Lieutenant Governor Duffy Joins County Executive, Mayor and President/CEO of the Orange County Chamber of Commerce in Montgomery to Discuss How Plan Would Lower the Cost of Government for Taxpayers
Albany, NY (February 8, 2012)
Lieutenant Governor Duffy today joined Orange County Executive Ed Diana, Middletown Mayor Joe DeStefano and President/CEO of the Orange County Chamber of Commerce Dr. John D'Ambrosio to discuss how Governor Andrew Cuomo's mandate reform proposals will save Orange County taxpayers approximately $18 million over the next five years and his pension reform proposal will save $1.4 billion 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.
Lieutenant Governor Duffy said, "The 2012-2013 Executive Budget finally offers a sensible plan to relieve New York's local governments of the most exhausting state mandates. For too long, these unfunded mandates have been pushed on to struggling taxpayers and even forced many to leave our state. Under Governor Cuomo's mandate relief plan, Orange County will save almost $18 million over the next five years plus long-term savings of $1.4 billion over the next three decades. Getting rid of these costs will allow municipalities to invest tax dollars in what New Yorkers really need – and that is jobs. We need to focus on recovering local economies, and I commend Ed, Joe and John for their hard work."
Orange County Executive Ed Diana said, "I appreciate the Governor's recognition of the heavy burden that unfunded mandates place on counties and municipalities. As Orange County Executive and president-elect of the NYS Association of Counties, I look forward to working with him to make the structural changes necessary to relieve future generations of this burden."
Middletown Mayor Joe DeStefano said, "The Governor's budget is a fiscally responsible financial plan that protects hard-working New Yorkers and reforms the way the state spends taxpayer money. We need targeted relief, like pension reform, which will save Orange County $1.4 billion over the next few decades and welcome an executive budget which invests in the State of New York in order to create jobs, provides the much-needed mandate relief for local governments and puts the state on a path towards growth."
Dr. John D'Ambrosio, President/CEO of the Orange County Chamber of Commerce, said," Governor Cuomo and Lieutenant Governor Duffy understand the importance of being a partner to private business. This year's Executive Budget allows for mandate relief, pension reform and other initiatives that will ultimately transform the business climate in New York State by creating a business friendly environment and creating jobs. I commend the Governor for his commitment to New York State and its taxpayers."
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 Orange County.
|SFY12/13||SFY 13/14||SFY14/15||SFY 15/16||SFY16/17||5 Year Total|
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, Orange County would save $1.4 billion 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, Orange County would save $1,670,900 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, Orange County would save $4,797,000 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.