Palmer says the Medicaid mandate is 44% of the Essex County budget. He says it was a big reason they had to over-ride the 2% property tax cap. 

In his speech, Cuomo acknowledged the need to help counties.

"Mandate relief is something everyone wants to do in concept, except no one wants to do when they hear what it really is," the governor said. "Hopefully this year, it's different."

In total, counties pay eight billion dollars toward Medicaid.   

One bill in the state legislature would have New York taking over all Medicaid costs in eight years. 

Cuomo made it clear, the state won't be taking over that expense any time soon.

"When we have a printing press, like the federal government, we will take over a program that costs 8-billion dollars," he said. "Until then, we don't have eight billion dollars."

The costs of Medicaid grow every year.  Back in 2005, the state starting capping those increases. Now, if the costs grow by more than 3% in a year, the state pays the extra. 

But Counties have complained. Their Medicaid costs rise at a 3% rate, but the state has now imposed a 2% tax cap on them.

"We understand the point," Cuomo said. "Hold county's totally harmless from any increase. This year, so they will be held harmless from all growth in Medicaid.  The state will pick up the cap."

County leaders, such as Dan Palmer in Essex County, were a bit deflated.  No takeover of all Medicaid costs.

"I guess it's a start," Palmer said. "It's certainly not what we were hoping for, but maybe in 10-20 years down the road it's going to start to look good."

Palmer says under Cuomo's plan Essex County will still be paying about seven million dollars for Medicaid in 10 years. And by then, seven million may be a much smaller percentage of the county budget. But this year, he says it will only save them $60 thousand.

We spoke with Republican State senator Patty Ritchie the afternoon after Cuomo's speech. She sounded supportive.

"This is a realistic approach, taking over the additional costs," said Ritchie. "At least counties will know what their costs are going to be from one year to the next, so it's a great way to start."

Republican Assemblyman Ken Blankenbush co-sponsored a bill for the state to takeover all Medicaid expenses. But he wasn't opposed to the Governor's more modest proposal.

"We will certainly be looking at that," said Blankenbush. "His proposal, plus our proposal to see if there's some kind of compromise on that."