[Congressional Record (Bound Edition), Volume 163 (2017), Part 7]
[House]
[Pages 9525-9529]
[From the U.S. Government Publishing Office, www.gpo.gov]




               ELIMINATE NEW YORK STATE MEDICAID MANDATE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2017, the gentleman from New York (Mr. Faso) is recognized 
for 60 minutes as the designee of the majority leader.


                             General Leave

  Mr. FASO. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days in which to revise and extend their remarks and 
include extraneous material on the topic of this Special Order.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  Mr. FASO. Mr. Speaker and my colleagues, I rise this evening with my 
colleagues from upstate New York to discuss a matter that is 
extraordinarily important to all of the people throughout New York 
State, but particularly to those who reside in New York State outside 
of New York City.
  New York State is one of the few States in America that requires a 
portion of its share of Medicaid costs, which is healthcare for the 
poor and the elderly, its share of Medicaid costs to be paid by local 
property taxpayers. It has now been 51 years that New York State, since 
the days of Governor Nelson Rockefeller, that New York State imposed 
this incredibly onerous burden on the local property taxpayers in our 
State.
  In fact, in the entire United States of America, there is 
approximately $9.5 billion being spent by local governments on Medicaid 
costs which, in virtually every other State, are paid for by the State 
government--$9.5 billion. But in New York State, our taxpayers pay $7.2 
billion of that $9.5 billion in Medicaid costs mandated by New York 
State, mandated by Albany.
  This is an outrageous burden. The county property taxpayers--those 
are homeowners and commercial property taxpayers in our State--pay over 
$2.2 billion each year in property taxes, in mandated costs, over which 
the county governments have no control whatsoever.
  So tonight, Mr. Speaker, I rise, and I am pleased to have organized 
this Special Order with my colleagues from New York State, to discuss 
this dire situation that our taxpayers endure and what our recommended 
solution is.
  Mr. Speaker, my colleagues and I were successful in including in the 
American Health Care Act a provision which would, as of 2020, eliminate 
the ability of Albany to impose this burden on local homeowners and 
commercial property taxpayers. It would improve the real estate values 
in our State. It would be one more reason for people to stay in New 
York rather than to flee New York.
  The thing that I hear from people over and over again in my district, 
in the 19th District in the Catskills and the Hudson Valley of New 
York, is their kids and grandchildren are being driven out of State 
because there are no jobs, and they are being driven out of State by 
high property taxes.
  One of the reasons for those high property taxes is the New York 
State Medicaid mandate. So, with Mr. Collins, Mr. Reed, Ms. Tenney, Mr. 
Zeldin, and Ms. Stefanik, we were successful in including in the 
American Health Care Act a provision which would, as of 2020, eliminate 
this burden on local homeowners and require Albany to do what other 
States, the 49 other States, do, which is to take control of its own 
Medicaid system and not impose these burdens on the counties.
  Mr. Speaker and my colleagues, you can see in the 11 counties that I 
represent in the Mid-Hudson and in the Catskills of New York State, 
over $224 million a year is coming out of homeowners' pockets, coming 
out of commercial real estate owners' pockets and going to pay for 
Albany's costs. We are ending that as of 2020 under the provision in 
the legislation that I have authored with Mr. Collins, Ms. Tenney, Mr. 
Reed, Mr. Zeldin, and Ms. Stefanik because we know that this burden is 
unjust and it is uncalled for.
  So, Mr. Speaker and my colleagues, I am delighted at this time to 
yield to the gentleman from western New York (Mr. Reed), from the 
Southern Tier.
  Mr. REED. Well, I thank the gentleman for yielding, and I thank the

