02.16.09

STANDING WITH GREENE COUNTY LEGISLATORS:SCHUMER ANNOUNCES: FED ECONOMIC STIMULUS PLAN WILL BRING $5.3 MILLION IN DIRECT BUDGET AID FOR GREENE COUNTY; SAYS FUNDING WILL EASE CRUSHING PROPERTY TAX BURDEN ON HOMEOWNERS

Schumer: This Money Will Help Alleviate Greene County From the Staggering Medicaid Costs They Are Forced to Pay & Help Counties Avoid Property Tax Hikes Schumer Led Push In Congress to Have Economic Stimulus Plan Deliver Aid Directly to NYS Counties Schumer: Counties Forced to Pay For Medicaid Will Get Their Share of Medicaid Relief

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With New York State counties and localities facing historic budget deficits, U.S. Senator Charles E. Schumer announced that Greene County will receive $5.3 million in direct budget relief, according to the Government Accountability Office, of the Federal Medical Assistance Percentage (FMAP) to help stave off property tax hikes and close budget gaps. Schumer successfully pushed in Congress to ensure that counties and localities struggling with rising numbers of Medicaid recipients and increased costs of Medicaid health services get their share of Medicaid relief as demand for health care grows during the economic crisis. Schumer said that this relief to counties will flow through local communities, creating jobs, financing the purchase of medical supplies and services, and help to ease budget gaps and prevent property tax hikes.

 

"There are no twoways about it, we should give direct aid to counties struggling to ease big budget gaps and avoid property tax hikes on families," Schumer said. "Our counties are overburdened by Medicaid costs and they should get their fair share of relief in the economic recovery plan. I am so glad we were able to successfully secure millions of additional dollars directly to the counties to help them in these very tough economic times allowing those dollars to instead be used to keep property taxes down."

 

The economic downturn has strained county and state budgets alike. While state budget concerns have been well publicized, counties have also been faced with huge budget gaps and some have been forced to raise local property taxes and make severe budget cuts. At the same time, the downturn has triggered declines in tax revenue that inhibit states' and counties' ability to meet rising Medicaid program costs as enrollment spikes during economic hard times. Since the enactment of the Medicaid program in 1966, counties, including Greene County, in New York State have been required to share in the costs of services. New York is one of seventeen states where local governments share with the state in Medicaid participation. New York and North Carolina are the two states where local government pays the highest percentage. Counties are mandated by the state to contribute approximately $7 billion annually or about 32 percent of the nonfederal share of the State's Medicaid Program.

 

Greene County expects to pay $9 million for Medicaid services in 2009, using an average of 49% of their property tax revenue to fund Medicaid obligations.

 

Recognizing that New York State counties are in dire need of direct fiscal aid and are forced to share the cost of Medicaid, Schumer a member of the Senate Leadership and the Finance Committee which has jurisdiction over Medicaid - fought to make sure that New York State counties and localities received direct aid from FMAP through the stimulus plan. Today, Senator Schumer announced that Greene County will receive up to $5.3 million in direct aid from FMAP in the economic stimulus plan.

 

Schumer 's legislative provision ensures that counties receive their share of the FMAP relief for their Medicaid programs. Without this provision, the entire increase in FMAP would have gone only to the state, providing no direct relief to the counties. Sending federal dollars directly to the counties will help stimulate local economies, creating jobs and financ the purchase of medical supplies and services that are greatly needed by Upstate New Yorkers. Numerous studies have estimated that federal Medicaid payments have a strong positive impact on state and local economies. Additionally, it will help to prevent already high property tax rates from skyrocketing even higher.

    

FMAP is a matching rate enacted in 1965 that determines the federal funding share for state Medicaid programs. The federal government matches state funds spent on Medicaid, based on the state's FMAP. The FMAP varies from state to state; and New York's FMAP is 50%. This means that for every dollar spent on Medicaid in New York, New York's share of the cost is fifty cents (this fifty cents, in turn, is split between the State and Counties and localities), while the federal government chips in the other fifty cents. Thirteen states have FMAPs equal to the 50 percent in 2009 (CA, CO, CT, DE, MD, MA, MN, NV, NH, NJ, NY, VA, WY). By law, the FMAP cannot be lower than 50 percent or higher than 83 percent.  The FMAP formula is designed to account for income variation across the states and is based on rolling threeyear average per capita income data for each state. The Department of Commerce's Bureau of Economic Analysis calculates FMAP annually.

 

In 2003, Schumer was successful in getting a share of FMAP for states during an economic downturn, of $10 billion in fiscal relief through a temporary FMAP increase of 2.95 percentage points for each state for five fiscal quarters. According to the Congressional Budget Office, more than half of the states reported that the 2003 increased matching rates enabled them either to avoid or delay making cuts or to make smaller cuts to their Medicaid program.

 

During an economic downturn, as state revenues become stagnant or decline, the number of Medicaid beneficiaries increases because of job losses and the health care coverage that comes with employment. Since all but one state have balanced budget requirements, according to Families USA, right now at least 43 states have faced or are facing budget deficits for the current 2009 fiscal year and or the coming 2010 fiscal year that, taken together, total $140 billion. In response to this extreme fiscal pressure, states are forced to dramatically cut budgets across the board.

 

As the secondlargest item in most state budgets, Medicaid programs and their eligibility levels, benefits, and provider reimbursements are at risk for cuts during a recession. Though the FMAP money must be used to cover Medicaid costs, the significant savings to the overall state budget that result from an FMAP increase could be used for a variety of purposes that are not limited to Medicaid.

 

Medicaid covered more than 60 million Americans in 2007, including almost 30 million children. As the economy weakens, more people become uninsured and many turn to Medicaid for health coverage.


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