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NYS could withhold millions: County taxes would jump across Finger Lakes

New York’s county leaders are protesting the Hochul administration’s plan to keep part of the federal funding the state relays to counties and New York City to help shoulder their massive Medicaid costs.

The shift would start April 1st and withhold an estimated $626 million that the counties and city otherwise would get over the next year. Gov. Kathy Hochul disclosed the plan and its impact in her budget proposal this month but intends to make that change administratively, without legislative approval needed.

County officials say they’d struggle to cover losses that large in already-set budgets and almost certainly raise property taxes in 2024 as a result. The 57 counties outside New York City would lose a total of $281 million, according to estimates by the New York State Association of Counties.

Finger Lakes Partners (Billboard)

The move rekindles old tensions over Medicaid cost-sharing in New York, one of the few states that makes its counties contribute. The federal government pays much of the cost of medical bills through Medicaid, the health insurance program for the poor and disabled, and leaves the rest to the states. In New York, the state passes part of its share to the counties, which had long complained of ballooning costs.

The state quieted those concerns in 2015 by capping the counties’ payments and shouldering the cost increases.

What the Hochul administration now plans to do is keep extra federal funds known as enhanced payments that it had shared with the counties and New York City. It defends that move partly by noting that the state has saved counties billions of dollars since 2015 by capping their contributions. It also says it will spend the withheld funds on Medicaid program improvements.

The counties’ association is taking aim at the Medicaid plan by arguing it would undercut Hochul’s stated mission of improving affordability. Steven Acquario, the group’s executive director, told state lawmakers at a budget hearing on Wednesday that the losses would amount to average county tax increases of 7% statewide and drive up housing costs as a result.