Monday, January 24, 2011 2:06 PM

Ten New York City Hospitals May Close Over Governor Cuomo's Proposed Medicaid Cuts; Need for a New Approach

New York Governor Andrew Cuomo has a $10 billion budget gap to fill. Unlike Illinois Governor Pat Quinn, Cuomo does not seek tax hikes. Instead he want to cut graft and untenable spending, especially state agencies and Medicaid spending.

Please consider a few snips from Cuomo's State of the State Address. http://www.governor.ny.gov/sl2/stateoft ... transcript

My friends I believe this state is at a crossroads and I believe there are two very different paths this state may down. Certain factors are pushing us down one path - the national economic pressure; the costs of state government that we’re currently expending; the dysfunction that the state government has been manifesting and the fact that the people have lost trust in our government.

What is the state of the state? This is a time of crisis for our state, a time when we must transform our government to once again become the progressive capital of our nation, and to seize the moment of opportunity that is before us.

The State of the State begins with an honest analysis of the crisis that we face. In government, as in life, you can never solve a problem if you refuse to acknowledge it. The economic recession has taken an especially hard hit on the State of New York. In 2009, we had a twenty-six year high in unemployment, roughly 800,000 New Yorkers are now unemployed, hundreds of thousands more are under-employed. We have the worst business tax climate in the nation, period. Our taxes are 66% higher than the national average. Upstate is truly an economic crisis.

The State of New York spends too much money, it is that blunt and it is that simple. Our spending has far exceeded the rate of inflation. From 1994-2009, inflation was about 2.7% per year; medicaid when up over 5% per year and education went up over 6% per year. We just can’t afford those rates of increase. State spending actually outpaced income growth. State spending increased just under 6%, personal income growth was only 3.8%.

And most damaging, our expenses in this state far exceed revenue. We’ve been focusing on this year and the deficit this year, which is a very large deficit about $10 billion, and that is a problem and it is a major problem; what’s worse, is it’s not just about this year. Next year, the problem goes to $14 billion. The year after, the deficit goes to $17 billion. This is not a one year problem my friends. This is a fundamental economic realignment for the State of New York. You look at the chart, you look at the arrows and this is an unsustainable rate of growth and it has been for a long time.

Not only to we spend too much, but we get too little in return. We spend more money on education than any state in the nation and we are number 34 in terms of results. We spend more money on Medicaid than any other state in the nation and we are number 21 in results. We spend about $1.6 billion per year in economic development and we are number 50 in terms of results.

We are spending more, and government is growing more. We now have more than 600 Executive branch agencies.

We are going to have to confront the tax situation in our State. The property taxes in New York are killing New Yorkers. Thirteen of the sixteen highest tax counties are in New York when asset by home value. In absolute dollars, Westchester County the highest property taxes in the United States of America. Nassau County the second highest property taxes in the United State of America. It has to end, it has to end this year. We have to hold the line on taxes for now and reduce taxes in the future. New York has no future as the tax capital of the nation. Our young people will not stay. Our business will not come. This has to change.

We must transform our state government. The last time the state government was reorganized was 1927 under Gov. Al Smith. 1938 a reform was passed, a constitutional amendment, that said there could be only 20 executive departments – 20 - so what has happened since then. Well we couldn’t create any more departments but the law didn’t say anything about creating councils, advisory panels, working groups, facilities, offices, task forces, institutes, boards and committees. So what do we now have? The Department of Health, only one department in compliance with the law, however there are 87 other organizations that have been added to the Department of Health, 46 councils, 6 committees, 17 boards, 6 institutes, 2 task forces, 5 facilities.

We need to try a different approach. And think of it this way, there are basically three flashpoints when it comes to the budget: it’s the education funding, medicaid and state and local mandates. We want to try a new approach. The State of Wisconsin actually used an interesting model. The governor had announced across the board cuts on the medicaid program, the industry said they couldn’t live with the cuts, and what Wisconsin actually did was basically brought everyone in. It was a hybrid alternative dispute resolution meets binding arbitration process and it actually worked fairly well in Wisconsin. The industry came in, they worked with the government, they accepted the budget target and then redesigned the program to meet those targets. Remember, this is not going to be a budget cutting or trimming exercise. We need to redesign the medicaid program. I can also tell you this. As the Attorney General, I audited the medicaid program for four years, even without this budget problem, the medicaid program needs a desperate overhaul. It is dysfunctional on many levels, so this process has to be done anyway. Our suggestion is to take a crisis management approach and put together a Medicaid Redesign team.

Let this legislature be the legislature that stands up and says yes we’re democrats but we’re New Yorkers first, yes we’re republicans but we’re New Yorkers first, yes we’re from downstate but we’re New Yorkers first, yes we’re from upstate but we’re New Yorkers first, and that matters most. And we’re here as New Yorkers not as democrats not as republicans not as independents we’re here as New Yorkers to serve the people of the state of New York and help this state through this crisis.

Let this 234th legislature stand up and write a new page in the history book of New York State government. Let this 234th legislature solve these problems at a time of crisis and bring this state to a place that it’s never been. We’re not just going to build back we’re going to build back bigger stronger than ever before. That’s what we’re going to do together. Thank you and God bless you.

Need for a New Approach

That is a welcome speech, especially from a Democrat who won the endorsement of unions. I certainly applaud the Cuomo's reference to 600 state agencies, most of which I am sure are totally useless, if not counterproductive.

I also applaud reference to education funding, medicaid and state and local mandates.

"We want to try a new approach" said Cuomo. What he should have said is "We need to try a new approach, and we will."

Of course the unions did not like the his speech one bit. Public unions always want to raise taxes. It is their number two mission, just after expanding membership.

The one thing Cuomo did not address at all regards the need to cutoff defined benefit plans for new public union workers immediately.

Sounding Mightily Republican

The Suffolk Times said Governor sounded mighty Republican in ‘State of the State Address’ http://suffolktimes.timesreview.com/201 ... e-address/

Local GOP legislators sounded pretty giddy following Wednesday’s first “State of the Stateâ€