According to the Tax Foundation, New York’s state and local property taxes on a per capita basis were $2,789 making them the 4th highest in the nation. The main reason is unfunded mandates.
In Oswego County, 80% of the county’s budget goes toward paying for state and federal mandates. The largest unfunded mandate is Medicaid which accounts for 55% of the county’s entire property tax levy. This is similar for counties throughout the state.
Medicaid is a joint federal and state program largely administered by states and is paid for with federal, state, and local funds. It provides health insurance for low-income families and individuals. Currently, about one-third of New York residents receive Medicaid assistance.
States have the flexibility to design their Medicaid programs and therefore, eligibility and benefits under Medicaid vary widely from state to state. For example, after the federal government enacted Obamacare, New York chose to expand the program to allow more low-income, non-elderly people to qualify for Medicaid. States also have the authority to pass some of the cost of the program to the counties who, in turn, raise revenue through property and sales tax. New York is one of 18 states that requires counties to cover some of the non-federal costs associated with Medicaid.
Recognizing the tremendous burden the local share of Medicaid was placing on property owners, in the 2012-13 budget, the state capped the counties’ Medicaid costs. This was a good start. However, more needs to be done. Oswego County is still sending close to $24 million each year to Albany for Medicaid. In order to provide full relief from this mandate, I sponsor legislation that provides for the full takeover of Medicaid over a 10-year phase-in period.
In tandem with the Medicaid takeover, the bill would freeze property taxes at the 2018 level then assume the property tax growth of local governments or school districts that stay within the 2% tax cap. In addition, the legislation requires the state create a Real Property Tax Redesign Team. The team would be tasked with reducing mandates and to find at least $500 million in annual recurring savings. A similar team called the Medicaid Redesign Team--comprised of representatives of health care workers, Medicaid recipients, and hospitals--was created in 2011 that recommended more than 70 solutions the state used to help Medicaid costs from spiraling further out of control. The first year alone it saved taxpayers an estimated $2.3 billion.
Certainly, at any level of government efficiencies can be found. However, New Yorkers should be skeptical of any politician who says property taxes are high because of mismanagement by county officials. State mandates are causing your taxes to be high. If you have any questions or comments on this or any other state issue, or if you would like to be added to my mailing list or receive my newsletter, please contact my office. My office can be reached by mail at 200 North Second Street, Fulton, New York 13069, by e-mail at [email protected] or by calling (315) 598-5185. You may also find me, Assemblyman Barclay, on Facebook.