Our state has the bad habit of mandating that programs and services and their associated costs be covered by local municipalities. While this has enabled the state to keep the costs of these programs from impacting the state budget, they put substantial stress on property owners who have to pay property taxes to pay for these mandated programs.

The Wall Street Journal has called New York the “Tax Capital of the World.” Sadly, this distinction is well deserved. Our high local taxes are due in part to unfunded mandates passed down by federal and state government. From 2000-2009, over 100 bills containing unfunded mandates were enacted into law for a total cost to municipalities of $67 billion.

By far, New York’s largest unfunded mandate is Medicaid spending. According to the New York State Association of Counties, counties are mandated to deliver and fund approximately $7 billion of Medicaid costs annually. Interestingly, New York is the only state in the nation that requires property taxpayers to fund Medicaid at the local level. In addition to Medicaid, counties are also required to fund at least a 40% share of the following programs: preschool special education, early intervention programs, child protective services, youth detention facilities, food stamps, indigent legal defense services, and probation. Also, temporary assistance for needy families (TANF) is required to be 25% funded at the county level.

Some local funding of these programs is appropriate. Counties are in the best position to administer the programs and therefore they are in the best position to ensure that the programs are being managed efficiently. Further, it is only fair that counties with higher participation in these mandated programs pay a higher amount. However, the state has done little to provide counties with the flexibility to run these programs. Indeed, for Medicaid alone, it took the state several years to undertake a program to combat Medicaid fraud--something the counties were advocating for since I first was elected to the Assembly.

While this picture is bleak, it unfortunately is getting worse. The costs of unfunded mandates continue to grow as budgetary problems persist at the state level. In the recently finished state budget, the state shifted another additional $100 million in costs to the local level. In addition, due to cash flow problems, the state has been slow to reimburse counties for its share of the mandated services provided. For example, Oswego County is owed $12 million for state services rendered by the county.

To reign in these unfunded mandates and help provide relief to our overburdened property taxpayers, the first thing the state should do is pass legislation that would require any state mandate that is imposed on a locality or a school district and costs more than $10,000 annually (or $1 million statewide) to be funded by the state. While I am pleased to be a sponsor of this legislation for several years, I am troubled that the majority in the Assembly will not allow this legislation to come to a vote on the floor of the Assembly.

Further, there has been a lot rhetoric discussed and bills proposed regarding a property tax cap. This is a good idea which I will support, but it will only work if it is coupled with mandate relief. If counties do not have control over the programs they must provide and their costs, and they are limited to the revenue they can raise, inevitably they will get pinched—that is, their costs for paying for these mandates will exceed the revenue raised. The consequence of this happening may be worse than the high tax situation that is trying to be addressed through a property tax cap.

Many mandated programs are worthy programs that provided critical services to citizens of New York state. However, we will continue to face high property taxes unless the state addresses the funding of these programs, provides more flexibility to counties and stops shifting costs from the state to localities.

If you have any questions or comments on this or any other state issue, or if you would like to be added to my mailing list or receive my newsletter, please contact my office. My office can be reached by mail at 200 North Second Street, Fulton, New York 13069, by e-mail at barclaw@assembly.state.ny.us or by calling (315) 598-5185.