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Advocates, analysts: Cuomo's proposals, state deficit could impact property taxes

Newsday reporter Michael Gormley looks at Gov. Andrew M. Cuomo's plan to direct more school aid to poor districts. (Credit: Newsday)

ALBANY – When Gov. Andrew M. Cuomo in his State of the State speech last week blamed counties for the state’s multibillion-dollar deficit and promised to direct more school aid to poor districts, advocates and analysts feared for New Yorkers who are already paying some of the nation’s highest property taxes.

In responding to the state’s $6.1 billion deficit, Cuomo said he would again redesign the biggest driver of that cost – Medicaid. Cuomo criticized counties for their administration of the state and federal healthcare program but praised progressive policies from Albany that have insured far more New Yorkers with one of the most generous programs in the nation.

“Thanks to our good work,” Cuomo said of efforts by himself and the legislature, “95% of the citizens of New York have healthcare coverage and that is the first time ever. That is a remarkable achievement.”

“Remember what we did, six years ago,” Cuomo continued. “We froze the cost of Medicaid to local governments to help those local governments meet their property tax cap.” That agreement capped local property taxes at 2 percent annually to ease a string of skyrocketing rises. As part of the deal, the state pays for the substantial annual increases in Medicaid spending, while counties administer much of the program.

“We have seen dramatically higher cost increases recently. Why?” Cuomo said. “You cannot separate administration from accountability. It is too easy to write the check when you don't sign it … The situation is unsustainable.”

Cuomo's aides quickly walked back Cuomo’s statement, saying he doesn’t intend to require counties to pay more of the Medicaid bill, although some independent analysts aren’t so certain.

“Governor Cuomo pointed the blame at local governments — and implied that he might hit them up for a bailout,” said Bill Hammond of the Empire Center for Public Policy, a fiscally conservative think tank. “That's a fundamentally wrongheaded approach. The only real solution is to control costs, not shift them to local taxpayers.”

“To reverse the cap on the local share would be a giant step backward,” said David Friedfel of the independent Citizens Budget Commission. “To balance the state books on the back of counties with poor people would be a bad idea.”

Friedfel said, however, the state can ease the deficit by reducing spending through efficiencies and tough political choices to contend with what he said is more accurately a $7 billion deficit by his calculations.

“I think no matter what, state taxpayers should be concerned,” he said.

How Cuomo will deal with the budget deficit driven by more than $4 billion in unfunded Medicaid spending will be part of his budget presentation to the legislature, which is due by Jan. 21. His aide wouldn't comment on whether his Medicaid and school aid plans could result in property tax increases. He has, again, postponed a Medicaid payment — this time about $2 billion — into coming years, and his plan to redesign Medicaid would seek cuts and other savings.

But Medicaid spending to hospitals, nursing homes and for popular healthcare programs are well protected by legislators who face reelection this fall.

“Cutting services is a non-starter for the Democratic Assembly,” said Assembly Speaker Carl Heastie (D-Bronx) on Thursday.

Suffolk County Executive Steve Bellone, a Cuomo ally, didn't respond to a request for comment.

“Nassau County will continue to work with the state to control costs and deliver the quality services our residents deserve,” said Nassau County Executive Laura Curran. She added she would continue to fight for “our already-overburdened taxpayers in Albany.”

Counties aren’t alone in their concern about property taxes.

Despite facing the biggest budget deficit since the Great Recession, Cuomo also promised last week to close the funding gap between wealthier suburban schools and poorer urban schools.

“It is shameful that we do not distribute the funding in the most progressive way,” Cuomo said. He noted that because schools are funded by state aid and local property taxes, a wealthy district can spend as much as $36,000 in educating a student while a poorer district may spend as little as $13,000 a year per student.

“If we're the progressive capital and we want to beat our chest and say we're the progressive capital, then act that way, and don't play politics with education money,” Cuomo said. “Use state funds to raise those at the bottom. Fund the poorer schools and close the education gap. And let's do it this year.”

Advocates for school aid, including politically powerful teachers unions, have supported the state’s drive to direct greater shares of state aid to the poorest districts, but bringing annual record increases in school aid back to districts is one of the top goals of legislators. School districts also contend they are already shortchanged by the state and seek a phased-in payment of $3.8 billion they say is owed by the state.

In a statement, Board of Regents Chancellor Betty A. Rosa and Education Commissioner Shannon Tahoe said they support Cuomo’s move to fund high-needs schools, but “we must ensure all schools have the resources they need to provide a high-quality education for all New York students.

“There is always concern, especially in a tight budget year,” said David Albert of the state School Boards Association. “But I think every legislator understands the importance of state school aid to their district … they always do deliver, and we expect that again this year.”

With Yancey Roy


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