The Toughest Challenge: Rising Healthcare Costs
Just as in 2003, every single dollar of the Erie County property tax levy - and every single dollar of Erie County's share of the total 8.25 percent sales tax - will be spent in 2004 on a combination of mandated programs and Erie County Medical Center subsidy. In fact, the 2004 total of mandated costs for which there is a local share is $362.08 million; the ECMC subsidy is $29.5 million, for a total of $391.58. Yet the total revenue from County property and sales taxes is only $386 million - creating a shortfall of over $5 million.
The largest single portion of this burden is the local-share cost of Medicaid. (The Federal government pays 50% of Medicaid; New York State pays 25%; the remaining 25% is paid by county governments.)
When it was first enacted in 1985, the "extra" one-percent sales tax was enough to cover the local-share cost of Medicaid. In 2004, there is a $50 million gap between local share Medicaid costs and revenues from the one-percent sales tax.
Measured as a share of the Erie County property tax levy, the picture is equally stark: the Erie County property tax levy will yield $128.3 million in revenue in 2004; the local-share cost of Medicaid in 2004 will exceed the property tax levy by $47 million. Just the cost of the local share of Medicaid will take every penny of the property tax, plus $47 million of the "extra" one-percent sales tax.
In fact, in 2004, mandates will cost $362.08 million. - not including the $29.5 million ECMC subsidy:
State Mandated County Share Expenditures
Mandated Social Services 2004 Proposed
Family & Safety Net Assistance 31.16
Child Welfare Services 13.71
DSS Other Programs & Costs 14.86
County Home 0
Total Social Services $235.06
Mandated Law Enforcement
Sheriff - Division of Jail Management $37.51
Indigent Defense 7.23
Probation & District Attorney 13.99
Total Law Enforcement $58.73
Other State Mandates
Services to Handicapped Children 17.12
All Other State Mandates 31.84
Total Other State Mandates $68.29
Total State Mandated Expenditures $362.08
That leaves every other County service - like parks, culturals, economic development efforts, snow removal, road and maintenance, public safety, worker retraining, and more - to be funded with miscellaneous revenues, including grants and fees. Only the Library system has a dedicated revenue, which is a percentage of the Erie County property tax levy.
As in 2003, in 2004 we estimate that one out of eight Erie County residents - more than 110,000 individuals - will be eligible to receive Medicaid.
The massive expansion of the cost of Medicaid - from $127.1 million in 2000 to over $175.3 million in 2004 - is a bill that Erie County has no choice but to pay. We did not create this cost increase, but we must fund it.
Medicaid local share 1998 - 2004e
Just as in 2003, Erie County will continue to press New York State officials to assist county governments in funding these growing costs in healthcare. If county governments do not receive State relief, Erie County in 2004 and beyond will have to choose between two unpalatable options of either raising new local revenue to pay for healthcare costs (which would be economically inappropriate) or reducing support for basic County services.