In Recent Medicaid Testimony, Counties Call for End to Diverting Local Sales Tax Revenue as Added Program Funding

• By: NYSAC
• On: 11/18/2021 09:54:54
• In: Press Releases

At nearly $90 billion in all funds spending (from state, federal and county coffers), the state's Medicaid program now consumes more than 40 percent of the entire New York State Budget. This is an ongoing concern for counties, which contribute a capped amount of $7.6 billion annually to the state's public healthcare program.
 
In recently delivered testimony to the Assembly Health Committee, the New York State Association of Counties (NYSAC) asked state leaders to stop diverting an additional $250 million annually in local sales tax revenue to bolster Medicaid spending, a provision first enacted in the 2021 State Budget, and included in the most recent State Fiscal Plan.
 
“The state has made efforts in the past to control costs in the Medicaid Program and these efforts should continue in every budget cycle.  It should be a collective responsibility of the state and the counties to design and run an efficient taxpayer funded health care program. And we will continue to do our part root out waste, fraud and abuse in the system. We respectfully ask Governor Hochul to allow the sales tax diversion to sunset as it is scheduled to do in March of 2022. State lawmakers should make that go away this year,” said NYSAC President and Tioga County Chair Marte Sauerbrey. 
 
New York State is a national outlier in its deep reliance on locally generated revenue to support the state's Medicaid program. At $7.6 billion a year, counties and NYC contribute more than all other counties in the nation combined. This massive local contribution is derived from regressive property and sales taxes and is not reflected in the State Financial Plan, essentially keeping it off state's books, hiding the true cost of the program.
 
In addition to the standard local contribution, the SFY 2021 budget enacted a temporary two-year program that diverts $250 million annually in local sales tax from counties ($50 million). The stated goal of the temporary fund was to provide assistance to fiscally distressed health facilities during the pandemic, but as of Nov. 1, 2021, no funding has been provided to health facilities despite the state having diverted $375 million in local sales tax for this program.