NEW YORK STATE BUDGET IMPACT

This past week the New York State Association of Counties (“NYSAC”) released its 2012-13 State Budget Impact Summary.  This is important to every county because our budget is driven by various State mandated programs.  That summary is 51 pages long, including charts and tables.  The major categories of that summary are as follows:

 

Medicaid.            The big news is that the State will gradually take over the “cost growth” burden from county governments.  Instead of the current 3% annual increase, the 2013 increase will be limited to 2% and the 2014 increase will be limited to 1%.  In 2015 and later years counties Medicaid payments will be capped.  That will save counties just over $1 billion over the next 5 years.  For 2012 there is no Medicaid mandate relief.  Also, there was no serious discussion about the State taking over our current share of Medicaid.  Over the next 5 years counties in NYS will pay more almost $38 billion for Medicaid that no other counties in America must pay.

 

Pension Reform.             Governor Cuomo had proposed some radical changes in the State Pension System, including creation of a new “Tier 6” for newly hired State and municipal employees.  Tier 6 that will save the State and municipalities an estimated $80 billion over the next 30 years.  However, it doesn’t begin until mid-2013, and will then only apply to new employees.  New employees will pay up to 6% for their entire working career.  Tier 3 and 4 enrollees currently pay only 3% of their wages for the first 10 years of their career.  Current Tier 5 enrollees pay only 3%, but do so for their entire working career.  None of the changes can be made retroactive because of prohibitions contained in the State Constitution.  That means that county contributions towards employee pensions will continue to skyrocket for the foreseeable future.  Another proposal to create a “defined contribution” pension plan was rejected by the Legislature.  There was no significant mandate relief related to pensions.

 

Special Education Pre-School and Early Intervention Health Services Reforms.  The original budget proposal called for significant reforms to the “Pre-K” and EI programs, including splitting cost increases equally between the State, school districts and counties.  The Legislature rejected all proposed Pre-K reforms.  The Legislature also rejected proposed EI reforms that would require health insurance policies to cover services for EI enrolled children.  The only change involved creation of a statewide fiscal agent to manage contracts and billing.  It appears the State Legislature is more responsive to lobbyists for the insurance industry and Pre-K and EI contractors than it is to the needs of taxpayers.  There was no mandate relief here.

 

Human Services.            The budget approved a 10% increase in the Public Assistance Grant raising the typical grant to $770 per month.  The new Budget eliminated State funding for child support enforcement administration to local governments.  Counties will supposedly be allowed to keep certain child support funds actually collected.  Certain cost of living adjustments (“COLAs”) were eliminated from foster care, adoption and other programs.  State revenues from telephone surcharges will be $193 million.  The State seized almost $80 million for the General Fund and $25 million for the State Police.  About $89 million will come to local governments for actual services.

 

Miscellaneous Changes.            The State Budget included funding proposals related to agricultural programs, casinos and the State Lottery program.  The Budget increased state funding for community college students from $2,122 per year to $2,272 per student.  Economic Development initiatives totaling $220 million were authorized.  The Budget also included funding for environmental and energy initiatives, including $16.2 million for NYSERDA to develop a State Energy Plan.  The Budget approved about $1.2 billion in Transportation funding.  Allegany County will benefit from two projects totaling $3.811 million.  State Route 305 (Cuba to Belfast) and I-86 (Friendship to Cuba) will be resurfaced.

 

No big surprise.  There is no significant help or relief for Allegany County in the 2012-13 State Budget.

 

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