U.S. Senate Majority Leader Chuck Schumer speaks on House Republican debt ceiling plan (April 26, 2023)

House Republicans passed a debt ceiling hike Wednesday.

Speaker Kevin McCarthy pushed his package to raise the debt ceiling by $1.5 trillion through the House in a close vote. But the White House continues to say that it will not negotiate on the issue.

The federal government could default as soon as early June.

U.S. Senate Majority Leader Chuck Schumer blasted the House’s Limit, Save, Grow Act of 2023, calling it a “gut punch” and a “Default On America,” “This plan means fewer jobs, higher costs for the American people, particularly average middle class people, would leave police, first responders, border patrol, and our brave veterans all hanging out to dry. There are dramatic slashes with each of those very necessary functions.”

Schumer said a clean debt ceiling had been passed before in a bipartisan manner twice under President Trump and once under President Obama.

Congressman Nick Langworthy issued a statement on the plan, saying, “Today, I was proud to vote for the Limit Save Grow Act that is the first step to breaking Washington’s addiction to spending and getting our nation’s finances back on track. This plan is a responsible, reasonable framework for spending reforms that the American people are demanding. It’s time for President Biden to stop the games and come to the table to negotiate.”

Schumer said the cuts in the House’s plan are not abstract including the possibility that 2 million New York residents could lose Medicaid coverage, “It slashes federal heating assistance, LIHEAP, that upstate families and seniors use to stay safe. We lose close to a billion dollars in LIHEAP and would reduce the average benefit a household would receive by $400. New York does better with LIHEAP than any other state and it would hurt us dramatically.”

Schumer said there could be a $144 million cut in SNAP benefits for New Yorkers which would affect 53,000 residents in the state.

Moody’s analytics warned that “dramatic” cuts to government spending in the House Republican’s plan would spark a 2024 recession that costs the economy 2.6 million jobs and lifts the unemployment rate near 6%.

A nonpartisan Congressional Budget Office analysis released Tuesday showed the Republican plan would reduce federal deficits by $4.8 trillion over the decade if the proposed changes were enacted into law.

Nick Langworthy

Congressman Nick Langworthy has introduced legislation to prevent New York State from clawing back federal funds meant for counties.

The “Protect Local Taxpayers Act” is in response to Governor Kathy Hochul’s Budget Proposal that would claw back $625 million in Federal Medical Assistance Percentage (FMAP) funds that have been designated to counties since 2011. Congresswoman Claudia Tenney (NY-24) and Congressman Brandon Williams (NY-22) are co-sponsors of this bill.

The act will prevent state governments from further shifting state Medicaid expenses onto local county governments.

New York’s per capita spending on Medicaid is the highest in the U.S. and more than double the national average. The county share of Medicaid is currently $7.6 billion per year and, if Hochul’s plan moves forward, Langworthy said counties in the 23rd congressional district will face a budget shortfall in the tens of millions. The impact to Chautauqua County would be $4 million.

Langworthy said in a statement, “These federal funds are dedicated specifically to help cover local government’s costs, not to be used for Kathy Hochul’s slush fund.” He added, “We need to stand up in Congress and tell the Governor she can’t raid these federal funds.”

State Senator George Borrello joins other Senate Republicans in announcing affordability plan (February 13, 2023)

Members of the State Senate Republican Conference have unveiled a proposal for “A More Affordable New York.”

This is one of several initiatives being proposed as part of the conference’s “Rescue New York Agenda.”

The Conference specifically called out several Executive Budget proposals that they say would exacerbate New York State’s lack of affordability, including:
– Eliminating enhanced Medicaid payments to local governments, which they say could lead to increased local property taxes;
– Increasing unemployment insurance taxes on small businesses and farms;
– Further increasing payroll taxes in the MTA region; and
– The use of hundreds of millions of dollars in state money in New York City for new migrants.

The Senate Republican plan includes:
– Eliminating costly unfunded mandates that drive up local property taxes;
– Protecting businesses from unemployment insurance tax hikes by creating an Unemployment Insurance Solvency Reserve Fund and repealing the interest assessment surcharge, which is the assessment on businesses to pay back the UI Trust Fund’s deficit;
– Repealing Congestion Pricing; and
– Providing relief from heating costs geared toward the middle class.

State Senator George Borrello said in a statement that the $7.8 billion unemployment insurance fund debt is hurting small business owners and that the Republican’s, “..plan would correct this injustice and spare employers, and their customers, from added costs by shifting repayment responsibility to the state and creating a reserve fund to guard against future insolvency.”

