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County taxes and state-mandated services


A few years ago, Sullivan County legislators decided they wanted taxpayers to have a better idea about how their taxes are spent, so they decided to present a partial breakdown of spending on property tax bills.

The biggest expenditure by far for individual taxpayers is the contribution to the federal Medicaid program, which provides healthcare to low-income and no-income families and individuals. In 2015 in Sullivan County, the total county property tax revenue was $57 million, and of that $19.9 million went to funding Medicaid.

This arrangement of requiring counties to pick up a portion of Medicaid costs exists only in New York State and North Carolina. In all of the other 48 states, the cost is borne entirely by the state and federal governments, and counties aren’t required to kick in.

While the state in 2015 capped the amount of money counties are required to provide, it is still a significant cost to them. In fact, the cost of Medicaid, along with other state-mandated programs such as public assistance for adults and families, indigent criminal defense legal services and preschool special education—costs that counties in most other states are not required to bear—is one reason New York has the second highest tax rate (property and income) in the country.

There is certainly a need for these programs and services, but paying for them at the county level means that poor, rural counties such as Sullivan suffer more of a burden than their wealthier counterparts. First, there is a higher percentage of people living in poverty who need the services provided in counties like Sullivan. In 2013, for instance, 25% of Sullivan County’s population was on Medicaid vs. only about 16% in Westchester. In addition,  even among those households not needing Medicaid or other social services, property taxes take up a larger proportion of their budgets in poorer counties, making the tax harder to pay.

There is a similar situation with the funding of legal representation for poor or indigent residents who are charged with a crime but who can’t afford an attorney. As the situation exists now, counties provide about 90% of the funding for indigent legal representation.

In 2007, five counties and the state were sued by 20 criminal defendants because they claimed they did not receive adequate legal representation. The case was settled in 2014. The settlement provided that the counties would spend more money on indigent legal representation and would make other changes such as limiting the caseload of public defenders.

As a response to the settlement, the state legislature unanimously passed a bill that would expand the reforms and implemented them statewide. It would have also transferred the cost of the program from the counties to the state over a period of seven years.

On New Year’s Eve, Gov. Andrew Cuomo vetoed the legislation, saying it would cost the state $800 million, and $650 million of the cost had nothing to do with the reforms that grew out of the legal case. Cuomo said in his veto message, “This bill is nothing more than a backdoor attempt to shift costs from the counties to the state taxpayers under the guise of indigent defense.”

It’s not hard to argue that the since the U.S. Supreme Court decided the case of Gideon v. Wainwright in 1963 that everyone has a fundamental right to legal representation and that the cost of that representation should be picked up by the state government, or perhaps even the federal government. But heaping that burden on the backs of county taxpayers rather than spreading it over all state taxpayers, including wealthy and poor areas alike, is disproportionately onerous to the residents of poor, rural counties like Sullivan.

While Cuomo may have a point that the bill, which was passed unanimously by the Senate and Assembly, is too expensive, he does seem to be able to find funds for projects that are his idea, such as replacing the Tappan Zee Bridge or knocking down and rebuilding LaGuardia Airport or giving the Jacob Javits Center in Manhattan a billion-dollar makeover.

Cuomo has said his proposed 2017 budget will include statewide proposals addressing the public defender question, and he seems inclined to agree with the general idea that there should be statewide standards. He has not said much about Medicaid, and it’s still not clear what the incoming administration of President-elect Donald Trump will do about expanded Medicaid payments to the state as part of the Affordable Care Act.

But whatever happens, our view is that state or state and federal taxpayers, not county taxpayers, should eventually fund both programs.  

Cuomo’s phone is 518/474-8390, and the website is www.governor.ny.gov.


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