which represents city as well as village governments, is also asking lawmakers to create a new $100 million municipal operational aid program that would be allocated to local governments on a per capita basis “as a means of supporting affordability and public safety at the local level,” Baynes said in his testimony.


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