The U.S. Senate’s health care bill has been under scrutiny throughout the country – and especially in New York, where a provision specific to the Empire State could cost billions.
The bill would enact per-capita caps on federal funding of Medicaid beginning in 2024, according to The Buffalo News, with further cuts affecting states which spend more than 25 percent of the national average on the program. It would also punish states that expanded Medicaid under the Affordable Care Act by dramatically lowering federal subsidies to cover the costs of the additional number of people on the program.
Beyond those general changes to Medicaid funding which would cost New York, the bill gets personal: The state would be further affected by the “Collins-Faso Amendment.” Named for GOP Reps. Chris Collins and John Faso, who introduced the provision in the House version of the health care bill, the measure prohibits counties upstate and on Long Island from paying a share of Medicaid. The cost would be shifted to the state, adding another $2.3 billion in expenses.
An irate Gov. Andrew Cuomo wrote a letter to New York’s congressional delegation on Monday denouncing this amendment and proposing the “Faso-Collins federal tax.” This would be a new county property tax to offset the expected cost of the shift. If the state Legislature convenes this summer to extend mayoral control of New York City schools, the Daily News reported, Cuomo is expected to push his “Faso-Collins federal tax” for a vote. The tax would appear by that name on county property bills in retaliation for the GOP lawmakers’ amendment.
Edward Cox, chairman of the state Republican Party, dismissed Cuomo’s proposed tax as a political stunt, accusing him in a statement of “auditioning to become a hero to the liberal left."
“Once again, he would rather stick his hand into the pocket of New Yorkers, who already pay the highest taxes in the nation, than get control of his spending,” Cox wrote.
But Carol Kellermann, president of the independent Citizens Budget Commission based in New York City, said that the cuts to Medicaid funding would create a need for new revenue streams, as there would be a greater burden on the state to cover health care costs. The proposed tax is therefore not just a response to the amendment by Collins and Faso, but an attempt to find revenue to pay for all expected costs.
“The governor isn’t just looking to the immediate $2.3 billion,” said Kellermann. “He's probably thinking down the road of many more billions of dollars if he's got to pick up costs.”
The CBC released a statement in March in favor of the basic principles behind the Collins-Faso Amendment. The organization suggested the amendment would encourage the state to simply end the current system of counties paying for a share of Medicaid, which places “a disproportionately large and inequitable burden on taxpayers in localities with more poor residents and greater social welfare costs.” However, as this shift would be accompanied by severe cuts to Medicaid funding, Kellermann discussed the possibility of new taxes to offset the losses.
“Putting it on the property tax is a particularly dramatic and onerous thing to do,” Kellermann said, adding that Cuomo’s proposed tax was more political than practical. “I think the governor is probably suggesting it more as a way to highlight the urgency of the situation, than he really plans to do that.”
As an alternative, Kellermann suggested using revenue from local sales taxes to redirect towards state funding of Medicaid.
“That seems a more appropriate way to think about it than putting it on the property tax, and would spread the burden to everyone, not just people who are property owners,” she explained. The state Legislature failed to extend local sales taxes before ending its session last week, and so a special session would need to be convened to handle any similar plan.
Whether the “Faso-Collins federal tax” is a retaliatory proposal or genuinely necessary to recoup costs of diminished Medicaid funding, the Senate health care bill would have significant consequences for New York.
“I do agree that he’s got a problem,” Kellermann said about Cuomo, who may soon need to plan for billions in state losses. The country is watching to see if the Senate health care bill comes to a vote this week, and perhaps none more avidly than the governor of New York.
Correction: An earlier version of this post incorrectly said that the CBC is in favor of the Collins-Faso Amendment. In fact, the CBC is in favor of the basic principles behind the amendment but disagrees with the approach.
NEXT STORY: New York state’s top lobbyists