Nick Langworthy

Congressmen Nick Langworthy and Marc Molinaro are leading the charge against Governor Kathy Hochul’s 2024 state budget proposal to clawback Enhanced Federal Medical Assistance Program (eFMAP) funds.

These are funds designated for counties and local governments and the proposed clawback could result in up to $1 billion in new Medicaid costs for those municipalities.

According to a press release sent out by Senator Chuck Schumer in March 2020 about the bipartisan Coronavirus bill that was passed by Congress, FMAP is a matching rate enacted in 1965 that determines the federal funding share for state Medicaid programs. The federal government matches state funds spent on Medicaid, based on the state’s FMAP, which varies by state.

For example, New York’s FMAP is 50%. This means that for every dollar spent on Medicaid in New York, New York’s share of the cost is fifty cents (this fifty cents, in turn, is split between the State and Counties and localities), while the federal government chips in the other fifty cents. Schumer’s efforts increased the federal share of New York’s Medicaid program to 56.2 percent, thereby dropping the state’s share to 43.8 percent. This delivers more federal dollars immediately to the state and localities, to the tune of more than $6B annually.

In the breakdown of what counties could expect to receive as a result of that legislation in 2020, and, thus, what they are expected to lose due to the clawback by the Governor, is as follows for local counties:
– Allegany County: $1.97 million
– Cattaraugus County: $3.35 million
– Chautauqua County: $6.24 million
– Erie County: $41.66 million

Langworthy and Molinaro said the diversion of these funds will force municipalities to raise property taxes and drastically cut services. Together, with other members of the New York delegation, they sent a letter imploring the governor to reverse her decision that will have grave consequences for communities across the state.

Their letter stated, “Your decision to divert the necessary local support from eFMAP will force our state’s local governments to shoulder the shortfall. This will lead to a reduction in access for the very services that eFMAP is intended to support, leading to harm for the most vulnerable.. Other localities could be forced to raise property taxes.”

PJ Wendel

Chautauqua County Government could be hit with a $4.3 million shortfall this year should New York State move forward with clawing back Medicaid funds.

The Enhanced Federal Medical Assistance Program (E-FMAP) funds are monies from the federal government to New York State that are meant to go to local counties, but Governor Kathy Hochul‘s proposed budget holds onto those monies.

County Executive PJ Wendel said if this stays in the budget, it would put counties back 20 years. He said the idea of the state holding onto E-FMAP monies isn’t new and that former Governor Andrew Cuomo had proposed doing the same in the past, “But the Budget Director, who was the Budget Director under Governor Cuomo, Robert Mujica; we were told kind of slipped this in without the Governor’s (Hochul) knowledge. Well, we all said this on a meeting last week, if anybody slipped anything into our budget without our knowledge they probably wouldn’t be working for us. This person has since left, so there’s a vacant position for.. I think there’s an Acting Budget Director now. So the Budget Director position is really vacant so we’re going after a ghost.”

Wendel said the claw back of funds is going into the state’s fund balance and not designated for any specific program.

He said he learned this week that the state is also behind on Medicaid reimbursements to counties to the tune of $8 million for Chautauqua County alone.

Should the Medicaid claw back continue to be part of the state budget when it’s passed April 1, Wendel said the $4.3 million that Chautauqua County would lose in funding is a large portion of the budget, “As you know, we have a very favorable fund balance. This year we did use $4 million in capital projects. So, I’d hate to cancel any of those capital projects cause they are necessary and sometimes, it’s most often times, deferred maintenance and stuff we’re putting off. We do have the ability right now to cover that, but why is it that we are being punished for being fiscally prudent when the Governor can’t seem to get their budget under control?”

Wendel added the New York State Association of Counties, which he is a member of and sits on the board of directors, is working to negotiate with Hochul’s office on this item. He said he hopes those who have pull with Hochul, like Erie County Executive Mark Poloncarz, can sway her to pull this out of the budget. Wendel said he doesn’t believe the State Legislature has any say over the budget item and that it’s at the Governor’s discretion.

Governor Kathy Hochul presents her 2024 State Budget

Governor Kathy Hochul has unveiled her $227 billion state budget for 2024-25.

This budget is $5 billion more than the current year, with a 2.4% increase in all spending.

Hochul said public safety is her top priority, budgeting $337 million.