[[Page 9526]]

gentlemen, Mr. Faso and Mr. Collins, for their leadership on this 
issue.
  Mr. Speaker, in my district, the 23rd Congressional District, where 
we sit on the border of the State of Pennsylvania, when you talk about 
the tax burden that is placed on my hardworking residents that are 
struggling, that are trying to pay utility bills, that are trying to 
pay for food to put on their tables, that are trying to take care of 
their families and put their kids through school, when you talk about a 
tax burden that is driven by the Medicaid shift in New York State to 
the local level, at our county level--a very unique circumstance across 
the country--to the tune of $145 million a year in each of the counties 
I represent, that type of burden is not sustainable.
  I thank the leadership of Mr. Faso and Mr. Collins for looking for a 
solution in the American Health Care Act that will alleviate this, that 
will once and for all shift this burden from our hardworking citizens, 
our hardworking taxpayers in western New York back to where it belongs: 
to our State capital, our State capital where they have mandated, under 
the Federal Medicaid program, essentially every optional service that 
is authorized under the program; where you see numbers in New York 
State where we spend approximately $4,000 per enrollee versus 
California, another State that has invested tremendously in expanding 
Medicaid and Medicaid services, at $2,500; where you see reports that 
in New York State our average costs are 44 percent, in New York State, 
under Medicaid spending than the national average.
  And then you look at small things that do add up: taxi services that 
are reimbursed under Medicaid in New York State to the tune of $2.20 a 
mile. Mr. Speaker, every hardworking resident in my district that is 
watching tonight knows that if they go to submit a mileage 
reimbursement to their employer or they go and try to get reimbursement 
from their local government that they work at, they are getting 55 
cents or maybe 53.5 cents. That money adds up.
  You also see a Medicaid program in New York that is ripe with waste, 
fraud, and abuse; and by putting that $145 million tax burden on our 
local taxpayers, our counties cannot address that waste, fraud, and 
abuse. That can only be done in our State capital. So I think it is 
only right that we put the burden on our State capital, who has the 
authority, the flexibility, and the ability to address these issues, to 
have to deal with this burden at the same time they can implement 
solutions.
  If our Governor so chooses to make this type of waste, fraud, and 
abuse rampant through Medicaid, that is his choice. But he shouldn't 
put it on our backs, our local residents' backs, to the tune of $145 
million of taxpayer dollars that they have no ability to address at the 
local level.
  I also remember, vividly, a story from one of our first responders, 
an Olean firefighter who came in and talked about him being part of 
ObamaCare ambulance service where they would pick up individuals who 
would call for services and claim to be experiencing a medical 
emergency; and then as they delivered the patient to the hospital, that 
same patient would refuse service at the ER so they could go to the 
mall across the street--a ride in an ambulance that is paid for by our 
hardworking residents in western New York.
  We are generous people. We don't mind helping people out. But when 
you put a burden like this on our backs and you don't give us the 
flexibility and ability to address these concerns, that is wrong. And 
what this amendment does, and I am proud to support it and stand here 
with my colleagues, is right this wrong once and for all and put the 
burden where it needs to be: in our State capital. Let our Governor own 
this and, hopefully, wise up and deal with it at that level and take 
this burden off our hardworking taxpayers.
  Thank you, Mr. Faso and Mr. Collins for this leadership, and we are 
wholeheartedly behind you.
  Mr. FASO. Mr. Speaker, I thank Mr. Reed. I think he raises a very 
timely and very good point.
  The fact is the level of government that designs the program, that 
confers the benefit, that says who is eligible should also be the level 
of government that has to go to its citizens and say: ``Here is why we 
need to raise the revenue to pay for that benefit.''

