NYS budget

Medicaid, Too

There has been an increasing amount of heat over the necessary and inevitable cuts to state aid to school districts, but I think more attention should be paid to Medicaid.  It's 40 percent of the unsustainable state budget, and it needs to be cut like everything else.

The case is laid out by Robert Brauchle today in the Utica Observer-Dispatch.

How can we go at Medicaid reform?
“I think everything has to be on the table in these tough economic times,” Sen. James Seward, [(NY-51, including Dryden)], said. “The Medicaid program in New York state is very generous, and the state has opted for many more of the options than most other states.”
There is a "duplication and fraud" group of legislators and lobbyists that insists that every mythical abuse must be expunged from the system before any "constituent services" are touched.
 
Nonsense.  This is just a tactic to keep anything actually meaningful off the cutting table.  If there is still that much duplication and fraud after all the years we've heard this line, then they are part of the fabric of the system in New York and the entire structure must be replaced.  There are decisions to be made...target certain services or start from scratch; go with a statewide approach or allow options which may be made county by county.   Brauchle's piece outlines approaches and pros and cons.
 
But to get to the heart of the matter, consider this.  
In Erie County, 95 percent of property taxes are needed to pay for just one bill. Of the $211 million collected in 2010, approximately $201 million pays the county’s portion of Medicaid. This statistic is not only shocking, but also somewhat unbelievable. While we know the numbers are true and Medicaid costs are crippling, it is difficult to believe a county could survive when 95 percent of its property taxes pay just one bill.
How long do you think this can go on?  Is it any wonder that people are leaving?
 
As with schools and other sacred cows, you can be sure that the day is coming when Medicaid in New York has fewer services and is much smaller than it is now. 

"What a State Bond Default Looked Like When It Last Happened, In 1933"

Pay attention, Albany.  From Ace:

In 1933, nobody thought Washington should get involved in a state bond default. In 2010, that’s the first place we would look for help.

So back then, it was a surprise that the federal government should do this; now it's just expected.

So what incentive do states have to make tough cuts? None, it seems.

The coming collapse in the state budgets--a "60 Minutes" report

I'm feeling a little like the Ghost of Christmas Yet to Come...video via Hot Air. It's almost 14 minutes long but worth it (especially if you bypass the ads).

Another kind of sustainability, NYS, and sin

“Most financial crises happen in unpredictable ways, and they hit you when you’re not looking. This one isn’t like that. You can see it coming. It would be sinful not to do something about this while there’s a chance.”

Brace yourselves, people.

....Some of the same people who warned of the looming subprime crisis two years ago are ringing alarm bells again....As the downturn has ground on, some of the worst-hit cities and states have resorted to fiscal sleight of hand to stay afloat, helping them close yawning budget gaps each year, but often at great future cost....Many states, including New York, have delayed payments to vendors and local governments because they had too little cash on hand to make them....So some states are essentially borrowing to pay their operating costs, adding new debts that are not always clearly disclosed....New York balanced its budget this year by shortchanging its pension fund....It is these growing hidden debts that make many analysts nervous. States and municipalities currently have around $2.8 trillion worth of outstanding bonds, but that number is dwarfed by the debts that many are carrying off their books.

But here's the best part:

Richard Ravitch, the lieutenant governor of New York, is among those warning that states are on an unsustainable path, and that their disclosures of pension and health care obligations are often misleading. And he worries how long it can last.

“They didn’t do it with bad motives,” he said. “Ninety-five percent of them didn’t understand what they were doing. They did it because it was easier than taxing people or cutting benefits. We’re getting closer and closer to the point where we can’t do that anymore. I don’t know where that is, but I know we’re close.”

They didn't understand what they were doing? You mean they weren't buying votes to stay in power?  

The whole article is here.

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