November 26, 2006


Dear Senator Schumer,
Dear Senator Clinton,
Dear Congressman Rangel,

Dear Congresswoman McCarthy,

Onerous property taxes impose an undue burden upon New York State’s homeowners, constrain the competitiveness of our businesses and shackle economic growth. As a member of the incoming Senate leadership, you now enjoy the ability and obligation to substantially alleviate a significant and unfair expense borne by our state and local taxpayers.

As you know, New York receives the statutorily-established minimum federal Medicaid reimbursement rate. This 50% federal share is lower than 39 other states and fails to reflect our growing needs. Although the New York State Legislature has successfully limited burgeoning county Medicaid costs and adopted comprehensive legislation to mitigate the improper expenditure of Medicaid funds, this longstanding inequity is a principal component of New York’s disproportionate state and local tax structure.

Pursuant to a statutory formula, the Department of Health and Human Services annually establishes the FMAP for the succeeding federal fiscal year. You must capitalize upon this opportunity to reform this flawed reimbursement mechanism and ensure that New York taxpayers receive their fair share.

The federal government finances approximately 57% of all Medicaid costs, with comparable states like Michigan and Pennsylvania receiving 56.59% and 55.05%, respectively. Moreover, the federal shares received by these two states have risen from their traditional levels.

With a modest FMAP increase restoring the additional 2.95%temporarily provided through the Jobs and Growth Tax Relief Reconciliation Act of 2003, New York State could deliver nearly $1.5 billion in new savings to overburdened property taxpayers. Further adjustments mirroring the reimbursement received by Michigan and Pennsylvania would provide up to $3 billion in necessary tax relief.

As noted above, the State Legislature unanimously enacted the Medicaid Fraud Reform Act to enhance the state’s efforts to combat fraud and abuse in our Medicaid program. Based upon the success of similar reforms in Texas and other states, the new Administration’s aggressive implementation of this law could yield over $2 billion in annual savings for New York taxpayers. When coupled with the state’s partial assumption of the counties Medicaid costs, the State Legislature has worked to ease the program’s impact on property taxes.

As you develop the agenda for the 110th United States Congress, we encourage you to prioritize the interests of New York State’s property taxpayers and reform the inequitable FMAP formula. On behalf of our shared constituency, I anticipate your assistance in this important endeavor and your commitment to real property tax relief.

Best wishes and kind regards.