Faso-Collins plan is bad for state, needed by counties

New York’s Medicaid program is wonderful — until the time comes to pay the bill.

When Medicaid was created in 1966, the federal government said it would pay 50 percent of the program’s cost with the other 50 percent paid by the states. New York made the decision to be one of nine states to pass a portion of its costs on to its counties, splitting its burden equally with counties that it told to administer the program. The thinking was that counties would do their best to keep costs as low as possible if they were given a financial stake in the program.

Fast-forward 51 years, and Medicaid is, for example, an $11 million-a-year cost for Franklin County and $6.6 million for Essex County taxpayers. It’s more than two-thirds of Franklin County’s overall property tax levy and roughly 30 percent of Essex County’s. And it used to be an even bigger portion.

County officials have begged for years for the state to assume the entire cost of Medicaid, and while state officials have demurred, they did pass legislation to cap Medicaid costs from growing too much in a given year. The compromise was necessary because the state can’t afford the behemoth it has created.

Look no further than Gov. Andrew Cuomo’s swift response to the Faso-Collins rider in the American Health Care Act. Seeking to bolster Republican support for the legislation, U.S. Reps. Chris Collins, R-Buffalo, and John Faso, R-Kinderhook, proposed ending the county share of Medicaid and putting the burden on the federal and state governments. Cuomo came out swinging, blasting Faso, Collins and all House Republicans who voted for the legislation. Then Cuomo said he would create a new tax, called the Faso-Collins tax, to put the burden back on county taxpayers.

Of course the state would have to raise taxes if it takes on the counties’ Medicaid bills, but county taxes would be massively reduced. In theory, that would be a good trade-off. Property taxes, which counties use but the state doesn’t, are inherently less fair than income taxes, which the state uses but counties don’t, because income taxes are based on ability to pay and property taxes are not. Just because one owns property doesn’t mean one can afford to pay massive taxes on it every year. Therefore, it’s generally good to trade property taxes for income taxes — especially for a non-local service people use statewide, such as Medicaid.

The Faso-Collins amendment is not a good way to go about it, however. As federal micromanagement of state policy goes, this is particularly political — these two congressmen are clearly doing it to score points against Cuomo — and almost casual in the way it was tacked onto the health care bill.

But it also highlights how adamantly and consistently Cuomo has opposed the state’s local governments — which makes no sense, really, since all his constituents have to live in them.

As distasteful as Faso and Collins’ methods are, and as bad a deal as their amendment would be for the state, it would be a good move for local governments that have no say in what is provided by Medicaid. If the Republican health care bill is passed and includes Faso-Collins, state residents should not let Cuomo get away with his hissy-fit reaction of creating a costly new tax for a program he creates. There is an easier solution — find ways to live within a realistic Medicaid budget.

Medicaid is an essential program and should be preserved. We oppose some federal Republicans’ plans to shrink it. Carving out a balanced Medicaid program that helps people but is also fiscally responsible won’t be easy or popular, but it is the right thing to do for taxpayers.