She is proposing $40 million for funding discovery law changes that have required local prosecutors to make evidence available to defense counsel on a fast basis. The budget also backs $20 million for pre-trial services.

Hochul has also proposed $50 million to aid communities affected by gun violence and $35 million in capital grants for combating hate crimes.

Annual school aid will increase $3.1 billion, or 10%, for a total of amount of $34.5 billion. This includes fully funding the Foundation Aid formula for the first time in 17 years.

Also under education spending is $125 million to expand full day pre-kindergarten and $250 million for tutoring programs to help students recover from learning loss.

As previously announced, Hochul allocated $1 billion toward Mental Health with that multi-year funding going toward the creation of 1,000 inpatient beds, $30 million to expand school-based mental health care, and increased funding for outpatient services.

Hochul wants to expand housing in the state by building 800,000 new units, counting those that are already in development. The budget includes a plan that would allow projects to move ahead over the objections of local zoning regulations if a community is failing to meet targets. Funding for housing includes $250 million for infrastucture support and $20 million for planning assistance.

Child care assistance will receive a $7.4 billion increase over four years. Hochul said this is the most ever. The budget also would provide instant eligibility for child care assistance for anyone receiving government support. Co-pays would be lowered and more support is being proposed for child care providers.

Under health care, the budget seeks to address access issues by adding more than $1 billion in health care capital funding, expanding Medicaid coverage for 7.8 million low-income New Yorkers, and improving access to aging services and high-quality long-term care.

However, the New York State Association of Counties (NYSAC) President Michael Zurlo said Hochul’s budget includes an “unprecedented shift that will saddle local taxpayers” with up to $1 billion in new Medicaid costs by pocketing Enhanced Federal Medical Assistance Program (eFMAP) funds that were intended to go directly to local governments to help hold costs

While there is no personal income tax increase in Hochul’s budget, she is proposing to extend a higher tax rate for wealthy corporations that had been set to expire at the end of the year.

In 2021, former Governor Andrew Cuomo had increased the tax rate for corporations taking in at least $5 million a year in revenue from 6.5% to 7.25%. The increase was only supposed to be temporary and set to end after three years, but Hochul wants to extend it for another three years. The extension would bring in between $800 million and $1.1 billion annually. Democrats are expected to support the extension.

The State Legislature now has until April 1 to approve a fiscal plan.

State Comptroller Tom DiNapoli‘s office issued a report saying the increased enrollment has contributed to a steep decline in the number of New York residents without health coverage. New York ranked 8th lowest in the country for uninsured residents in 2019, which is an improvement from 20 in 2008.

According to a report, the number of state residents without health care coverage declined from 2.2 million in 2008 to 1 million in 2019. The expansion of the Medicaid program played a large role in the sharp drop in the number of uninsured New Yorkers.

DiNapoli said while the drop in New Yorkers without health coverage is positive news, State budget projections rely on expectations for significant enrollment declines that may not materialize, which could drive significant unbudgeted costs.

Medicaid is the second largest category of state spending, estimated at $27.8 billion. As a result of the economic instability caused by the pandemic, monthly Medicaid enrollment swelled to more than 7 million people in February 2021. The Division of Budget currently estimates that enrollment will decline by more than one million individuals in state fiscal year 2022-23; however, should this reduction occur at a slower rate or should enrollment fail to decline by as much as projected, the State financial plan will incur additional costs.

The report recommended that to protect the long-term viability of the Medicaid program, State policymakers should closely monitor Medicaid enrollment and spending trends, and engage stakeholders in developing strategies to protect the quality of care for program participants while effectively containing costs.

“As we have always done, counties stand united behind managing the cost of Medicaid and improving the quality of care for those in need,” said New York State Association of Counties (NYSAC) President John F. Marren, the Ontario County Chair. “However, any state Medicaid proposal must protect local taxpayers by keeping the current cost control caps in place.”

New York is one of the few states in the nation to require county funds to cover the cost of Medicaid, and the only one that required county taxpayers to fund a full half of the State’s share when it was implemented in 1966. Today, counties and New York City fund $7.6 billion of the state’s more than $70 billion Medicaid program.

In 2012, to help counties and local governments adhere to the 2% property tax cap, Governor Andrew Cuomo and State Lawmakers enacted a zero growth Medicaid cap. The cap helped counties stabilize and, in several cases, reduce county property tax rate levies.