                              {time}  1945

  But, indeed, what New York does is wholly different. What New York 
does is they simply say: Here is the benefit, and we are going to shift 
part of the cost of that benefit to taxpayers at the local level, to 
the homeowners and to the property taxpayers, and their county 
governments have nothing to say over how that program is run or 
operated or administered. They just have to send the bill to Albany 
once a month.
  This is what we are seeking to address.
  Mr. Speaker, I yield to the gentleman from New York (Mr. Collins) who 
is from Erie County.
  Mr. COLLINS of New York. Mr. Speaker, I rise today as a proud 
cosponsor of the Property Tax Reduction Act introduced by my colleague 
and friend from New York, Representative John Faso.
  I am committed to working to provide tax relief to my constituents, 
which is why Representative Faso and I worked to include a similar 
measure in the Affordable Health Care Act, and I urge the Senate and 
Leader McConnell to include that measure in their healthcare bill.
  The State of New York saddles its residents with the highest overall 
tax burden in the Nation. A main driver of this hardship remains New 
York's persistently exorbitant local property taxes, which are a 
symptom of irresponsible governing from Albany. Governor Cuomo 
continues to rely on New York counties to foot the bill for New York 
State's outrageous Cadillac Medicaid plan, which costs each recipient 
44 percent more than the national average.
  The Governor essentially runs up a tab and then demands that the 
counties find a way to pay the bill. This is an unconscionable shift of 
cost. The entity of government that spends taxpayers' money should be 
the entity that pays the bill. Instead, Governor Cuomo wants this 
scheme to continue shielding his outrageous spending and keeping his 
actions from public scrutiny. The Governor's sleight of hand costs the 
eight counties I represent over $470 million a year and my home county 
of Erie almost $204 million a year--nearly 83 percent of the total 
county property tax.
  The Property Tax Reduction Act will end this outrageous cost shift, 
hold Governor Cuomo accountable for the State's Medicaid spending, and 
deliver much-needed tax relief to the hardworking taxpayers in my 
district.
  I want to thank my friend and colleague, Mr. Faso, for introducing 
this bill, and I urge my colleagues to support it.
  Mr. FASO. Mr. Speaker, I appreciate Mr. Collins' strong support. As a 
former county executive in Erie County, you had that experience of 
having to write the check every month to Albany for a program and 
services that you had no control over. I very much appreciate it.
  One of the ironies here is that New York State, with 19 million 
people, spends more on its Medicaid system than Texas and Florida 
combined. Those two States have more than double our population, yet we 
spend more than those two States--Texas and Florida--combined. It is no 
wonder so many New Yorkers have fled to places like Texas and Florida 
through the years.
  So I appreciate Mr. Collins' consistent leadership on this issue from 
the time the gentleman was the county executive in Erie County.
  Mr. COLLINS of New York. We should put it into perspective because 
New York spends too much on everything. Florida now has more people 
than New York. Florida's entire budget is $80 billion a year for more 
than 20 million people. New York, with fewer people, has a budget of 
$160 billion--you almost can't make this up--double Florida.
  Now, a point that I have tried to make when you see what the position 
of New York is, there was a day New York had 45 Members of Congress. 
Congress is apportioned by population.

[[Page 9527]]

