new-york-state-senate-300x190-2155766In a Newsday story Thursday morning about the political fight over single-payer health care, a spokesman for Democrats in the state Senate made a noteworthy promise: “The Senate Democratic majority will not raise taxes.”

If so, then single payer is dead in Albany. Without massive tax hikes, there’s simply no way to finance a state-operated health plan that covers 20 million New Yorkers.

The seemingly definitive statement by spokesman Mike Murphy comes as a surprise, because the single-payer health bill pending in the Legislature, known as the New York Health Act, is cosponsored by all 31 sitting Democrats in the Senate—the people for whom Murphy ostensibly speaks. Many of those legislators are currently campaigning on promises to support the bill if elected.

That legislation, which has already passed the Assembly four years in a row, includes two new levies: a payroll tax (with an 80-20 split between employers and employees) and a new tax on non-payroll income, such as investment returns. The bill does not specify rates or brackets, leaving those all-important details to be determined later, but there’s no question the price tag would be high.

A study by the RAND Corp., for example, estimated that Albany would need a $139 billion tax hike to finance the first year of single payer, which equates to a 156 percent increase in total state revenues.

A no-new-taxes pledge would also seem to throw in doubt a number of other progressive priorities in Albany, such as pouring billions more into public schools and the New York City transit system—which by themselves would likely require either new revenues or deep cuts to other programs in the state budget.

Murphy made his comment in response to a campaign broadside from the Senate GOP, which charged that the Democrats’ single-payer plan would lead to income tax hikes averaging $20,445 in Nassau County and $14,616 in Suffolk County.

The Republicans’ analysis fudged the facts somewhat: It assumed that the health plan would be financed entirely by income taxes, as opposed to the payroll and non-payroll taxes specified by the New York Health Act.

It’s also true—as single-payer proponents point out—that the cost of new taxes would be offset by the elimination of premiums, possibly resulting in a net savings for some individuals and businesses. This largely depends on the new taxes having a steeply progressive structure that dramatically increases costs for wealthier taxpayers—which, as an author of the RAND study warned, could trigger a “collapse” of the state’s tax base.

All of that said, the GOP’s basic point—that taxes would “skyrocket” if single-payer were enacted—is indisputable, a feature of single payer likely to make it unpopular with swing-district voters on Long Island and elsewhere.

In the heat of close-fought elections that could put them in the majority for the first time in 10 years, Democrats have been sending mixed signals. In a radio interview this week, Sen. Mike Gianaris of Queens, who chairs the Senate Democrats’ campaign committee, omitted single payer from his priority list for 2019. Yet he remains a cosponsor of the New York Health Act, and many of his rank-and-file members continue touting their support for the bill on their campaign websites.

State lawmakers cannot have it both ways: Either they oppose the New York Health Act or they support one of the biggest tax hikes in the history of this state or any other.

Was Murphy’s comment a case of campaign spin, or have Senate Democrats woken to the reality that the New York Health Act is prohibitively expensive? It’s a question worth getting an answer to before Election Day.

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

You may also like

Proposed minimum staffing law could push some nursing homes to employ fewer licensed nurses

Some New York nursing homes are likely to scale back their use of higher-trained personnel if proposed minimum staffing ratios become law, according to a review of existing employment patterns. Read More

New York’s ‘Single Payer’ Health Plan Would Disrupt Coverage for Out-of-State Commuters, Too

Under the latest version of the single-payer bill – which has broad support on Democrats in the Legislature – hundreds of thousands of commuters from other states would face the replacement of their current health insurance with a Medicaid-like plan funded with tax dollars and managed by Albany. Read More

New York’s Medicaid and Public Health Crises Get Short Shrift in the New State Budget

In spite of an ongoing pandemic and spiraling Medicaid costs, New York's health-care system received surprisingly little attention in the new state budget. On issue after issue, law Read More

Lawmakers Mull Medicaid Proposals That Would Speed New York Toward a Fiscal Cliff

As a budget deal nears in Albany, reining in spiraling Medicaid costs seems to be the last thing on anyone's mind. Governor Cuomo is advancing only Read More

With Hopes Dashed for “Blue Wave” Bailout, Cuomo Needs to Deal With Budget Shortfall

With the national election results still unclear, Governor Cuomo can no longer put off tough decisions on how to balance New York's pandemic-ravaged state budget. Read More

NYHA’s revenue roller coaster

A little-discussed hazard of creating a state-run single-payer health plan in New York would be its vulnerability to the business cycle. It would depend heavily on taxes collected from high-income New Yorkers, a source of revenue that's especially prone to booms and busts. A recession – or a downturn in the stock market – could easily open a budget hole not just in the billions of dollars, but in the tens of billions of dollars. Read More

A rush to regulate PBMs

In the name of lowering drug costs, state lawmakers are on the brink of passing hastily drafted and ill-considered legislation that would risk driving those costs even higher. Read More

Senate OKs less local say on cops

Many of the faces have changed, and so has the majority party, but the state Senate is more united than ever in its willingness to weaken disciplinary procedures for cops and firefighters accused of wrongdoing. Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100

General Inquiries: Info@EmpireCenter.org

Press Inquiries: Press@EmpireCenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!