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New York Increases Funding of Mental Health Care for Kids, Including Cash Governor Says Will Reopen Hospital Beds
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Mental health programs for children and adolescents will get a major infusion of funds in New York state’s new $220 billion budget, which passed Saturday after contentious negotiations over criminal justice issues.
Legislators approved significant reimbursement rate increases for community-based mental health programs, as well as bonuses for frontline workers. The budget also includes $10 million to address staffing and capacity shortages at state-run psychiatric hospitals, though it does not earmark funds to reopen beds that were shut down under a “Transformation Plan” rolled out by former Gov. Andrew Cuomo. A measure proposed by the state Senate that would have committed New York to restore 200 state-run beds died in budget negotiations.
As THE CITY and ProPublica reported in March, New York has closed nearly a third of state-run psychiatric hospital beds for kids since 2014. Children in mental health crisis sometimes wait months for admission to the remaining beds, our investigation found.
“Governor Hochul has made addressing mental health issues a major priority for her administration,” wrote Jim Urso, a spokesperson for the governor, in an emailed statement. “With this level of meaningful and targeted investment, we can get those struggling with mental health issues the help they need.”
Some lawmakers say the investments do not go far enough. "Kids are languishing in emergency rooms or in acute care hospitals, waiting for the state beds," said Assemblymember Aileen Gunther, who chairs the state Assembly's mental health committee.
“We were flush with money this year,” Gunther continued. “We spent it on ‘Let’s give some money to the Buffalo Bills stadium before we make sure that every child has access to mental health care.’”
In all, the new state budget for the fiscal year through March 31, 2023, allocates $4.7 billion in operating funds to the state Office of Mental Health — a bump of nearly $800 million from the previous fiscal year. Funding will go up for a wide range of programs that serve children and adolescents, including residential treatment programs, crisis intervention teams for kids experiencing mental health emergencies, programs that bring mental health care into kids’ homes and a statewide initiative to integrate mental health providers into pediatricians’ offices.
The new money is intended to fill deep holes. In February, Gov. Kathy Hochul echoed what mental health care providers and advocates have contended for years: “For too long our mental health care system suffered from disinvestment,” she said.
As a result, mental health programs face chronic staff shortages, and children often sit on long waitlists for basic treatment — a problem that started before the COVID-19 pandemic but only grew worse as demand for kids’ mental health care spiked, our investigation found.
In a major shift, the budget makes hundreds of thousands of kids newly eligible for services like in-home therapy and planned respite care. These programs have historically been available only to low-income children on Medicaid, but will now be expanded to the nearly 390,000 kids on Child Health Plus, which covers children and adolescents whose family incomes are too high for Medicaid or who aren’t eligible for Medicaid because of their immigration status.
In theory, the expansion of eligibility is a big win for kids, said Alice Bufkin, the associate executive director for policy and advocacy at the advocacy group Citizens’ Committee for Children of New York. But nonprofit mental health providers have struggled to serve the children who were already eligible, and they’ll need a lot more financial help to hire staff and serve additional kids, Bufkin said.
“We are at such a deficit in terms of capacity after years of underinvestment in the mental health system. We absolutely want to work with state leaders to build on these new investments and to recognize that there is a lot of work to be done to make sure kids can actually access the services they need,” Bufkin said.
“We’re on Life Support, and We Need to Be Resuscitated”Like other health care providers, mental health programs in New York have faced critical shortages of staff during the pandemic. As THE CITY and ProPublica reported, state-run psychiatric hospitals are so short on nurses and social workers that many beds sit empty for months, even as acutely ill kids wait to get in.
Meanwhile, outpatient and community-based mental health programs — which struggled to stay fully staffed even before the pandemic — have seen an exodus of employees in the past two years. “We’re on life support, and we need to be resuscitated,” said Harvey Rosenthal, the CEO of the New York Association of Psychiatric Rehabilitation Services, at a New York State Assembly hearing on the mental health workforce in November.
That’s in large part because public and nonprofit providers can’t pay competitive salaries to clinical and other frontline staff, providers say. For many positions, community-based mental health organizations say they’re competing for employees with — and losing out to — fast food restaurants and retail outlets.
The new state budget attempts to stanch the bleeding, in part by doling out one-time bonuses to frontline health care workers, including mental health providers. Hochul proposed these spending measures as part of her plan to increase the size of the state’s health care workforce by 20% over five years.
“So to stop the hemorrhaging of health care workers,” Hochul said in her budget deal announcement Thursday, state officials need to stop talking about how “we owe them a debt of gratitude and pay them some of that debt. That means dedicating in this budget $1.2 billion for frontline health care worker bonuses.”
