October 22, 2024
Some NYS Council members may already have had an opportunity to review the documents we sent yesterday to include the NYS Council’s 25-26 Budget Priorities doc that includes a request for NYS to set aside funds from the proposed MCO Tax for the mental health and substance use disorder systems of care.
Background: Last month NYS applied to CMS for approval of the MCO Tax but it did not line out (in the application) precisely how the funds would be spent. And while the state budget that was enacted earlier this year calls for the funds to be allocated to a special ‘healthcare fund’ the enacted budget was not much clearer re: how the funds would be distributed although the discussion during budget negotiations seemed to indicate a plan to ensure hospitals, nursing homes and other institutional healthcare settings would benefit from the funds, if the proposal were to be approved with the Governor apparently having made a commitment to these same healthcare entities to enhance the increases that were appropriated in the now enacted budget if/when the Tax was approved.
Bill Hammond has been tracking the MCO Tax story and writing about it periodically. In the analysis (see below) Hammond claims that state estimates regarding how much the state could bring in from the proposed tax are way off. All signs point to the fact that NYS has assumed approval of the Tax at a much higher number than that which Hammond calculates. If he is correct, this could spell trouble for budget negotiations and severely hamper the amount of available resources the state believes it will have to work with as it formulates our next state budget.
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New York’s Proposed ‘MCO Tax’ Would Generate a Fraction of What Lawmakers Expected The Hochul administration’s proposed “MCO tax” would generate far less than the $4 billion in extra federal aid anticipated by state lawmakers when they approved the concept this spring, according to documents obtained by the Empire Center. Portions of the state’s Sept. 4 waiver application to the federal government – obtained Monday by the Empire Center under the Freedom of Information Law – lay out a complex tax plan that would bring in gross revenues of $2.8 billion per year starting on Jan. 1.A tax of that size would likely result in net proceeds of $1.4 billion to $1.8 billion after the state’s costs are deducted. |