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New Health Tax Included in Budget; Debate Over Ethics Needs To Be Had

By Assemblyman Will Barclay
We have heard a lot from the Governor’s office about the success of New York’s Health Exchange. The exchange was set up pursuant to ObamaCare which mandates that all Americans obtain health insurance.

The exchanges, which are either set up by individual states or by the federal government (when a state decides not to opt into the program), are, in theory, supposed to provide a market for people to purchase health insurance.

New York, pursuant to an executive order of the Governor, set up its own exchange.

Compared to other states and to the federal government’s system, New York’s exchange has had fewer reported problems.

Last week, the Governor announced that more than 2 million New Yorkers have now purchased insurance on New York’s exchange.

Less reported is the fact that approximately 1.5 million of these New Yorkers are Medicaid eligible and therefore will have government paid health insurance.

The Governor’s office is predicting that by 2016, New York will have more than 6 million people enrolled in Medicaid.  This is about 30% of New York’s total population.

Although not mentioned in his State of the State address, the Governor, in his 2015-16 budget proposal is seeking to raise $69 million to cover the cost of New York’s health exchange.

He is proposing to raise this revenue by taxing health insurance policies.

Initially, the federal government paid the cost of setting up the exchange but that money has run dry.

Interestingly, those states that opted not to set up their own exchanges and instead rely on the federal government’s health insurance exchange will not have to provide revenue for the operation of the exchange.

The idea that the Governor is proposing to tax health insurance policies to cover the cost of New York’s health exchange is counterintuitive in light of the fact that the exchange was supposed to lower the costs of health insurance.

Only government could come up with a system that is supposed to lower the cost of health insurance, then tax health insurance policies to pay for that system, thereby increasing the cost of health insurance!

While New York deserves credit for setting up an exchange that has had less problems than the federal exchange, it’s unfortunate that we now have to pay for the cost of administering this exchange.

So-called Ethics Reforms Skirts Root Problems

Putting aside New York’s health exchange and Cuomo’s proposed tax on health insurance policies, the Governor announced last week that he is proposing various so-called ethics reforms.

He is proposing several measures that I sponsor in the Assembly and for which I strongly advocate.

First among those is ending pensions for elected officials who are convicted of public corruption.

This seems like a no-brainer and, indeed, when polled, an overwhelming number New Yorker support this idea.

The Governor also renewed his call for public financing of campaigns.

Critics, including myself, consider this welfare for politicians, and I believe it will do nothing to clean up Albany.

What is troubling is the Governor is claiming that he will not agree to a budget unless the Legislature agrees to all of his ethics proposals.

He is framing the debate as if the Legislature is recalcitrant in passing his ethics reform proposals because the Legislature doesn’t want to change the status quo.

Maybe that’s the case with some individual legislators, but I welcome ethics reform.

However, my ideas differ from the Governor’s in what is meant by reform.

His reform proposals do not include limits on leadership terms or decentralizing control from our current three-men-in-a-room systems, two changes that are desperately needed in Albany.

The Governor claims he needs a stick in order to force the legislature to pass his proposals.

This is too bad because it is forcing the Legislature into an either/or scenario that will make compromise, which will be critical in getting a budget passed on time, impossible.

There are legitimate policy reasons to disagree with a number of Cuomo’s proposals and it is heavy handed of him to try to use the budget as a hammer to push through a few poorly conceived proposals under the auspices of ethics reform.

This should be a standalone proposal with a public hearing, separate from the budget.

This is the least that taxpayers deserve in light of all the scandals and public corruption that have plagued Albany in recent years.

If you have any comments or questions regarding this or any other state matter, please feel free to contact me.

My office can be reached by mail at 200 N. Second St., Fulton, NY 13069, by e-mail at [email protected] or by calling (315) 598-5185.