The budget also includes a measure, long sought by mental health agencies and advocates, that will provide a 5.4% cost-of-living adjustment in payments to service-providing agencies licensed by the state, including mental health and addiction programs. Under New York law, agencies that provide such services under contract with the state are supposed to receive a COLA every year, tied to inflation. However, the state budget has deferred the COLA nearly every year since the law was enacted in 2006 — a fact that has infuriated mental health advocates.
“For every year of his tenure, former Governor Cuomo robbed State-contracted human services workers of their mandated statutory COLA, depriving these workers of over $700 million in raises, and balancing the budget on the backs of low-wage workers and nonprofit community organizations,” the Human Services Council, which represents dozens of New York City nonprofits, wrote in January.
In response to a request for comment from Cuomo, Rich Azzopardi, a spokesperson for the former governor, sent the following statement: “Every budget is defined by the revenue you have and — if you intend to be fiscally responsible — reasonable growth that can account for future economic downturns and avoid fiscal cliffs. We never had bags of money from the federal government that enabled billions upon billions in new spending in an election year budget. I wonder what will happen once the Washington gravy train dries up?”
In her January budget proposal, Hochul said that the 5.4% COLA, which is primarily intended for employee recruitment and retention, would provide “immediate fiscal relief” to mental health providers, “enabling them to offer more competitive wages to their staff.”
Advocates say that the COLA and workforce bonuses are a great start, but it remains to be seen how big a dent they will make in the workforce crisis. “I know of an agency that has 270 job openings,” said Andrea Smyth, the president of the New York State Coalition for Children’s Behavior Health. “Right now, they post them and they get no one to apply. Does this amount of money get 270 people to apply — or does it get 15? That’s undetermined.”
Smyth added, “That said, this is more than we’ve gotten in decades.”
Some of the funding increases in the budget were made possible by an influx of federal COVID-19 relief money. An additional $111 million came from a financial maneuver that advocates say Cuomo could have made use of but didn’t. Under its Medicaid contracts, the state can claw back money from managed care insurance plans that fail to meet minimum spending requirements on mental health and addiction treatment for Medicaid recipients. In this year’s budget, the state will use two years’ worth of recouped money to fund increased reimbursement rates for mental health and addiction treatment clinics.
Advocates for community-based mental health providers hope the recouped funds signal an intention by the Hochul administration to increase oversight of managed care plans that participate in New York’s Medicaid program. “The state needs to step up surveillance, monitoring and enforcement of all the provisions that are in place to protect Medicaid beneficiaries and to guarantee access to care,” said Lauri Cole, executive director of the New York State Council for Community Behavioral Healthcare, which represents more than 100 mental health agencies.
“It’s about oversight of benefits that save people’s lives,” Cole added. “There should be nothing complicated about that.”
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America’s Top 15 Earners and What They Reveal About the U.S. Tax System
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Periodically, we get a glimpse into the financial lives of the ultrarich. A pro athlete signs a huge contract, a tech CEO sells a boatload of shares in their company, or a billionaire heir unloads a Manhattan penthouse. Based on these nuggets of information, the media speculates as to how much income the rich might bring in every year. But nobody actually knows.
Thanks to an analysis of its unprecedented trove of IRS data, ProPublica is revealing the 15 people who reported the most U.S. income on their taxes from 2013 to 2018, along with data for the rest of the top 400.
The analysis also shows how much they paid in federal income taxes — and it demonstrates how the American tax system, which theoretically makes the highest earners pay the highest income tax rates, fails to do so for the people at the very top of the income pyramid. The top 400 earners pay noticeably lower tax rates than the merely rich; and, if you include payroll taxes, a married couple making $200,000 a year could end up paying higher tax rates than a person making $200 million a year. (The full analysis is here; it includes selected names beyond the top 15.)
Names That Won’t Surprise YouScan the names on the list of the top 15 income earners and you’re certain to recognize several names — or at least the names of the companies they founded. Bill Gates hasn’t been involved in the day-to-day operations of Microsoft for over a decade, yet he still earned the most during the years we studied, reporting an average yearly income of $2.85 billion — and an effective federal income tax rate of 18.4%. Steve Ballmer, his former colleague, is also a well-known public figure, both for his time as Microsoft CEO and his current ownership of the Los Angeles Clippers NBA team. Ballmer’s average annual reported income of $1.05 billion landed him in the 10th spot on the list, and his effective federal income tax rate was 14.1%. The other side of the PC/Mac wars is represented here by Laurene Powell Jobs, widow of Apple founder Steve Jobs. Her average reported income of $1.57 billion ranked fifth-highest; she paid an effective tax rate of 14.8%. (ProPublica sought comment from everyone mentioned in this article. Nobody disputed the numbers cited here. Unless otherwise noted, representatives for people named in this article either declined to comment, declined to comment on the record or did not respond to requests for comment.)
