Assemblymember Cahill Reacts to 2005-2006 Executive Budget Proposal

January 19, 2005

Assemblymember Kevin Cahill (D Ė Ulster, Dutchess) was disappointed with Governor Patakiís 2005-2006 Executive Budget Proposal released yesterday, saying, "The budget presented by the Governor would close a lot of doors for New Yorkís families."

Mr. Cahill went on to add, "In his budget address, the Governor spoke a lot about choice. I think it is clear from the plan presented yesterday that the Governor has chosen to place the burden of the Stateís financial woes squarely on the shoulders of working New Yorkers." The Governorís spending plan calls for drastic cutbacks in spending on health care and college financial aid, while at the same time raising public college tuition and taxes on hospitals and long-term care providers.

The Governor has proposed cutting over $1 billion in State spending on health care. Hospitals and nursing homes would be forced to pay higher taxes while at the same time enduring cuts to their Medicaid reimbursement rates. The Family Health Plus Program, which currently provides health insurance to over 340,000 people, is facing a proposed reduction of $142 million. These cuts would come from the elimination of mental health benefits. Participants in the program will also be hit with a $250 co-pay for emergency room visits.

"We all want to find a solution to the Medicaid crisis our counties are facing," said Mr. Cahill. "Unfortunately, the Governor has once again made the wrong choices with these drastic cuts to Family Health Plus and our already struggling hospitals and nursing homes. Health care is the Ulster County economy. The Governorís cuts to Medicaid reimbursement rates and his increased taxes on hospitals and nursing homes strike right at the heart of the livelihood of countless families residing in the Hudson Valley."

Last year, Assemblymember Cahill authored the Medicaid Waiver Law which allows New York State to provide home and community-based services to people with disabilities who would otherwise require institutional care. "It has been estimated that if just one percent, or 1,300 of the individuals currently residing in nursing homes were transitioned into integrated settings, this measure could cut Medicaid expenditures by more than $25 million in the first year alone and more than $380 million could be saved during a five-year period," said Mr. Cahill. "The Governor needs to be looking more towards solutions like these, rather than hacking away at the budgets of health care facilities and the benefits of the uninsured."

"It is of the utmost importance that the Assembly, the Senate and the Governor work together to alleviate the burden that is making health care unaffordable across the state," Mr. Cahill noted. "I am glad to see that the Governor has at least taken a step towards open and accountable health care budgeting by finally answering the Assemblyís repeated calls to place the multi-billion dollar Health Care Reform Act on budget."

College students were once again victims of a woefully inadequate higher education spending plan. For the second time in the past three years the Governor has sought to raise tuition at public colleges. SUNY students would see an annual increase in tuition of $500, on top of the $950 increase enacted just two years ago. A $500 increase would run SUNY tuition dangerously close to the $5,000 maximum grant available under the state Tuition Assistance Program (TAP) which the Governor has once again proposed slashing. In each of the past three years the Legislature has soundly rejected the Governorís attempt to hold back one-third of every eligible studentís TAP award. This year, rather than presenting a sensible solution to the financial hurdles New York students must overcome, the Governor wants to take half of all TAP awards from eligible incoming students. In addition, the Governorís plan fails to sufficiently boost State aid for public four-year universities and community colleges.

"Instead of raising tuition, cutting back on financial aid, SUNY funding and all of higher education the Governor should join us in seeking to expand state support to our colleges and universities," said Mr. Cahill. "The Governor never ceases to astound me with his college funding proposals. The Legislature has repeatedly rejected his plan to reduce TAP awards by one third. Why would he ever think we would accept a 50 percent reduction?"

"The Governor spoke about fiscal integrity and a forward-looking budget in his address," Mr. Cahill pointed out. "Proposing to annually raise tuition while cutting back on financial aid is one of the most fiscally irresponsible moves one could make with regards to the vibrancy of New Yorkís economy. Our college graduates are already among the most indebted in the nation. If we continue to force them to take on more and more debt, our economy is going to suffer. Our young people will be unable contribute to the tax base after making their monthly loan payments, if they can afford to continue to reside in New York at all."

The Governorís budget includes over $2.5 billion in higher taxes and fees. On top of the aforementioned "sick tax" on hospitals and nursing homes, the Governor would also like to continue imposing the sales tax on clothing that was supposed to be phased out this year. As part of his transportation plan, Governor Pataki seeks new and increased DMV fees totaling $290 million, including huge increases for car registrations and a 40 percent increase in the state mortgage tax for counties located in the Metropolitan Transit Authority region, which includes Dutchess County.

"It is unconscionable that at a time when housing costs are skyrocketing in the Hudson Valley, the Governor is actually looking to make it even harder for families to buy and sell their homes with his shortsighted proposal to increase the mortgage tax," stated Mr. Cahill. "These fee increases coupled with the extension of the sales tax on clothing are especially disturbing when you consider that the Governor has simultaneously put forth a tax cut for the wealthiest 2 percent of New Yorkís residents. The Executive must step forward and join the Assembly in making working families the top priority instead of imposing unaffordable tax cuts for a few in the face of billion dollar deficits."

Assemblymember Cahill does support the Executiveís proposal to increase aid to small cities, such as the City of Kingston, but was disappointed with the majority of his local aid agenda. "The Governorís economic development plan leaves much to be desired," said Mr. Cahill. "I urge that he work with the Legislature to reform our existing Empire Zones Program so that it serves the communities it was originally intended to help." Mr. Cahill also expressed concern that the Governorís plan to cap Medicaid costs on the county level amounted to a "hollow promise." The Medicaid package caps spending at 2005 levels with built in annual cost of living increases that the counties must bear, while at the same time cutting back on essential services.

"Devastating cuts to health care services are not going to solve the Medicaid crisis," Mr. Cahill pointed out. "The Governorís first step should be in the direction of his friends in Washington to ask for New Yorkís fair share of Medicaid funding. As leaders, we have a responsibility to the real property taxpayers in this State to take Medicaid funding off of their local tax plate and shift it to state generated wealth based tax support."

"A healthy and educated citizenry is the key to the future of this Stateís economic viability. Governor Patakiís budget proposal attacks these two basic premises," said Mr. Cahill. "Despite the recent Court of Appeals decision granting the Governor unprecedented powers in the budget making process, I and my Majority colleagues in the Assembly will fight hard to bring the Governor back to the table to negotiate a budget that reflects the needs of all hard working New Yorkers."