The Kinderhook Kickback

You may have heard about the Empire State Emolument designed to keep upstate and western New York Republicans in the fold for TrumpCare:

An amendment to the American Health Care Act that would shift county costs for Medicaid to the state that drew the ire of Gov. Andrew Cuomo’s administration on Friday has the blessing of Rep. John Faso, R-Kinderhook, who proposed such a plan during the 2016 campaign.

Faso said in a phone interview he worked with Collins on the amendment and supports an approach to end “New York’s 51-year-old mistake of foisting what should be the state’s share, the state’s cost of Medicaid on local property tax payers.”

Faso said the amendment has been withdrawn while members await to see if the Congressional Budget Office will score it. He said New York City would be exempted under the amendment because it has an income tax that other local governments do not have.

“It’s high time that Albany took responsibility for this program like virtually every other state does,” Faso said.

Here’s the thing — on the narrow issue, Faso is right. Medicaid should be funded entirely or almost entirely from the general state fund, and requiring counties to pick up a significant percentage of Medicaid funding is irrational. The disparities in property tax rates the policy helps to produce tend to create negative equilibria. To take the area I know best, the effective property tax rate in Saratoga County(1.6%) is somewhat lower than Albany County [city proper has a lot of poverty but mitigated by significant population in middle-class-to-tony suburbs–1.92%] and much lower than Rensselaer [gentrifying-but-still-quite poor Troy largely surrounded by rural areas–2.36%] and Schenectady [essentially a rust belt area–2.64%] Counties. Now, I suppose it’s possible that people in Saratoga Springs and Clifton Park and Loudonville and Latham care less about the quality of public schools than their counterparts across the Mohawk or Hudson. What seems much more likely is that when you replace poor people with state employees and software engineers and horse owners with pied-a-terre condos this reduces your Medicaid outlays. Most rural counties have rates similar to or higher than Schenectady because they just don’t have the tax base to pay for Medicaid expenses. And Onondaga [Syracuse], Erie [Buffalo] and Monroe [Rochester] have even higher rates than Schenectady.

Needless to say, while there’s a real problem here the Buffalo Bribe is hardly the way to deal with it. First, there’s the exclusion of New York City which is wrong — it should be made a state-funded program, period. And even worse, of course, is that it’s attached to a bill that is cyanide-laced dog vomit, not least because it would devastate Medicaid funding and put states like New York that actually want to provide health insurance to poor people in a much worse position. I mean, say this for Ben Nelson — at least he was trying to get more Medicaid money for his state.

Paying Medicaid expenses at the county level is bad policy. Electing Republicans looking to cut deals to facilitate the passage of what would be one of the worst statutes ever passed by the United States Congress is much, much worse. Collins, Faso, Stefanik, Katko and Tenney all need to be relieved of their duties in 2018, and if they vote for TrumpCare this should be front-and-center in every campaign against them whether it ultimately passes or not.