Lieutenant Governor Duffy Joins County Executive, Chair of the Genesee County Legislature, Mayor and RBA President and CEO at the Rochester Business Alliance to Discuss How Plan Would Lower the Cost of Government for Taxpayers
Albany, NY (January 26, 2012)
Lieutenant Governor Duffy today joined Monroe County Executive Maggie Brooks, Chair of the Genesee County Legislature and NYSAC President Mary Pat Hancock, Rochester Mayor Thomas Richards and RBA President and CEO Sandra Parker to discuss how Governor Andrew Cuomo's mandate reform proposals will save Monroe County taxpayers more than $36 million over the next five years and his pension reform proposal will save $2.5 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, "For years, cities, towns and school districts – including the City of Rochester where I was Mayor – called upon the state government to provide financial aid for increasing state mandates imposed on them with no additional funding. The Governor meant what he said that we are serious about Mandate relief. The Governor’s proposed budget will phase out the growth costs of Medicaid over five years for the counties and reform our state pension system now. As a result of the Mandate relief package, Rochester will be able to save over $36 million. I applaud County Executive Mahoney, Chair of the Genesee County Legislature Mary Pat Hancock, Mayor Richards and Sandy Parker, President of the RBA for your leadership and look forward to working with them on making this state a better place to live and do business for all New Yorkers."
Monroe County Executive Maggie Brooks said, "As a long-time advocate for mandate reform, I am encouraged by Governor Andrew Cuomo’s strategy to take on some of Albany’s most burdensome mandated programs in the coming year. Several of the Governor’s proposals, particularly a hard cap on annual growth in the local share of Medicaid, will do a great deal to better protect taxpayers in our community and all across New York State. Because these measures stand as the most significant progress towards real mandate reform in recent memory, I look forward to working closely with Governor Cuomo, and our entire local State Legislative Delegation, to bring his proposals through to fruition."
Mary Pat Hancock, Chair of the Genesee County Legislature and NYSAC President, said, "Governor Cuomo's 2012-2013 Executive budget demonstrates his commitment to county taxpayers. By taking over the growth costs of Medicaid, reforming the Preschool special education and Early Intervention programs, Genesee County will save over $2 million over the next five years. The Governor is ensuring that government, at all levels, works efficiently and effectively for the people of the state of New York. I urge our representatives in the state legislature to pass this budget so that we can start enacting these reforms as soon as possible."
Rochester Mayor Tom Richards said, "The Executive budget put forward by Governor Cuomo takes real steps to address the problems facing Rochester. I applaud the Governor and Lieutenant Governor Duffy for including a much-needed “spin-up…#157; in Aid and Incentives to Municipalities for our City. Bob Duffy said he would deliver for Rochester in his capacity as Lieutenant Governor and he has done just that. It is great to have him here with us today. I also want to commend Governor Cuomo on his mandate relief proposals. In particular, the proposed Tier VI pension reform. If pension costs continue unchecked, financial solvency is at risk for many municipalities in New York. The Governor has prepared a fiscally responsible budget proposal and I look forward to working together to see its provisions enacted."
Sandra A. Parker, President and CEO of the Rochester Business Alliance said, "We are pleased to see mandate relief being given some serious attention. We support Gov. Cuomo’s proposal for mandate relief, and urge the state’s legislators to do the same, particularly in the area of pension reform and the switch to a defined contribution plan. And we look forward to the upcoming recommendations from the mandate relief committee, proposals we hope will move us toward meaningful reform and bring financial relief to our local governments, school districts and the taxpayers that support them."
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 Monroe County.
|SFY12/13||SFY 13/14||SFY14/15||SFY 15/16||SFY16/17||5 Year Total|
In addition, Genesee County will save a total of $1,514,337 over five years from the state take-over of Medicaid Growth costs.
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, Monroe County would save $2.5 billion over the next 30 years and Genesee County would save $200 million over 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, Monroe County would save $1,731,600 over the next five years and Genesee County would save $147,000 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, Monroe County would save $6,056,000 over five years and Genesee County would save $707,000 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.