As chief executive of a county with a budget larger than those of 11 states, I've managed through some challenging situations. But during the current economic crisis, I'm doing everything wrong.
Like Gov. Paterson and Mayor Bloomberg - and hundreds of other executives who are staring at massive projected budget deficits - I'm cutting jobs, eliminating programs and, in the case of Nassau County, reducing capital spending and raising property taxes for the first time in five years.
We have to. Because - unlike the federal government - states and localities must, by law, balance our budgets every year, leaving us no choice but to make difficult decisions that help undo national efforts to stimulate the economy.
That's why I support Senator Charles Schumer's efforts to increase federal Medicaid matching funds, known as the Federal Medical Assistance Percentage (FMAP). An increase in FMAP would bring millions more in revenues to Nassau County. Medicaid is the single largest mandated program in county budgets, representing $2 billion annually for counties across the state outside New York City.
I am proposing a plan that would provide immediate budgetary relief to states and, where applicable, local governments that contribute to the cost of the program. Given the rising numbers of unemployed Americans, we would provide a framework for preserving health coverage for the unemployed. And at the same time, we would help fulfill a major policy commitment made by President Obama: to develop a national health insurance plan.
The plan is simple and would be implemented in two phases. First, beginning in 2009, the federal government would start a three-year, phased-in assumption of the state and local share of Medicaid costs. By assuming one-third, or approximately $50 billion, of state and local costs each year, plus inflation, at the end of three years, the Medicaid program would be fully federally funded. The benefit to each state would be proportional to its Medicaid expenditures, resulting in all states being treated fairly. In New York, for example, this proposal would relieve the state of more than $7 billion.
Equally important - and required for any state looking to get federal funding - would be Phase II of the plan: dramatic cost reductions. Medicaid spending has been out of control, especially in New York. Participating states would have to combat fraud and abuse; develop programs to prevent, detect and manage illness; reform long-term care, and eliminate minority health disparities, among other steps. This would be woven in with the development of a national health care program, which the new administration and Congress will be working together to forge.
New York State and local governments need our federal partner as we confront the most serious economic crisis since the Great Depression. In the war to save America's economy, the local, state and federal governments need to pull in the same direction, which will ultimately benefit our already-overburdened property taxpayers.