Another well-known billionaire sits just below Gates on the list: Media and tech mogul and former New York City mayor Michael Bloomberg, with an average reported income of just over $2 billion, paid an effective income tax rate of 4.1%, by far the lowest rate among the top 15. (A spokesperson told ProPublica for an earlier article that Bloomberg “pays the maximum tax rate on all federal, state, local and international taxable income as prescribed by law,” and cited Bloomberg’s philanthropic giving.)
The presence of Amazon founder Jeff Bezos — either the first- or second-wealthiest person in America, depending on the day — won’t shock most people, but Bezos’s annual reported income during these years of $832 million put him only at number 15. He paid an effective tax rate of 23.2%; as we’ve previously reported, Bezos had so little income in a couple of recent years that he was able to pay $0 in federal income taxes in those periods.
Who Are These Others and Why Are They Paying Higher Tax Rates?Tech billionaires dominate the top 15, but hedge fund managers account for a full third of the names on this list, and some of their incomes were just as huge. Most of them paid relatively high effective tax rates, especially compared to most of the tech sector representatives. Hedge fund managers often make their money through short-term trades, which are taxed at a much higher rate than when tech titans cash in on long-term investments.
The highest-earning hedge funder is Ken Griffin, founder of the Chicago-based firm Citadel. From 2013 to 2018, he reported an average income of nearly $1.7 billion, putting him fourth on the list. Griffin paid a tax rate of 29.2% during these years. (A spokesperson for Griffin said the tax rates in the IRS data “significantly understate” what Griffin pays, because they were lowered by charitable contributions and do not reflect local and state taxes. He also said Griffin pays foreign taxes, which aren’t included in IRS calculations of effective tax rate.)
Israel Englander, co-founder of Millennium Management, paid at a 30.8% rate, while the co-founders of Two Sigma Investments, David Siegel and John Overdeck, paid tax rates of 31.6% and 34.2%, respectively.
Some of this variation in rates reflects how people structure their businesses under tax law. Income earned by publicly traded corporations is taxed at the company level. When it’s passed on to big shareholders, such as tech billionaires, it can come in the form of dividends, which are taxed at lower rates than ordinary income. By contrast, the income from some manufacturing companies and hedge funds flows directly to company owners, who pay taxes on it, resulting in higher effective tax rates on average.
Where Are the Heirs?Lists of the world’s wealthiest individuals are always heavily populated by heirs, ranging from descendents of old money to scions of more recently minted fortunes. Dozens of heirs made ProPublica’s list of 400 biggest income earners. Descendents and relatives of Sam Walton, founder of Walmart, claim 11 spots.
The DeVos family, heirs to the Amway fortune, also have multiple members in the top 400. Perhaps the best known is Betsy DeVos, who served as U.S. secretary of education during the Donald Trump administration. With a reported annual income of $112 million, she was the 389th-highest earner in this period.
Much like the tech titans who top the list, most of these heirs get their income from dividends or long-term investments, which are taxed at a lower rate. Their effective tax rates ranged from as low as 10.6% for Betsy DeVos to a high of 23% paid by Walmart heirTom Walton.
Don’t Forget the DeductionsAnother key way that some top earners reduced their tax liability was to claim significant deductions, often in the form of large charitable contributions. This is particularly true for wealthy investors who are able to make their donations with shares of stock. Thanks to a generous provision of the tax code, they can then deduct the full value of the stock at its current price — without having to first sell it and pay capital gains tax.
Michael Bloomberg achieved a tax rate of 4.1% from 2013 to 2018 by taking annual deductions of more than $1 billion, mostly through charitable contributions. From 2013 to 2017, he also wrote off an average of $400 million each year from what he’d paid in state and local taxes. The 2018 tax overhaul limited that deduction to $10,000 — but also introduced a huge new deduction for pass-through companies that Bloomberg benefited from.
Wait — What About the Celebrities?The earnings of actors, musicians and sports stars are a subject of nonstop scrutiny in the media, yet few celebrities cracked the list of the top 400 earners, which would have required them to report annual incomes of at least $110 million.
ProPublica’s trove has data on many celebrities. One who came close to the top 400 is basketball superstar LeBron James, who averaged $96 million a year in reported income. Grammy-winning singer Taylor Swift also came within reach of the top 400, averaging $82 million in reported income during these years. Actor George Clooney would have had to double his average income of $55 million to crack the top 400.
THE TOP 15Here are the details on the top 15 income earners. Read the full analysis of the top 400 here.
For the full list of America’s top 400 income earners and their tax rates, along with our methodology, click here.
Help Us Report on Taxes and the UltrawealthyDo you have expertise in tax law, accounting or wealth management? Do you have tips to share? Here’s how to get in touch. We are looking for both specific tips and broader expertise.