John Machacek, Washington correspondent
and Jay Gallagher, Albany bureau chief
ALBANY ‹ The federal government will provide $1.5 billion more for health
care in New York if the Legislature agrees to cut Medicaid spending, Gov.
George Pataki said Wednesday.
Pataki traveled to Washington to close a tentative deal with the Bush
administration for the extra money. But it comes with strings attached, and
it's not clear whether the Legislature will go along.
It was the latest twist in the attempt by Pataki and lawmakers to pass a
budget by the start of the April 1 fiscal year, something that hasn't
happened since 1984.
New York health care spending, expected to top $45 billion next year, is one
of the biggest unresolved budget issues.
Medicaid is the federal health care program for the poor and disabled.
Washington pays half the cost, the state 34 percent, and localities 16
percent.
Under the deal, hospitals and nursing homes in New York will receive $500
million annually for three years to try to implement changes in the Medicaid
system that will eventually save money. Those measures include a state
takeover of Medicaid administration, a function that counties now perform.
Other parts of the plan include computerizing medical records, providing
more in-home care for disabled people, and closing underutilized hospitals.
"The New York proposal has a great deal of merit and we support Governor
Pataki's efforts to move it forward," said Michael Leavitt, secretary of the
federal Health and Human Services Department. "This is exactly the kind of
innovation we want to encourage.
"HHS will work with the state on the creation of benchmarks (for the reform
plan)," he added.
Pataki told reporters that he hoped legislative leaders see Leavitt's offer
as an "opportunity" and "understand that we have to do what we have to do to
meet the conditions that the secretary has laid out."
President Bush's 2006 budget proposes $60 billion in Medicaid cuts
nationwide by the year 2016 as part of his plan to slow the growth of
Medicaid. New York could lose as much as $7.6 billion in federal Medicaid
funds under that scenario.
Pataki said that while legislative leaders have expressed support for most
parts of the federal requirements, cutting spending is unresolved. Lawmakers
agreed earlier this week to add $685 million in Medicaid spending over
Pataki's request.
Pataki wouldn't say how much would have to be trimmed from the Medicaid
budget to meet the federal requirements.
In all, legislators want to add $1.55 billion to Pataki's proposed budget.
Senators say Pataki wants to trim about $600 million off that total.
In a sign that the Medicaid compromise has a good chance of approval, it was
endorsed Wednesday by a top official of the state's most powerful health
care union.
The plan "could be critically important in helping New York engage in real
Medicaid reform while saving access to health care that New Yorkers depend
on," said Jennifer Cunningham of Local 1199 of the Services Employees
International Union.
Cunningham said she thinks lawmakers can find spending cuts without hurting
health care.
Still, legislative leaders reacted cautiously.
Getting additional money from Washington is positive, said Mark Hansen, a
spokesman for Senate Majority Leader Joseph Bruno, R-Brunswick, Rensselaer
County. But Hansen said that the final size of the Medicaid budget has yet
to be determined.
A spokeswoman for Assembly Speaker Sheldon Silver, D-Manhattan, was equally
noncommittal.
"Right now, details of this waiver are unclear," Eileen Larrabee said. "The
Assembly is going to need to know how it would impact health care in New
York state and the current budget process."
In another budget issue, the Assembly has proposed borrowing $2.9 billion
for construction projects ‹ $1.6 billion for improvements to the rail, bus
and subway facilities of the Metropolitan Transportation Authority and an
additional $1.3 billion for road and bridge projects upstate.
Wednesday, Senate negotiators agreed to the bond act, although the exact
size of the borrowing remained open.
"The mix of federal money and the bond act is the only way to go forward,"
said Thomas Libous, R-Binghamton, chairman of the Senate Transportation
Committee. He said projects such as completing Interstate 86 across the
Southern Tier depend on the borrowed funds.
The lawmakers plan to meet again later this week to try to agree on a figure
to ask voters to approve borrowing. Voters soundly defeated a proposal to
borrow billions for transportation projects in 2000.
On school aid, legislators made little progress. The 10 members of a joint
Assembly-Senate education committee each spoke at a meeting Wednesday about
the need to help schools.
But they came no closer to agreeing on how to distribute about $310 million
($400 million if you count the whole school year instead of the fiscal year)
that they want to add to Pataki's budget for schools.
Pataki proposed a boost of $526 million, about 3 percent, to the current
schools budget of $15.4 billion.
Includes reporting by Gannett News Service reporters Erika Rosenberg and
Michael DeDora.