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FOR IMMEDIATE RELEASE: January 28, 2009

SCHUMER ANNOUNCES OBAMA STIMULUS PACKAGE TO SEND $1.6 BILLION IN DIRECT BUDGET AID TO UPSTATE NY COUNTIES - HELP EASE BUDGET GAPS & AVOID PROPERTY TAX HIKES; COUNTY BY COUNTY BREAKDOWN MADE PUBLIC

At Least $737 Million Expected in Direct Budget Aid; Over $860 Million Expected in Education Aid

Senator Says Billions in Aid Will Help Close the Budget Gap, and Be a Boon for Upstate New York Taxpayers, Schools, Hospitals and the Upstate New Yorkers they Serve

Schumer Fought to Include a Provision in the Stimulus that Sends Billions in Budget Aid Directly to the Counties - Not Through States - Ensures Upstate Counties Get Their Fair Share

With Upstate New York counties facing an historic budget deficit as the national economy continues to decline, U.S. Senator Charles E. Schumer today announced that the new economic stimulus package, The American Recovery and Reinvestment Act, will send nearly $1.6 billion over two years to Upstate New York counties in direct budget and education funding. Right now, the stimulus is expected to include $737 million in federal Medicaid relief for Upstate New York counties to help ease pressure on the overall budget, as well as a minimum of $860 million in education aid. Schumer today announced the county by county breakdown of the direct budget aid. Schumer also said that though the stimulus package will certainly help alleviate the state’s budget crunch, it won’t eliminate the problems and tough choices county and state officials are going to have to make.

“The stimulus package is going to give a big boost to Upstate New York. There is an overwhelming consensus that we should give aid to states and localities. The reason for it is very simple. For federal government to be pumping money in to the economy to reduce severity of the recession, while the states are taking money out of the economy by either laying people off or raising taxes, simply makes no sense,” Senator Schumer said.

Schumer said today that the economic stimulus package, now being drawn up by both houses of Congress and expected to be as large as $825 billion, will include at least $1.6 billion in direct federal aid to help Upstate New York counties close its budget gap and boost the city’s schools and hospitals, according to the Congressional Research Service. The bulk of the aid will come from two different programs – a temporary increase in the city’s FMAP allocation and significant increases to education aid programs.

FMAP

Under both the Senate and House proposals, the economic stimulus package is expected to include $86.6 billion boost in Federal Medical Assistance Percentage (FMAP) over the next nine quarters with Upstate New York counties slated to provide relief of at least $737 million. FMAP is a matching rate 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%.

·        Through an increase in FMAP, counties in the Capital Region will receive approximately $42.8 million in budget relief.

·        Through an increase in FMAP, counties in Central New York will receive approximately $44.1 million in budget relief.

·        Through an increase in FMAP, counties in the Hudson Valley will receive approximately $104.6 million in budget relief.

·        Through an increase in FMAP, counties in the North Country will receive approximately $23.7 million in budget relief.

·        Through an increase in FMAP, counties in the Rochester-Finger Lakes will receive approximately $55.8 million in budget relief.

·        Through an increase in FMAP, counties in the Southern Tier will receive approximately $27 million in budget relief.

·        Through an increase in FMAP, counties in Western New York will receive approximately $70.4 million in budget relief.

Schumer also outlined the county by county breakdown of direct budget aid (see attached report).

However, Schumer said the $737 million in savings would ease pressure on the entire budget, not just Medicaid. The significant relief to the overall state budget that result from an FMAP increase could be used for a variety of purposes that are not limited to Medicaid.

Schumer fought to include a legislative provision (the “county-local share”) that ensures that Upstate New York counties receive its fair share of the FMAP relief for their Medicaid programs. Since the enactment of the Medicaid program in 1966, Upstate New York has been required to share in the costs of services. New York is one of seventeen states where local governments share with the state in Medicaid participation. Counties are mandated by the state to contribute approximately $7 billion annually or about 32 percent of the non-federal share of the State's Medicaid Program.

Recognizing that New York State counties and the New York City locality are in dire need of direct fiscal aid and are forced to share the cost of Medicaid, Schumer - a member of the Senate Leadership and the Finance Committee which has jurisdiction over Medicaid – fought to ensure that a “local share” provision was included in the stimulus to ensure that New York State counties and localities received the billions in direct aid from FMAP as part of the economic stimulus plan.

In 2003, Congress approved a boost in FMAP for states during an economic downturn, of $10 billion in fiscal relief through a temporary FMAP increase of 2.95 percentage points for each state for five fiscal quarters. According to the Congressional Budget Office, more than half of the states reported that the 2003 increased matching rates enabled them either to avoid or delay making cuts or to make smaller cuts to their Medicaid program.

The Senate Finance Committee, of which Senator Schumer is a member, met last night to consider the Stimulus Package and the Committee reported the bill with a vote of 14-9.

Education Aid

The economic stimulus package will include approximately $550 million in direct education aid through the Title I and Special Education/IDEA federal formulas and $320 million for public school repair and construction, with Upstate New York estimated to receive a total of at approximately $865 million, according to the Congressional Research Service (CRS).

Congress is using several different formulas to deliver these critical funds to schools. These funds will be distributed using existing federal education funding formulas, such as the one used for Title I, No Child Left Behind and the Individuals with Disabilities Education Act (IDEA) and will be given in a way that gives states and districts the flexibility and tools they need to keep serving our children.

• Capital Region schools will receive approximately $87 million over two years.
• Central New York schools will receive approximately $113 million over two years.
• Hudson Valley schools will receive approximately $220 million over two years.
• North Country schools will receive approximately $55 million over two years.
• Rochester-Finger Lakes Region schools will receive approximately $133 million over two years.
• Southern Tier schools will receive approximately $68 million over two years.
• Western New York schools will receive approximately $175 million over two years.

Schumer have pushed for a robust amount of funding in the infrastructure portion of the package to be dedicated to school repair and construction to jump start school modernization programs. These dollars will fund 21^st Century classrooms that are energy efficient and provide the information technology and cyber infrastructure that will increase America’s competitiveness and give our students greater advantages in a global economy.

In addition, both the Senate and House bills include $79 billion in additional state fiscal relief funding, with $39 billion designated for local school districts, $15 billion to states as incentive performance grants, and $25 billion for other high priority needs such as public safety and education.

The economic recovery package, which was marked up in the Senate Finance and Appropriations Committees yesterday, is slated to be taken up by the full Senate next week. The full House will consider The American Recovery and Reinvestment Act today.  The goal of both Chambers is to have a final bill ready for the President’s signature by President’s Day.

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