Schumer: Senate Passes Much Needed Budget Relief for New York City and State - Proposal Will Included Estimated $500 Million for the City and $2.3 Billion for the State

Press Release

U.S. Senator Charles E. Schumer today said that the Senate has passed the Senate jobs bill that 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 said the proposal will send the State an estimated $2.3 billion over the first six months of 2011 with the city receiving an estimated $500 million. Schumer said this money will help reduce the severity of budget cuts.

"This money will be a tremendous shot in the arm for the State and City budgets and help stave off layoffs, and keep cops, firefighters and teachers on the job," Schumer said. "This funding will help alleviate, not it will not eliminate, the tough choices facing the State and City during these difficult times."

The Senate jobs includes a provision that extends for an additional six months the two-year 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.

The provision that is part of the bill will extend the FMAP boost passed in the stimulus for an additional six-months covering the first six months of Fiscal Year 2011. The total nationwide boost will send states an estimated $24.7 billion with New York State slated to receive approximately $2.3 billion and New York City expected to receive approximately $506 million. All data is based on preliminary projections provided by the New York State Association of Counties (NYSAC) and is subject to New York State Social Services law, Medicaid claims experience, and other economic conditions.

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 three-year 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.

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