Collins-Faso had merit

| The Leader-Herald

One tantalizing idea emerged during the debate over repealing “Obamacare” — the Collins-Faso amendment to the now-pulled American Health Care Act.

The proposal, written by U.S. Rep. John Faso, R-Kinderhook, who represents part of Montgomery County, and U.S. Rep. Chris Collins, R-Clarence, would have effectively forced New York state to take over all of the cost of its Medicaid program.

New York is one of the few states that still has a local Medicaid cost share: counties pay 13 percent, the federal government pays 51 percent, the state pays 36 percent. The Empire Center estimates the combined local share paid by counties is $2.3 billion, about 41 percent of all county property tax revenues. New York City’s local share, which wouldn’t be changed by the amendment, is about $5.4 billion. The total local share being $7.7 billion. All other states combined have a $9 billion local share.

According to the Empire Center, Fulton County property tax payers contribute about $28.4 million to Medicaid, which accounts for 50 percent of county tax revenues. As a share of total property taxes paid by Fulton County residents — county, city, town, school, etc — Medicaid accounts for about 15 percent, tied for the second highest overall percent share among counties. Montgomery County pays $29.2 million, 42 percent of its county tax revenues and 13 percent of its overall tax revenues.

The flip side to the Collins-Faso amendment is the local property tax hit that would occur if the Obamacare Medicaid expansion were to be withdrawn, either starting in 2020, or abruptly. Although many local people are against the Affordable Care Act, there is no question that it has reduced the local Medicaid property tax burden by several million dollars.

We support lifting the Medicaid cost burden off local taxpayers, however that can be resolved now. Most of the property owners living in Fulton and Montgomery counties simply do not have the income levels to shoulder the Medicaid burden, and cutting county taxes by 50 percent will help the local economy.

Gov. Andrew Cuomo has said Collins-Faso would force his administration to increase income taxes to respond to the $2.3 billion revenue loss from the counties and the $2.4 billion loss in federal funds, a double whammy that would effectively reverse the tax cuts and lower state spending increases during Cuomo’s administration. It is true that over time, the state has managed to whittle down the county share of Medicaid from 25 percent to 13 percent, while keeping state spending increases to 2 percent or less, but for poor areas like Fulton County, where in Gloversville the median household income is only $35,000, it is still just not enough.

It’s hard to know what the net impact on the local economy would be from the repeal of Obamacare, in whatever form that eventually happens. Surely thousands will loose coverage and, at some point, millions of federal and state dollars that would have been spent here, going to our hospitals and relieving costs for the poorest, simply won’t come here, but relieving the Medicaid tax burden on property tax payers might just be worth those risks. If Cuomo successfully redistributes the burden to state income tax, that’s preferable for our area than increasing the property tax burden.

The loss of Medicaid funds may also, finally, force a major debate in Albany about the cost of other state mandates, particularly the Triborough Amendment to the Taylor law, which has helped drive up the cost of public employee labor and benefits. About 80 percent of the cost of most local governments and schools are accounted for by labor and benefits. Cuomo capped property tax increases, but without taking on the public employee unions there is simply no way to get at the heart of why property taxes are so high in New York state.

© 2017 The Leader-Herald