State Mandates Revealed as Tax Cap Works

In the last state legislative session, we passed a property-tax cap. Largely, municipalities and school districts have stuck to the tax cap. According to a report from the governor’s office that was issued in September, 81 percent of local governments that reported a proposed levy stayed within the cap and 92 percent of schools kept at or below the cap. With this new law, local governments cannot raise their levies by more than 2 percent or the rate of inflation, whichever is lower, each year unless taxpayers (in the event it is a school district) or local governments choose to override the cap with a vote.

Now that we have the tool of the tax cap in place, the next step is to reign in our many state mandates, which drive up property taxes and place huge burdens on our local governments and schools. Relieving our local governments and schools from these costly mandates will permit them to stay within the tax cap and likewise prevent huge increases in property taxes. These tax increases have proven to impede job and business growth time and again.

I’ve talked before about state mandates. It’s a cost or regulation that schools, counties, and local governments inherit as a result of state or federal law. Someone in Albany or in Washington has an idea, often with good intentions. What is not fully considered at the time these “improvements” pass is the associated costs, which localities are forced to pick up the tab. 

The New York State Association of Counties (NYSAC) released a report recently that outlines recommendations for mandate relief. According to the report, counties in New York are required to pay for more than 40 state-mandated programs using local tax dollars. One of the ways mandate relief can be accomplished, the report makes clear, is to allow counties more decision-making power. 

For example, New York has the most expensive Medicaid program in the nation. Last year in Albany, we were able to pass meaningful Medicaid reform, and slow the growth of Medicaid spending by passing a cap to reduce the counties’ contributions to the total program cost. This was a huge accomplishment, as many counties worried how they could keep pace with the rising costs. This cap will be fully effective in 2015 and freeze Medicaid costs for counties. But the study suggests further streamlining Medicaid so it’s more in line with other states, and giving counties more choices on determining health services that meet federal mandates.

NYSAC also suggests reforming eligibility, as more health-care options become available through the federal government’s Affordable Care Act. New York currently provides Medicaid coverage to populations that exceed the new federal income thresholds as well. The report also suggests streamlining transportation for preschoolers and allowing counties to have coordination among school districts and parents.  

As we look forward to the upcoming session in January, one of my goals is to build on the success of last year. Last spring we were able to consolidate, merge, or eliminate nearly 30 government agencies and offices. We also closed $13.5 billion in budget shortfalls over two years without raising taxes. The legislature also addressed pension reform, as a new Tier VI passed. I’m hopeful that this year we can add to this more sensible financial path we’ve begun and repeal many of these unfounded mandates.       

William (Will) A. Barclay is the Deputy Minority Leader in the New York Assembly and the Republican representative of the 124th Assembly District, which encompasses parts of Oswego and Onondaga counties, including Oswego, Fulton, Camillus, and Skaneateles. Contact him at barclaw@assembly.state.ny.us or call (315) 598-5185.