NY counties warn of tax increases if state withholds $626M in federal Medicaid funding
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New York's county leaders are protesting the Hochul administration's plan to keep part of the federal funding the state relays to counties and New York City to help shoulder their massive Medicaid costs.
The shift would start April 1 and withhold an estimated $626 million that the counties and city otherwise would get over the next year. Gov. Kathy Hochul disclosed the plan and its impact in her budget proposal this month but intends to make that change administratively, without legislative approval needed.
County officials say they'd struggle to cover losses that large in already-set budgets and almost certainly raise property taxes in 2024 as a result. The 57 counties outside New York City would lose a total of $281 million, including $27.8 million in Westchester, $8.7 million in Rockland and $23 million in Monroe, according to estimates by the New York State Association of Counties.
"This is beyond ridiculous," Rockland County Executive Ed Day fumed.
He said the funding loss would "blow a hole" in Rockland's budget in the middle of the year, undermine its recovery from near-bankruptcy several years ago, and force a significant tax increase next year. He accused the state of using "political chicanery" and "thievery" to balance its budget.
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The move rekindles old tensions over Medicaid cost-sharing in New York, one of the few states that makes its counties contribute. The federal government pays much of the cost of medical bills through Medicaid, the health insurance program for the poor and disabled, and leaves the rest to the states. In New York, the state passes part of its share to the counties, which had long complained of ballooning costs.
The state quieted those concerns in 2015 by capping the counties' payments and shouldering the cost increases.
What the Hochul administration now plans to do is keep extra federal funds known as enhanced payments that it had shared with the counties and New York City. It defends that move partly by noting that the state has saved counties billions of dollars since 2015 by capping their contributions. It also says it will spend the withheld funds on Medicaid program improvements.
"Given the Governor's historic healthcare investments, the State is utilizing the available federal dollars to fund critical investments in Medicaid to ensure access, promote equity and stabilize the health system serving New York's most vulnerable," Hochul spokesman Matthew Janiszewski said in a statement.
Covering Westchester's nearly $28 million loss — roughly the equivalent of a 5% tax increase — in mid-year would likely require multiple budget moves that have not been mapped out yet, County Executive George Latimer said. County officials are first appealing to federal lawmakers to intervene and try to head off the state's plan.
"There's no question that it has a devastating impact," Latimer said Thursday.
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Latimer pointed out that the state capped counties' Medicaid costs to help them limit tax increases, and rejected the idea that the resulting savings now justified withholding from counties. He argued the state was foisting part of its own financial pressures onto them.
"You don't solve your problems by pushing it downhill to another government," Latimer said.
The counties' association is taking aim at the Medicaid plan by arguing it would undercut Hochul's stated mission of improving affordability. Steven Acquario, the group's executive director, told state lawmakers at a budget hearing on Wednesday that the losses would amount to average county tax increases of 7% statewide and drive up housing costs as a result.
"This is devolving into the old days of property taxpayers paying more and more of Medicaid," he said. "We thought we were beyond this."
Chris McKenna covers government and politics for the Journal News and USA Today Network. Reach him at cmckenna@gannett.com.
This article originally appeared on Rockland/Westchester Journal News: NY counties warn of tax increases if state withholds Medicaid funds
