Lieutenant Governor Duffy Joins County Executive, Town Supervisor and President and CEO of the Greater Binghamton Chamber of Commerce at Binghamton University to Discuss How Plan Would Lower the Cost of Government for Taxpayers
Albany, NY (February 6, 2012)
Lieutenant Governor Duffy today joined Broome County Executive Debra Preston, Vestal Town Supervisor John Schaffer and President and CEO of the Greater Binghamton Chamber of Commerce Lou Santoni to discuss how Governor Andrew Cuomo's mandate reform proposals will save Broome taxpayers approximately $8 million over the next five years and his pension reform proposal will save $619 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 unfunded mandates in New York have become unsustainable for our local governments," Lieutenant Governor Duffy said. "This year, the Governor's budget provides counties and municipalities the relief they need to continue serving their businesses and residents. By saving $8 million over the next 5 years and $619 million over the next 30 years, Broome county taxpayers will be able to put those savings towards expanding their businesses and creating jobs. This mandate relief is essential, especially if we want to get our economy back on track. I thank County Executive Preston, Town Supervisor Schaffer and President Santoni for their endorsement and hope that others will join them in supporting the Governor's budget."
Broome County Executive Donna Preston said, "To continue providing quality county services without unjust tax hikes, mandate relief is crucial to Broome County. We need all the help we can get from the state, and is help on the way in the form of the Governors mandate relief package. I applaud Governor Cuomo and Lieutenant Governor Duffy for their leadership and anticipate more bold proposals from their administration."
John Schaffer, Town Supervisor of Vestal, said, "It is an honor and privilege to work with the governor and Lieutenant Governor of New York. The new pension tier will save Broome County municipalities hundreds of millions of dollars in years to come, and Vestal will certainly benefit from those savings and be able to put the money towards essential services. I thank Lieutenant Governor Duffy for coming to Vestal and look forward to working with the Cuomo Administration in passing this budget."
Lou Santoni, President and CEO of the Greater Binghamton Chamber of Commerce, said, "While New York has made great strides to recover from years of fiscal irresponsibility, Medicaid and the public pension system continue to be the albatross around the neck of taxpayers. The Governor's proposal for pension reform with the addition of a Tier VI is a strong proposal that will begin to address the long-term structural reforms that are desperately needed in the Southern Tier. As the property tax cap emphasized the need for meaningful mandate relief, a cap on Medicaid must place the same emphasis on reform of the system entirely. I am confident that given the Governor's approach thus far, these are two areas where we will begin to see positive change."
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 Broome County.
|SFY12/13||SFY 13/14||SFY14/15||SFY 15/16||SFY16/17||5 Year Total|
|Broome||0||$317,348||$970,851||$ 1,918,594||$ 2,866,336||$6,073,129|
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, Broome County would save $619 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, Broome County would save $339,700 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, Broome County would save $1,372,000 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.