Today, we have fallen from 45 to 27. We have lost 40 percent of our 
representation in New York because of the high tax burden. And I know, 
as sure as I am standing here, we are going to lose another seat, 
possibly two, in the Census coming up in 2020.
  Now, contrast to Florida that doesn't have an income tax and has much 
lower property taxes, half of the budget of New York. When we had 45, 
they had 7 Members of Congress--45 versus 7. Today, they also have 27. 
In the next Census, they are going to grow from 28 to 29. You almost 
can't make this up. Certainly the property tax burden is a big thing 
that drives these people out of New York State.
  They want to live there. People want their kids to be there. There 
was a day in Erie County--and I was the county executive--we had 1.25 
million people in Erie County in 1972, 1973. We are down to 900,000. 
Forget about relative growth. We have actually lost 25 percent of our 
absolute population over the last 40 years because of the high tax 
burden in New York, so much so, they coined the phrase of our airport. 
They called it the Runway of Tears because the parents were watching 
their children and grandchildren fly off to Florida, to North Carolina, 
and to other States where there were jobs and opportunities--the Runway 
of Tears.
  So anything we can do to help reduce that tax burden in New York and 
to let our kids come home and be able to afford to live in New York 
State, maybe one day again we will be the Empire State.
  So I thank the gentleman for his leadership on this. Certainly I am 
going to be fighting side by side with the gentleman and the other New 
Yorkers to get this through.
  Mr. FASO. Mr. Speaker, I thank the gentleman for his support.
  The fact of the matter is that New York has driven away so many 
people. In my 19th Congressional District, every single county has lost 
population in the last 5 years. School district populations are down 
30, 40 percent. Part of the reason is because of a lack of jobs and 
high property taxes. What we are simply saying is there should be 
accountability.
  When I ran for office last year, I promised the people of my district 
that I would introduce a measure, because then people would say: how 
can the Federal Government get involved in this question?
  The reason is because the Federal law authorized the States to impose 
part of their costs on the counties or on the local governments. The 
fact is that only New York State did it to the degree that New York 
did. That is why it is going to require us to amend the Federal 
legislation to preclude New York from doing this.
  We are giving Albany 2\1/2\ years to reform their program, to 
eliminate waste, and to make other priorities in its spending. There is 
no reason for cuts to hospitals or nursing homes, as Governor Cuomo has 
alleged falsely. What he needs to do is take full responsibility for 
this program, as most of the Governors in the 49 other States do, and 
then we will be able to relieve this burden on our local homeowners.
  Mr. Speaker, I yield to the distinguished gentlewoman from New York 
(Ms. Tenney), who was also elected with me in 2016, for her comments on 
this important matter.
  Ms. TENNEY. Mr. Speaker, I thank Congressman Faso for his leadership, 
and also for the great comments from Congressman Collins in the western 
New York district and for coming up with this really great piece of 
legislation.
  It is no secret that New York residents pay among the highest taxes 
in the Nation. Combined State and local taxes consume over 13 percent 
of the average household income.
  Decades of tax-and-spend policies have depleted the wallets of 
hardworking middle class families and forced many small businesses--
including family farms; once a tradition in New York--into closure, and 
driven lifelong residents out of our State in record numbers forever. 
These burdensome taxes, coupled with crushing regulations, have led to 
the worst business climate in the country. Small businesses, which 
create over 70 percent of the new jobs, face the threat of extinction 
in New York.
  Year after year, New York continues to be ranked the highest in out-
migration in the entire Nation. Nearly 200,000 people have left the 
Empire State, and two of the worst hit regions--the Mohawk Valley and 
the southern tier--are located in the 22nd District. Additionally, the 
two largest cities in our district--Utica and Binghamton--are ranked 
last and second to last in economic growth.
  Hardworking families and our job creators desperately need tax 
relief. That is why I am working with the New York delegation and the 
Republican congressional delegation to lead the charge by cosponsoring 
the Property Tax Reduction Act sponsored by Mr. Faso and Mr. Collins 
and cosponsored by the rest of us.
  As a note, I would just like to mention that, as a former member of 
the State assembly, I did sponsor legislation very similar to the type 
of relief being proposed in this wonderful piece of legislation known 
as the Property Tax Reduction Act. That legislation was cosponsored in 
a bipartisan way with Democrats who also recognized the need to change 
the paradigm in New York State.
  The Property Tax Reduction Act will bring the largest local mandate 
relief initiative to my area in my lifetime, potentially saving the 
taxpayers in the 22nd District more than $167 million annually in 
unfunded State Medicaid mandates. This bill relieves county governments 
from the burden forced upon them by Albany bureaucrats led by our 
Governor.
  Currently, in New York State, the law requires approximately $2.3 
billion, as was mentioned earlier, that is taken from our local county 
governments and given to the State for the Medicaid program. This 
amounts to about $140 million per week.
  In 2015, Oneida County was forced to divert more than 80 percent of 
the property tax levies to subsidize Albany's bloated budgets. This 
amounts to $54.4 million annually in Oneida County losses every year to 
cover the cost of their share of Medicaid.
  In Broome County, more than half of the county's $70 million in 
property tax revenue, about $37 million, was taken from the county last 
year and diverted to Albany--a loss of more than, as I said, $37 
million. This is money that would otherwise go to reduce property 
taxes, fund our schools, make much-needed improvements to 
infrastructure, and support our first responders, among many other 
programs, that we need on a county level.
  Combined property and sales tax rates as a percentage of value rank 
many of New York's counties among the highest taxed counties in the 
Nation, with Oneida County being ranked 19 in the latest Tax Foundation 
survey. No other State in the country abuses its local governments and 
taxpayers quite like Albany does in order to fund its most expansive 
and really overly generous Medicaid programs in the Nation.
  New York's Medicaid program has the highest incidents of fraud, 
abuse, and waste in the country. If other States can provide high-
quality healthcare to vulnerable citizens without taking advantage of 
local taxpayers, so can New York. The imposition of over $2.5 billion 
in Medicaid costs on to the counties is nearly seven times costlier 
than what counties in California pay, despite having higher enrollments 
and expenditures.
  The Property Tax Reduction Act requires Governor Cuomo and the State 
to pay its full share of the Medicaid program that it should be paying 
in full and that it also forces on to the county and local governments.
  This bill does not propose cuts to the programs in the 22nd District. 
Rather, it requires Albany to put its fiscal house in order. It 
requires Albany to take stock of the money that it has been using, 
sending these unfunded mandates to our strapped local governments.
  This legislation, as the sponsor has indicated, gives the State ample 
time to realign the budget, to rein in out-of-control spending, and to 
give the taxpayers relief once and for all at the county level.

