The New York Times reported today that Illinois has increased its state income tax rate by 66 percent. But that state had a state and local tax burden, as a percent of its residents' personal income, that was well below the national average in FY 2008. Most states could raise taxes, increase debts, and cut the quality of their public schools, and still have a lower state and local tax burden and lower debts as a percent of personal income than New York, and better schools than most New York City children have had for the past 40 years. So what is New York supposed to do?
The Times also reports that the federal government is accusing New York City of fraudulently authorizing unneeded 24 hour personal care for seniors since 2006, and demanding that the city pay tens and perhaps hundreds of millions of dollars back. It believes a change in state law in 2006, eliminating the city's share of personal care Medicaid expenditures, is responsible for the unnecessary spending. The city's likely defense? It has always overbilled for home and personal care. In the late 1990s, New York accounted for half of all the personal care expenditures in the United States — it is less today. And given the political clout of those who benefit in Albany, the city has no choice but to authorize, justified or not. The change in the law has nothing to do with it.
