Mineola, NY - Nassau County Executive Thomas R. Suozzi and Westchester County Executive Andy Spano today urged newly re-elected Albany Legislators to pass real Medicaid reform in 2005 Session. Moody's Investor Service's recently released a report entitled, Moody's Maintains Negative Outlook on New York County Sector which states that the predominant factor driving the negative outlook is, "the high percentage of non-discretionary expenditures, which include expanding costs of local Medicaid share, employee wages, and health benefits, and pension contributions."

In the report, Moody's mentions that 53 New York State Counties out of 62 counties are trouble and will face additional rating downgrades and negative rating outlooks because substantial changes by the New York State Legislature, called the "most dysfunctional legislature in the country" by the Brennan Center at NYU School of Law, "are unlikely in the near term."

"Fortunately for the taxpayers of Nassau County, on October 29th, the Nassau County Legislature unanimously adopted my second consecutive "no tax increase" budget," stated County Executive Suozzi, "Our main area of concern lies in the fact that New York State local taxes are already 72% above the national average, because New York is the only State in the nation that requires the counties to pay such a huge amount of Medicaid costs."

Medicaid costs Nassau County twice as much as it collects in general fund property taxes. The cost of Medicaid to local property taxpayers in Nassau County is $281 million in 2005 and is estimated to rise to $319 million in 2006. The Nassau County General Fund property tax levy in 2005 is only $126 million.

"The case for Medicaid reform has been made by county governments throughout the state," said County Executive Spano. "In Westchester, the year-to-year growth of Medicaid is fast outpacing the county's ability to pay. The projected increase in the Westchester County share of Medicaid for 2004 is $16.4 million. Medicaid will cost Westchester County taxpayers $220.5 million in 2004. Another double digit increase is projected for 2005. The current levels of growth cannot be sustained and should not continue to be borne by the county property taxpayer. It is imperative that the Legislature and the Governor enact real programmatic and fiscal reforms to the Medicaid program in 2005."

According to the New York State Association of Counties (NYSAC), from 1999-2003, county taxpayers had to fund almost a 50 percent increase in Medicaid. New York's Medicaid program is the most expensive in the nation at $42 billion annually. The total local share of Medicaid climbed from $3.7 billion in 1999 to more than $5.5 billion in 2003. Using current rates of growth, the Association estimates the local share will reach a staggering $7.5 billion in 2005. Only 20 states pass along any portion of Medicaid costs to the counties. Of those states, New York's local share stands out as the highest burden charged to counties as New York is one of only two states--the other being North Carolina--where the counties are required to fund every Medicaid service.

"According to NYSAC, because of the New York State formula, the average property tax increase for all New York counties this year was 10.8%," stated Suozzi, "This is unacceptable and if Medicaid relief is not passed in Albany in the 2005 Legislative Session, the double digit increases in the county share of Medicaid costs can no longer be sustained."

"Medicaid reform is a about the survival of county governments," said Erie County Executive Joel A. Giambra. "That's why I've asked Governor Pataki to appoint a group of county executives and members of the State Legislature to work on finding real and meaningful Medicaid reform. Simply put, county leaders of both parties are struggling to maintain county services."

Onondaga County Executive Nicholas Pirro said all the dire predictions regarding Medicaid's impact on New York's counties financial health are coming true. "The ability of counties to continue to provide basic services and meet their financial obligations is seriously jeopardized unless Albany acts in the upcoming legislative session to reform Medicaid and reduce its impact on county property taxpayers." Pirro added that Albany fails to get the message that the state is poised to collapse under the weight of its inaction.

Currently, Westchester County has the highest overall bond rating of any county in New York State and since 2002 Nassau County's bond ratings have been upgraded into "A" ranks by all three Wall Street credit rating agencies for the first time in a dozen years. Nassau County is also the only municipality to receive seven bond upgrades, the most of any municipality during that period.