The intercept plan is failing
A reader sent us some very interesting info about how the intercept plan will probably end up costing the area money (we’ve already seen that it’s hurting suburban schools — see this also). He goes into a lot of detail, but, simply put, the plan costs the area money if sales tax receipts grow more rapidly than 3% per year. Here’s the details from the reader’s email after the dashes:
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Saturday’s D&C reports:
In Monroe County, where sales tax revenue grew 3.4 percent from January-October 2006 to January-October 2007,
An Oct 2 City Newspaper article says:
The state has capped the growth at 3 percent for all counties that didn’t buy into the intercept. Monroe County adopted the intercept (it’s the only one that did), so its Medicaid growth will be tied to the growth in sales tax revenue - whatever that is.
snip
But the savings will simply be the difference between the rate of Monroe County’s Medicaid growth and the 3 percent cap that applies to all other counties.
If we didn’t elect into the intercept, our Medicaid expense growth would be capped at 3%. But since we elected into the intercept, our Medicaid expenses are now tied with our sales tax revenue, which grew 3.4% over the ten month period ending Oct 2007.
This means we will be paying .4% more in medicaid expenses than if we did not elect into the intercept.
In real dollars, if my calculations are correct (they’re based on $158 million in medicaid expenses for 2007), a 3% increase in medicaid expenses would equal $4.74 million. That’s the amount Monroe County would have paid in increases had we not elected into the intercept. A 3.4% increase equals $5.372 million in increased medicaid expenses.
This means Monroe County is going to pay $632,000 more simply because we elected into the intercept. That’s a shame.
Related posts:
You should run for County Executive because you actually know how to do math.
As I mentioned before, Maggie is gradually selling off the county’s sources of future revenue. Her approach is detrimental to the condition of our county government from a financial planning perspective.
Actually, I think “pawning off” is better terminology.
[...] isn’t like you haven’t heard this before. Reread this post about the intercept and sales tax receipt growth and Maggie’s original position (she was against the [...]