County Executive Mahoney, Mayor Miner and CenterState CEO President Rob Simpson Back Cuomo Mandate Relief and Pension Reform Plans

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Albany, NY (January 26, 2012)

 

Lieutenant Governor Duffy today joined Onondaga County Executive Joanie Mahoney, Syracuse Mayor Stephanie Miner and CenterState CEO President Rob Simpson to discuss how Governor Andrew Cuomo's mandate reform proposals will save Onondaga taxpayers more than $24 million over the next five years and his pension reform proposal will save $1.6 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 [2].

 

Lieutenant Governor Duffy said, "Governor Cuomo has delivered an Executive Budget for the next fiscal year that finally addresses the need for mandate relief in municipalities. The Governor’s budget offers state aid to relieve localities from burdening state mandates that have widened their budget gaps and increased financial pressure on local taxpayers. This mandate relief plan will allow Onondaga County to save over $24 million in the next few years, and billions more in the long term through a new tier in the pension system. Furthermore this plan includes changes to the state’s preschool special education system so that we can invest in our youngest and our future. I look forward to continuing our work with County Executive Mahoney, Mayor Miner, and CenterState CEO President Rob Simpson to make New York a place for our families and businesses to prosper."

 

Onondaga County Executive Joanie Mahoney said, "Governor Cuomo has proposed a budget and mandate relief plan that includes a gradual state takeover of costs in Medicaid growth and offers a new pension tier for future public employees. He has offered a practical financial solution that local governments, such as Onondaga County, have requested from the State for years. With this plan, Onondaga can save more than $24 million, providing a real boost to our community. I commend Governor Cuomo for this much-needed priority. Together we will move New York State as a whole towards a strong economic recovery."

 

Syracuse Mayor Stephanie A. Miner said, "It is great to have Lieutenant Governor Duffy here with us in Syracuse today. Governor Cuomo’s Executive Budget ensures that Syracuse will continue to receive our current level of New York State aid. In addition to steady financial support for municipalities, the Governor’s plan shows a willingness to reform pension and mandate systems that have been driving up costs and leaving cities like Syracuse in crisis. I am thankful the Governor has begun to confront these issues head-on and am confident that the Legislature and Governor will have another successful year."

 

Rob Simpson, President of CenterState CEO, said, "For years, every New York business and every resident of this state has been burdened by high taxes and runaway mandates with no relief from Albany. Governor Cuomo understands that for New York to once again be the Empire State, we must have a vibrant private sector, which is encouraged to grow in an environment where government is part of the solution, not part of the problem. I thank the Governor for his mandate relief proposals, and call on legislators to pass this legislation and let the private sector reinvigorate our region and 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 Oneida County.

 

	SFY12/13	SFY 13/14	SFY14/15	SFY 15/16	SFY16/17	5 Year Total
Onondaga	0	$845,858	$2,587,708	$5,113,820	$7,639,933	$16,187,319

 

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, Onondaga County would save $1.6 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, Onondaga County would save $982,000 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, Onondaga County would save $7,357,000 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.