PLATTSBURGH — It appears that the State Legislature will approve a property-tax cap before the session ends in a few weeks, but local government leaders say more than just a cap is needed.
Medicaid is the top target for reform among area county leaders.
"This is a very important first step to get a cap, but as I've said from the outset of this discussion that a cap will not be successful unless it is accompanied by serious relief from these expensive state mandates," City of Plattsburgh Mayor Donald Kasprzak said.
The State Senate and Assembly and Gov. Andrew Cuomo are on the verge of agreeing to a measure that will cap property taxes at 2 percent or the rate of inflation, whichever is lower, for municipal and school taxes.
The governor and the leaders of the legislature — Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos — have been negotiating a final deal and have said they expect to pass it by the end of session on June 20.
In the latest twist, Silver has added rent control for New York City and a five-year sunset on the cap to the proposed legislation.
The governor has been pushing for the cap for months, traveling the state drumming up support.
But many local leaders are worried that a cap without mandate relief will hamstring them in their efforts to continue to provide needed services.
Clinton County Administrator Michael Zurlo said that, without mandate relief, county governments will have to make some major changes.
Preliminary projections show that under a 2-percent cap, the county could only raise an additional $546,000 in tax revenue next year, while the cost of Medicaid alone for the county is projected to go up about $439,000.
"Just Medicaid would eat up most of the additional revenue we could raise," Zurlo said.
"Then we also have the many other mandates to pay for."
In order to make ends meet under a cap, many municipal leaders believe severe cuts will have to be made.
"There will be services in this county that will no longer be affordable or sustainable," Zurlo said.
Mayor Kasprzak said the outcome of a cap without mandate relief will not be pleasant.
"Without some relief our constituents will suffer," he said.
Association of Counties
The New York State Association of Counties is urging the state to totally take over Medicaid expenses, relieving upstate counties of the $2 billion burden.
Zurlo said such a takeover would give county governments much more breathing room.
"And, I'll do you one better; I'll even lower your taxes if they take Medicaid costs away from us," he said.
Of the county's roughly $27 million tax levy, $16.9 million, or 62 percent, of it is consumed by Medicaid costs.
"If we could be relieved of that burden, our taxpayers would greatly benefit."
In order to pay for the counties portion of Medicaid, NYSAC says the program can be offset with resources available through federal funding, taking advantage of new flexibilities in the health care reform act and savings from this year's Medicaid reform measures.
Assemblywoman Teresa Sayward (R-Willsboro) said she hopes the state leadership is serious about providing mandate relief on the heels of the tax cap.
"This bill is a beginning. More needs to be done," she said.
"If we can get this cap in place and remove some of the regulations, taxpayers will be the winners."
Sen. Betty Little (R-Queensbury) agrees.
"What is important is the mandate-relief component, providing local governments and schools the flexibility they need without the Albany strings attached," Little said.
Mandate relief needed
Assemblywoman Janet Duprey (R-Peru) said she was disappointed that the cap legislation does not mention mandate relief, but will support it.
"I don't support all the provisions in the bill, but feel it is a reasonable compromise to some of the other legislation and a good first step in providing tax relief to residents and businesses," Duprey said.
The proposed bill does allows assessments on new construction to be excluded from the cap so local governments and school districts can benefit from new development.
Duprey said she doubts rent control will be removed from the bill because Assembly members from the city have too much weight.
"In reality it appears the 65 Assembly members who are not affected by the tax cap, but are concerned with rent control, will probably not pass this bill unless the two are addressed," Duprey said.
"The good news for taxpayers is that it seems almost certain there will be a tax-cap proposal passed and signed into law this year, which will provide real property-tax relief."
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