[[Page 9528]]

  If Governor Cuomo chooses to hurt the citizens by slashing programs 
that upstate New Yorkers want and need with a mammoth State budget that 
was over $152 billion this year for fiscal year 2017, that is his 
choice, not something that has been brought on by that act. His failed 
leadership continues to produce budgets laden with unconstitutional 
executive pork and wasteful spending.
  In fact, let's just take a look at a couple of the items. Over $370 
million in Albany's budget these past few years was spent on the 
corrupt and mismanaged StartUP New York program, which produced only 
one-third of the promised jobs. Over $1.3 billion in tax breaks have 
been handed over to Hollywood filmmakers in the last 2 years. In all, 
Albany spends over $8 billion in taxpayer money on a job-creation 
program with little results to show for it.
  The bill will simply force the State to work over a period of several 
years to responsibly reduce the unfair and unreasonable Medicaid 
liability that has been forced on to our counties. Upstate New York is 
in desperate need of property tax relief.
  This bill is the first step in making the relief a reality. County 
executives and local governments across the State have voiced their 
support of this legislation.
  While hardworking families struggle, Albany sits idly by. That is why 
we are taking the lead on the Federal level to help revive our region 
and bring business and people back to beautiful upstate New York. By 
giving county governments a once-in-a-lifetime opportunity to reduce 
property taxes, this bill will save millions of dollars and hard-earned 
tax dollars for working families.
  On behalf of the 22nd District, I just want to thank my colleagues 
for really taking the effort to bring this to the floor and showing 
true leadership in the face of difficult circumstances in finding a 
real solution, a once-in-a-lifetime opportunity for all of us as 
taxpayers in New York to finally have some relief, to grow our business 
community, and to find some kind of dynamism in our economy. I thank 
again the sponsors, Mr. Faso and Mr. Collins.