“Counties will work with state leaders and with the Medicaid Redesign Team (MRT) to address what is under local control, but we cannot absorb additional costs without jeopardizing vital services that our residents depend on,” said NYSAC Executive Director Stephen J. Acquario. Counties are represented on the MRT by Suffolk County Executive Steve Bellone, who also sits on the NYSAC Board of Directors.

The Executive Budget proposal includes three separate initiatives that would impact the Medicaid local share counties pay in support of the state Medicaid program:

1. 1. Capping eFMAP Federal Fiscal Benefits to Counties
      Under this proposal the Budget proposes to cap the amount of federal savings that have been accruing to counties and New York City from the Affordable Care Act, funneling any savings to the state. This provision is effective April 1, 2020, but no fiscal impact amount is provided in the budget for this proposal.
   2. Require Counties and New York City to Adhere to the 2 Percent Property Tax Cap or Lose the Benefits of the State Funded Local Medicaid Growth Cap
      If a county fails to stay under the property tax cap, or if New York City’s property tax levy grows more than the county property tax cap allows, then they would lose all of the savings from the local Medicaid cap in that year. This provision is effective April 1, 2020.
   3. Adhere to a Local Share Medicaid Costs Increase of No More than 3 Percent
      If a county’s local share and associated savings exceeds three percent in any given year, county taxpayers must refund to the state any excess benefit over three percent. This provision is effective April 1, 2021.

“The Medicaid cap has been crucial in helping counties stay under the property tax cap and save local taxpayers money. While we welcome the opportunity to work with the MRT to lower Medicaid costs overall, we maintain that property taxpayers should not shoulder the burden of Medicaid cost increases that counties are not empowered to restrain. We can’t cap what we can’t control, and our taxpayers should not be penalized for that,” said Albany County Executive Dan McCoy, who also serves as president of the New York State County Executives’ Association.

For additional information and resources related to the SF2021 Budget Medicaid Proposals visit https://www.nysac.org/medicaid.

Rep. Tom Reed (R-Corning)

WASHINGTON – Republican leaders are steering the Senate toward a crucial vote on their bill eviscerating much of the Affordable Care Act, President Barack Obama’s health care law. The pending vote has been buoyed by the near theatrical return to the Capitol of the ailing Sen. John McCain (R-AZ).

On Monday McCain announced through his office that he would be back in Washington for the critical roll call on beginning debate on the legislation. The 80-year-old has been at home in Arizona since he revealed last week that he’s undergoing treatment for brain cancer.

Meanwhile, Congressman Tom Reed (R-Corning, NY 23) said he’ll oppose any healthcare legislation that comes out of the U.S. Senate that does not include an amendment that removes the local cost of Medicaid.

Reed released a statement on Monday and reiterated it during his weekly conference call with the media, saying that the Faso-Collins Amendment that was included in the final house version of the American Health Care Act also needs to be included in any final version the Senate puts forth.

“Standing with our local taxpayers is something I care deeply about and this opportunity -to do the right thing by putting the burden at the state capitol that controls medicaid, and can design medicaid, and therefore is ultimately responsible for that system – to me is the right thing to do,” Reed said. “Without it in the legislation I just don’t feel comfortable moving forward with the Senate health bill if it doesn’t have that provision in it.”

The Faso-Collins Amendment – sponsored by Republican congressman Chris Collins and John Faso of New York, would requires every state in the country to assume all costs of Medicaid.  It is specifically aimed at New York State, which is currently the only state in the country that still requires local county governments to pay a portion of the Medicaid cost.

The argument in favor of the amendment is that it would help reduce local property taxes but eliminating the Medicaid burden. Gov. Andrew Cuomo and other state leaders have argued against the bill, saying the removal of the local share would drive up costs at the state level by $2.3 billion – meaning the state would likely have to find ways to offset that increase, including the possibility of reducing local aid.

In Chautauqua County for the 2017 budget which totals $233 million, a total of $30.3 million was budgeted for Medicaid.

It was reported last week that major portions of the Senate Republican health bill — including the Faso-Collins Amendment — likely will end up on the cutting room floor, thanks to a ruling by the Senate parliamentarian, who ruled that major portions of the health bill are policy-making measures that can be struck from the bill unless 60 senators vote to keep them.

With Republicans struggling to even get the 50 votes they need to pass the health bill, the ruling puts Democrats in the position where they could challenge and defeat several provisions in the bill, from the Faso-Collins amendment to a provision barring federal funding for Planned Parenthood.