SCHUMER: OBAMA BUDGET INCLUDES MUCH NEEDED BUDGET RELIEF FOR CASH-STRAPPED CITY AND STATE - BOTH ARE THREATENING LAYOFFS
Proposal Includes More Than $3 Billion For New York State And Hundreds Of Millions For NYC
President's Budget Includes Extension of the Boost in Federal Medicaid Reimbursements Originally Passed As Part of the Stimulus
Aid Will Help Stave off Local and State Tax Hikes and Prevent Layoff of Cops, Firefighters, Teachers and Others in the Middle of Already High Unemployment
U.S. Senator Charles E. Schumer today discussed how President Obama's budget, released earlier today, includes billions of dollars in budget aid for New York City and New York State. The proposal will extend the boost in federal Medicaid reimbursements, called FMAP, which was originally passed as part of the American Recovery and Reinvestment Act. Schumer will say the proposal will send the State more than $3 billion over the first six months of 2011 with the city receiving hundreds of millions in additional aid. Schumer will say this money will help mitigate possible tax hikes and reduce the severity of budget cuts.
"In this economic climate, we must take action to prevent unemployment from going even higher. This money will be a tremendous shot in the arm for the cashstrapped State and City budgets and help stave off layoffs, and keep cops, firefighters and teachers and other vital public servants on the job. It will also mitigate future tax hikes and draconian cuts to services," Schumer said. "This funding will help alleviate, though it will not eliminate, the tough choices facing the State and City during these difficult times."
Schumer today said President Obama's budget includes a provision that extends for an additional six months the twoyear increase in FMAP that was passed as part of the stimulus package. The original FMAP increase sent states and localities $87 billion for 2009 and 2010. By the end of 2010, New York State will have received an estimated $11.1 billion and, in addition, New York City should receive between $1.4 billion and $2.1 billion from the federal government.
The provision that is expected to be included in the President's upcoming budget will extend the FMAP boost passed in the stimulus for an additional sixmonths covering the first six months of Fiscal Year 2011. The total nationwide boost will send states an estimated $25 billion with New York State slated to receive approximately $3 billion and New York City expected to receive between approximately $430 million and $600 million.
The Federal Medical Assistance Percentage (FMAP) is a matching rate enacted in 1965 that determines the federal funding share for state Medicaid programs. The federal government matches state funds spent on Medicaid, based on the state's FMAP. The FMAP varies from state to state; and New York's FMAP is 50%. Thirteen states have FMAPs equal to the 50 percent floor in 2009 (CA, CO, CT, DE, MD, MA, MN, NV, NH, NJ, NY, VA, WY). By law, the FMAP cannot be lower than 50 percent, or higher than 83 percent. The FMAP formula is designed to account for income variation across the states and is based on rolling threeyear average per capita income data for each state. The Department of Commerce's Bureau of Economic Analysis calculates FMAP annually.
During an economic downturn, as state revenues become stagnant or decline, the number of Medicaid beneficiaries increases because of job losses and the health care coverage that comes with employment.