                              {time}  2000

  Mr. FASO. I appreciate the gentlewoman's remarks and her strong 
support for this reform measure.
  I would also point out that a 2015 report from the New York State 
Comptroller indicated $513 million in improper payments in the Medicaid 
program were identified. In the same report, the Comptroller questioned 
an additional $361 million in transactions that would require agency 
actions to reduce costs or recover funds.
  In the past decade, the Office of Inspector General for the Federal 
Department of Health and Human Services found 10 specific instances in 
which New York State received improper Federal Medicaid payments in 
excess of $50 million, with six of those instances each exceeding over 
$170 million apiece.
  So there is a lot of room in the New York State Medicaid program to 
reduce improper payments and outright fraud that we have seen. I know 
my colleague, Ms. Tenney, from her experience in the State legislature, 
has seen firsthand what was going on with New York State's Medicaid 
system.
  Part of the reason this has occurred is because Albany was able to 
spend someone else's money. The old iron rule of government and the 
iron rule of family budget is that it is always easier to spend someone 
else's money. What Albany has been doing for 51 years has been shifting 
part of its Medicaid responsibility from the State level down to the 
local level, and so Albany was less responsible.
  This wasn't a Democrat or Republican thing, either. This happened 
under the Republican Governors. It happened under Democratic Governors. 
It is true, through the years, New York State has partially reduced the 
burden that was falling upon the county property taxpayers, but they 
have never eliminated it.
  Do you know what? The leadership in Albany today shows no signs of 
ever taking steps to finally eliminate this.
  In Ms. Tenney's district, it is over $167 million a year in property 
tax relief. In my district, it is over $224 million. In Mr. Collins' 
district, it is close to $400 million. In Nassau County, it is over 
$300 million; in Suffolk County, over $300 million; Westchester County, 
over $200 million.
  All throughout the State of New York, outside of New York City, the 
property taxpayers are being crushed. They are being driven away. Our 
jobs and our economy are being driven away, in part, because of 
Albany's Medicaid mandate.
  We can change it by changing Federal law. That is what we are going 
to do. We have placed this provision in the healthcare legislation. It 
is my hope and expectation that it can be included in the final 
legislation that is passed. But regardless, I know Ms. Tenney, Mr. 
Reed, Mr. Collins, Ms. Stefanik, Mr. Zeldin, and the rest of us will be 
fighting very hard to make sure that we can finally eliminate this 
injustice.
  What Albany does is taxation without any representation. In my 
District, in Ulster County, almost half of their entire property tax 
levy goes to pay for Albany's Medicaid costs.
  In Rensselaer County, about 57 percent of every nickel the county 
raises in property tax levy goes to pays for Albany's Medicaid costs, 
and they have no say over how those funds are expended, over how the 
program is operated. It is truly taxation without representation.
  I yield to the gentlewoman if she has anything to add in conclusion.
  Ms. TENNEY. I want to mention one thing that I think is really 
important. Both Congressman Faso and I served as members of the State 
Assembly prior to serving in Congress. One thing that we both know is 
that we are truly interested in helping people who are needy.
  It isn't about the people who are truly needy; it is about the people 
who are abusing the system and taking resources that are desperately 
needed by our seniors and by people who really are, as I said, truly 
needy. This is a way of providing more resources to them without having 
the fraud, the abuse and waste, the mismanagement in Albany, and 
forcing Albany into being more fiscally conservative, protecting our 
counties so that we can provide those services for our communities.
  I just want to make sure that we characterize that, because that is 
something that we all care about as people who take an oath of office, 
not just to uphold our Federal Constitution but also our State 
constitution. We take that seriously.
  I know we are all committed to helping those people, but also 
remembering that we need to respect the taxpayers. The taxpayers need 
to have proper management of their funds.
  I want to commend the gentleman for his work and efforts in making 
sure this comes to the floor and making sure we get this passed on the 
Federal level, because it has been a struggle for all of us through 
many years. Having this come to reality is going to be, honestly, one 
of the greatest mandate relief packages that I have experienced in my 
lifetime, and I am grateful.
  Mr. FASO. I thank the gentlewoman for her comments.
  I would close, Mr. Speaker, simply by pointing out that New York 
State has among, depending on what the measure is, either the highest 
or second highest real property taxes in the entire Nation. We are the 
only State that imposes this type of burden on local homeowners, local 
property taxpayers.
  If you look at the gross amount that people pay in their real estate 
taxes, the downstate counties--Westchester, Nassau, Suffolk, Rockland--
pay the highest in gross amount. But if you calculate the property tax 
burden as a percentage of the home value, the counties in upstate New 
York; in western New York; along the southern tier; in the Mohawk 
Valley, where Ms. Tenney lives; in the Catskills and Mid-Hudson, where 
I live; and in the Adirondacks, which Ms. Stefanik represents, those 
counties are being crushed. Those homeowners are being crushed by the 
burden of real estate taxes.

[[Page 9529]]

  A large part of that reason is this 50-year mandate that started 
under Nelson Rockefeller that has been imposed on New York homeowners, 
which is crushing them, driving them out of their homes, and this is 
what we are intending to stop.
  Mr. Speaker, I appreciate the support of my colleagues here tonight, 
and I yield back the balance of my time.

                          ____________________