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Medicaid change could mean savings for St. Lawrence, Jefferson tax bills

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My story with Martha Ellen:

St. Lawrence County has looked unsuccessfully at a sales-tax hike, and is now in discussions to override a law limiting property tax increases to solve its budget woes. But the county could save tens of millions in future budgets, and could forgo parts of those tax hikes, if a proposal that lawmakers are warmly welcoming is passed.

“From the perspective of the taxpayer, when they look at the percentage of total taxes, half or more may be going to pay for Medicaid,” county Social Services Commissioner Christopher R. Rediehs said. “That is a huge part of the local property tax. The local property tax is not the way to fund Medicaid. The catch is, who’s going to pick up that amount?”

A proposal unveiled at an Albany news conference Monday would shift the costs of the health-care program for the poor onto the state over eight years. As it stands, the federal government pays 50 percent, the state pays 25 percent and counties pay 25 percent of the costs. County taxpayers statewide foot a $7.3 billion bill for the program, according to the state Association of Counties.

In St. Lawrence County, the program costs $23.7 million locally — a figure that rises by 3 percent annually. The county share is paid for by sales tax and other revenue in addition to property taxes. The total annual cost of the program in the county is $175 million.

In June, the St. Lawrence County Board of Legislators formally asked the state to take over its share of the cost. Legislators said they believe that paying for Medicaid burdens rural counties more than their wealthier downstate counterparts and that the cost should be spread out.

Having the state take over the local share of Medicaid costs would allow St. Lawrence County to cut its property tax rate by 5 percent, according to the resolution passed three months ago. Only a handful of other states require their counties to pick up part of Medicaid’s expenses.

Assemblyman Kenneth D. Blankenbush, R-Black River, joined his fellow north country lawmakers in welcoming the bill.

“It’s a huge amount,” Mr. Blankenbush, a former Jefferson County legislator, said of the burdens Medicaid presents. “It’s the biggest unfunded mandate that comes down to all our counties.”

Mr. Blankenbush said Jefferson County pays $19.5 million for the program. The county is expected to raise a total of $46.7 million in taxes for 2011.

But who is, indeed, going to pick up that 25 percent that the counties pay? The question is whether the state will be able to do so.

“The fact that the bill has in there that they’re going to take it over incrementally at least gives the state time to pick up the tab a little bit at a time,” said state Sen. Patricia A. Ritchie, R-Heuvelton. “If it’s a state mandate, they should pick up the tab.”

The bill has bipartisan support, both in Albany, where it was unveiled by Republican senators and a Democratic assemblywoman, and in the north country.

“That should be one of the options that we’re discussing,” said Assemblywoman Addie J. Russell, D-Theresa.

Mrs. Russell also said the state should look at taking over a bigger proportion of retirement costs for county and local employees in the state retirement system.

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