New York Senate Bill S05519

New York 2025-2026 Regular Session

• Introduced: 2/24/25
• Refer: 2/24/25
• Refer: 1/7/26

Caption

Phases out certain reimbursements for expenditures made by or on behalf of social services districts for medical assistance for needy persons, beginning with a 10% reduction for 2025, and ending with a 100% reduction for 2034, and remaining eliminated for each year thereafter.

Summary

This bill would phase out a state reimbursement program for certain social services district medical assistance expenditures. Under current law, New York reimburses local social services districts for a portion of Medicaid-related spending through a trend-factor-based calculation. The bill would replace that structure for the affected local governments with a schedule that reduces the reimbursable amount by 10% in 2025, 20% in 2026, and so on by 10 percentage points each year until the reimbursement is fully eliminated in 2034, after which it would remain eliminated. The bill also directs that the savings from these reductions be used entirely for property tax levy reductions or property tax rebates in the affected local governments, with the state comptroller determining the minimum required amount of property tax relief and notifying local governments in advance. It applies only to local governments covered by existing provisions governing property tax caps and school district tax limits, and it includes a special rule for counties that use the local sales tax intercept methodology so they receive a proportional reduction and apply the recaptured funds similarly.

Impact

The bill would amend Part C of Chapter 58 of the Laws of 2005 and effectively unwind a state aid/reimbursement mechanism tied to social services district medical assistance expenditures. It would reduce state-supported reimbursement obligations over a ten-year period, then eliminate them entirely, shifting the fiscal burden away from the state reimbursement structure and toward local budgeting decisions. It would also require the resulting savings to be passed through to taxpayers via property tax levy reductions or rebates, affecting counties and other local governments subject to the referenced municipal and education law provisions, as well as counties participating in the sales tax intercept program.

Sentiment

There is no recorded committee transcript or vote history in the provided materials, so no formal legislative debate or roll-call sentiment can be identified from the record here. Based on the bill text and caption, the measure appears fiscally driven and oriented toward property tax relief, suggesting support from lawmakers focused on reducing local tax burdens and opposition or concern from those worried about the loss of Medicaid-related reimbursement support for local governments. The available context does not show any amendments, endorsements, or objections.

Contention

The main point of contention is likely the tradeoff between reducing local property taxes and eliminating a long-standing reimbursement stream for social services districts. Supporters would likely emphasize mandatory property tax relief and local tax burden reduction, while opponents may argue that phasing out reimbursements could strain county and district budgets, especially for medical assistance costs associated with needy persons. Another potential issue is the bill’s use of a fixed 2024 expenditure baseline and its requirement that all savings be dedicated to tax relief, which limits local discretion over how to use the funds.