Lt. Governor Duffy, Chemung County Executive Santulli, Elmira Mayor Skidmore, & Chemung County Chamber of Commerce Chairman Bentley Discuss Savings for Chemung Taxpayers from Governor Cuomo’s Mandate Relief and Pension Reform Plans

Lieutenant Governor Duffy today joined Chemung County Executive Tom Santulli, Elmira Mayor Sue Skidmore, and Chairman of the Chemung County Chamber of Commerce Ronald Bentley to discuss how Governor Andrew Cuomo's mandate reform proposals will save Chemung county taxpayers approximately $4 million over the next five years and his pension reform proposal will save $243 million over the next 30 years. To get more information on mandate relief and to get involved in the process, New Yorkers can visit www.NYGetInvolved.com.

"The 2012-2013 Executive Budget provides meaningful mandate relief for all of New York's local governments," Lieutenant Governor Duffy said. "Over the years, unfunded mandates and pension costs have skyrocketed, and the taxpayers have been left with the bill. The Governor's mandate relief package will help save Chemung county $4 million over the next five years and hundreds of millions of dollars for the next few decades. This is real money that can go towards funding the essential services provided by our municipalities. I thank County Executive Santulli, Mayor Skidmore and Chairman Bentley for their support and look forward to working with them this year."

Chemung County Executive Tom Santulli said, "I strongly support Governor Cuomo's proposed budget, which includes the beginning of much needed mandate relief to local governments. His plan, which calls for the state to fund the local growth of Medicaid costs over 3 years and the enacting of a new pension tier, will help to reduce the financial tax burden on local property taxpayers. I commend the Governor and Lieutenant Governor on their leadership and look forward to another promising year for New Yorkers."

Elmira Mayor Sue Skidmore said, "Pension costs are soaring and for local governments, it is a struggle to contain or control this budget item. I applaud Governor Cuomo for the creation of a new pension band tier that will equal about $243 million in savings to Chemung County."

Ron Bentley, Chairman of the Chemung County Chamber of Commerce, said, "To be competitive and business friendly, we must reduce the tax burden on our residents and businesses. The property tax cap is a step in the right direction but must be accompanied by relief from unfunded state mandates. We applaud the Governor's actions to provide this relief to local governments and strongly encourage our state legislature to partner with him and reverse years of decline in our state."

The Governor's Executive Budget closes the current $2 billion budget deficit with no new taxes or new fees. It also proposes sweeping mandate relief and pension reform that will save taxpayers and local governments billions of dollars.

Highlights of the mandate relief plan include:

• Creating a plan for the State to take over 100% of the costs of Medicaid growth that will be phased in over three years, saving local governments $1.2 billion over the next five years;
• Creating a pension reform plan that will save State taxpayers and local governments outside New York City $83 billion, and will save New York City $30 billion over the next 30 years

More specifically, the Governor proposed sweeping structural reforms to relieve local governments of State mandates that drive up local costs. These reforms, which address the largest cost-drivers for local governments, will help municipal leaders meet the pressures of the prolonged economic downturn, and will help local governments meet the goals of the property tax cap.

Reduce burden on counties by taking over Medicaid growth costs: Medicaid growth is a major cost driver for counties. In 2006, the State capped the amount of Medicaid cost growth that counties have to pay. Currently, the cap is 3% of growth; all growth over 3% is paid by the State. To provide significant fiscal relief to counties and to New York City, the State will phase in a 100% takeover of the costs of Medicaid growth. Effective April 1, 2013, the county cap will fall to 2% of Medicaid growth; in county fiscal year 2014, the county share will be reduced to 1%. Starting in county fiscal year 2015, the State will pay 100% of the costs of Medicaid growth. The takeover by the State of a greater share of local Medicaid expenses will save counties and New York City $1.2 billion over the next five years.

Below are the 5 Year (SFY) savings totals from the State take-over of the Medicaid Growth for Chemung County.

Enact pension reform: Next to Medicaid, pension costs are the most significant burden on local governments. The Governor called for a new tier in the State pension system that will save the State and local governments outside of New York City $83 billion and New York City $30 billion over the next 30 years. As a result of the pension reform, Chemung County would save $243 million over the next 30 years. The new pension plan would have progressive contribution rates between 4% and 6% with shared risk/reward for employees and employers to account for market volatility. It includes a voluntary option for Defined Contribution following the TIAA-CREF model. Employees taking this Defined Contribution will vest in this system after one year. This option will be portable. No current employees will be affected by the Governor's pension reform plan.

Enact reforms to the Early Intervention and Preschool Special Education Programs: The budget also reforms the Early Intervention program to reduce counties' administrative burdens and cut their costs by $99 million over five years. As a result of these reforms, Chemung County would save $80,900 over the next five years. In addition, the Executive Budget reforms the Preschool special education program to reduce costs for counties outside of New York City by $150 million over five years. As a result of the reforms made to the Preschool special education programs, Chemung County would save $584,000 over five years. The Executive Budget does not include any cuts to Early Intervention or Preschool special education services.

Aid to Local Governments: In addition to these reforms, the Executive Budget provides $715 million to local governments in unrestricted operating aid, and an additional $79 million in grants to promote greater efficiency.