1. Meeting the Challenge: Mandate Relief Rockefeller Institute and the League of Women Voters of NYS October 2, 2012

2. The Projected County Fiscal Gap (AS OF SEPTEMBER 2011)

3. NYSAC | 540 Broadway, Fifth Floor | Albany, New York State and County Budget Actions The State Budget Included: A hard cap on the growth of annual county Medicaid Costs Establishment of a Tier 6 in the Retirement System Creation of a statewide fiscal agent in Early Intervention Procurement Reforms County officials enacted significant spending cuts, workforce and revenue actions to lower the trajectory of spending and help close the fiscal gap.

4. NYSAC | 540 Broadway, Fifth Floor | Albany, New York The Projected County Fiscal Gap (After 2012-13 State and County Budget Actions)

5. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Defining “Mandate” A mandate occurs when the State or Federal government directs a county to:  Implement a program or provide a service (Medicaid, welfare, child support collections, etc.) created and defined by the State/Federal,  Meet an environmental or labor standard,  Construct/upgrade a facility (courthouse, jail, etc.) subject to prevailing wage and Wick’s Law requirements,  Provide a tax break or exemption, etc. In a typical county anywhere from 15% to 30% of the value of all property is exempt from property taxes. A mandate usually requires a county to strictly adhere to rules set by the Federal/State government that defines the scope, eligibility, frequency of service, amount of benefit, etc. Counties have virtually no ability to control the costs of these mandates.

6. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Mandates Come in Two Forms Funded – On some occasions the State or federal government will provided all financial resources necessary to carry out the mandate ( Food Stamp Benefits -100% federal reimbursement ). Unfunded/Underfunded – usually, a mandate comes with partial reimbursement from the State or no reimbursement at all, leaving the cost of supporting the State mandate on local taxpayers (administering Food Stamps).  Counties lost more than $300 million annually in State administrative funding as part of State Budget cuts.

7. Annual Growth in Many of These State Mandates Has Exceeded Inflation *State Budget Shifted 71% of SN cost to counties vs. 50%, while fully federalizing the cost of TANF which reduced costs to the State and Counties. ** Excludes New York City pension costs of nearly $9 billion. Medicaid  2.5% (0% in 2015 and beyond) Pension Costs  31.0% ( from 2009-13 ) TANF/ Safety Net*  5.6% Child Welfare  2.0% Special Ed. Pre-K  8.0% Early Intervention  7.7% Indigent Defense  5.5% Probation  6.2% Youth Detention  6.9% Eventually the math overwhelms any budget $7.5 Billion  $1 Billion**  $1 Billion  $825 Million  $640 Million  $330 Million  $300 Million  $390 Million  $90 Million  2012 Local CostAnnual Growth Trends State Mandate

8. 2013 Tax Cap Growth Limit vs. Cost Growth of 9 Mandates

9. The 2012 Cost of the 9 Major Mandates In 2012 nearly $12 billion in local taxes (County and NYC) will be sent to Albany to support spending in the State Budget for 9 major mandates (does not include estimated NYC pension costs of $9 billion).

10. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Other Mandates Impacting the County Budget Some of the other mandates counties provide and fund include: - Foster Care - Adoption Services - Domestic Violence Assistance - Adult Protective Services - County Jails - District Attorney - PINS - Community College Costs - Public Health - Elections - Rabies Control - Mental Health Service Coordination - Consumer Protection -Substance Abuse - Veteran’s Services - Supported Employment -Child Support Enforcement - Emergency Assistance for Families -Personal Care Assistance - Court Security

11. NYSAC | 540 Broadway, Fifth Floor | Albany, New York The “Kitchen Table Math” Behind the County Property Tax Levy The amount necessary to operate county government, including the total cost of locally defined services, plus those mandated by the State and Federal government - Minus all revenues collected by the county including state and federal reimbursements (or direct aid), local fees, mortgage and sales tax, etc. = This Equals the TAX LEVY, the amount that will be collected by property taxes largely to make up the shortfall in reimbursement from the State/Federal government. The County Budget is :

12. NYSAC | 540 Broadway, Fifth Floor | Albany, New York The Property Tax Levy in First Year of Tax Cap 50 counties met the cap 7 did not meet the cap 14 voted to override (7 as a precaution) How long can this trend continue? As mandates continue to grow and our revenues are restricted.

13. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Governing by Triage… It’s what to cut and when. Counties are privatizing major assets and services, including: County Nursing Facilities (3 closed or sold in 2012, 17 in jeopardy) Certified Home Health Agencies (nearly 50 closed or sold in the last decade) Mental Health Agencies (privatizing) Land, buildings, equipment.

14. What does it mean locally? Rensselaer County (past five years) State Mandated Spending 54% Local Spending 11%

15. NYSAC | 540 Broadway, Fifth Floor | Albany, New York A Reduced County Workforce * * Does not include mid-year actions.

16. NYSAC | 540 Broadway, Fifth Floor | Albany, New York …Triage Continues Depleting Reserves Some counties will completely deplete available reserves, others are close behind. Some at constitutional tax limit. Delay or Reduce Capital Construction and Maintenance Borrowing for operating expenses/pension costs Reducing Payments to Not-for-Profits, Cultural Institutions Closing facilities Clinics, nursing homes, museums, parks, etc.

17. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Critical Relief by the State The enacted State Budget provided some positive first steps in County mandate relief:  Takeover of the growth in county Medicaid cost ($1.2 billion over 5 years)  Pension Reforms – creation of Tier 6 ($7.2 billion over 30 years)  Early Intervention – statewide fiscal agent reforms ($52 million over 5 years) Important, but this needs to be placed in context

18. NYSAC | 540 Broadway, Fifth Floor | Albany, New York County Mandate Relief – In Perspective Medicaid Payments $1.2B in Lower Payments Next states’ highest county contributions: California: $5 billion over five years Arizona: $1.7 billion over five years Florida: $1.1 billion over five years

19. NYSAC | 540 Broadway, Fifth Floor | Albany, New York County Mandate Relief – In Perspective Pension Payments

20. The Challenge of Mandate Relief The need to avoid cost shifting among governmental units and enable local governments to provide local services under the tax cap. Mandate/program reforms must benefit all levels of government—state and local. There is a constituency behind every mandate. We must engage these constituencies.