Monroe County, New York intercepts public schools funds to pay for county Medicaid costs
Monroe County, New York has successfully sued all 54 government entities, including the public school systems, with which it shares the county sales tax revenue to shift that revenue to pay for county Medicaid costs. A state trial level court recently ruled that the county had the authority to implement its so-called Medicaid sales tax intercept program in order to deal with its $102 million budget deficit. Several of the affected entities, including the public schools, are appealing the trial court’s decision. They argue that if the Medicaid sales tax intercept program goes ahead without an accompanying sales tax increase, they will suffer significant revenue losses. "The intercept plan was never intended to bankrupt the city, towns, schools and the municipalities," says City of Rochester spokesman Gary Walker.
Monroe County Executive Maggie Brooks insists that the intercept plan is coupled to a proposed sales tax increase from 8 cents to 8.75 cents and that one will not occur without the other. However, those opposing the tax diversion contend the lawsuit says nothing about a tax increase. As a result, they claim they have no choice but to appeal the ruling in order to protect an estimated $172 million that would be shared in 2008. The Monroe County School Boards Association (MCSBA), which is coordinating the appeal for the 24 school districts participating, characterizes the county’s lawsuit as an "encroachment on school resources." According to MCSBA, "Each local government has its responsibilities … [i]t is the county government's legal obligation to pay for Medicaid." Ms. Brooks, nonetheless, remains confident that she can build a consensus for the plan. "We're continuing to talk to our government partners about the solution," she says. "We're trying to educate them about our budget challenges and the issues that we face."
Rochester Democrat and Chronicle
By Joseph Spector
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