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Gov. Andrew Cuomo’s 2012 budget proposal includes a state takeover of counties’ Medicaid cost increases, partially fulfilling a longtime wish of local governments across New York.

Medicaid costs have been growing steadily for several years, with governments groaning under the increased burden.

Counties, Cayuga County among them, have criticized the state for saddling them with the increases — up to three percent a year — without any meaningful reform to curb them in the future.

The rhetoric came to a head with the 2 percent property tax cap that passed in 2011 with Cuomo’s backing. Cayuga County Administrator Thomas Squires called that a subterfuge that takes the attention off the real problem in Albany.

In Cuomo’s 2012 budget, he proposed to have the state pay for yearly Medicaid cost increases after a three-year phase-in period.

At the same time, Cuomo proposed a new tier in the pension system and an optional 401(k) program for new hires. Those ideas have angered unions and still need to pass the state Legislature for final approval.

In Cayuga County, reaction to the pension news was guarded but grateful.

“I think it’s fantastic if they can actually ever do it,” said David Axton, chairman of the county Legislature’s Ways and Means committee. “For the state to impose the 2 percent (cap) on us and not come up with some kind of plan is irresponsible. So I’m cautiously optimistic that they’ll come up with a way to handle those costs. ... But the proof is in the pudding.”

Even under the new plan, the state will not assume responsibility for the current Medicaid share. That makes Cuomo’s proposal a compromise that could succeed in the state Legislature.

“It’s bold enough that you could look at it and say it’s of some significance, but it’s also slight enough that it might be passable at the state level,” Squires said.

The state, of course, has its own budget hole to fill, and is no more eager than the counties to take over a rapidly growing expense. But it has the power to change the Medicaid system itself and find ways to keep costs down.

“As a starting point, if the state has to absorb the full increase in the program and they have to feel that increase in the way counties have for years, it may motivate them to keep those costs down more,” Squires said.

Legislator Michael Chapman said he hopes the takeover in Medicaid increases is only a first step in more comprehensive mandate relief.

“Anything the state wants to take without imposing additional fees would be a wonderful thing,” he said. “I think this a good step in the right direction. I’m hoping that if this proves successful, maybe in the next round they’ll take a little deeper cut into the responsibility.”

Staff writer Justin Murphy can be reached at 282-2237 or justin.murphy@lee.net. Follow him on Twitter at CitizenMurphy.

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