Accelify Blog

Arizona Governor Scales Back Plan to Cut Medicaid (AZ)

March 30, 2011

PHOENIX (AP) – Gov. Jan Brewer on Tuesday released a rewritten plan to scale back Arizona’s Medicaid program to help close a $1 billion shortfall as Senate Republicans unveiled a budget proposal that includes the governor’s original approach.<br /&g t;

The Senate majority’s budget proposal would have Arizona finish the current fiscal year with a shortfall but put the state back in the black in the next fiscal year with deeper spending cuts than Brewer has proposed.

The Senate Republicans’ plan includes Brewer’s now-revised plan to suspend eligibility for approximately 250,000 childless adults in the fall. That’s about a fifth of the Arizona Health Care Cost Containment System’s enrollment.

Her revised version released Tuesday would eliminate coverage for the same group but to allow people currently enrolled to stay on the program. It also would institute various cost-saving steps.

With people leaving the program for various reasons, her administration estimates that would result in 100,000 fewer people being covered after a year.

"Nothing about this plan is pain-free," Brewer said in a statement. "But it strikes a balance by creating a Medicaid program that is more fiscally responsible while keeping its core promises to the Arizonans who depend upon it."

The Senate Republicans’ plan has approximately $400 million of cuts beyond those proposed by Brewer. They include 172 million from K-12 schools, $65 million from universities and $67 million from health programs and social services.

Other savings in the plan, which is scheduled for Senate consideration Wednesday, would come from shifting nearly $100 million of prison and Motor Vehicle Division costs from the state to local governments.

The plan omits roughly $500 million of borrowing and funding delays that Brewer proposed to avoid a shortfall when the current fiscal year ends June 30.
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Instead, the Senate Republicans’ plan would leave the state with a $374.1 million shortfall on its books on June 30 but, after the additional spending cuts and other changes, have a $5 million surplus a year later.

The Arizona Constitution requires the state to have a balanced budget but the state previously has ended a fiscal year with a shortfall. However, that shortfall wasn’t formally acknowledged on paper in advance, as is being advertised under the Senate Republicans’ plan.

Senate Appropriations Chairman Andy Biggs, R-Gilbert, said the Senate Republicans’ budget plan is honest in that it admits the state budget isn’t structurally balanced and doesn’t attempt to paper it over with debt and "gimmicks" that the state has used in recent years of the continuing budget crisis.

Biggs said the budget proposal essentially treats the last three months of the current fiscal year and the entire next fiscal year as one 15-month budgeting period. The state won’t have a cash flow problem within that period, he said.

Brewer proposed roughly $1 billion of spending cuts in her January budget proposal for the next fiscal year.

A Democratic leader, Sen. Leah Landrum Taylor of Phoenix, said the proposed budget cuts to education and health care "would completely devastate our state as it stands."

Landrum Taylor also criticized the Republicans’ use of their two-thirds majority to suspend public-notice rules in order to start and finish Senate action on the budget bills on Wednesday.

"You don’t even have time for the public to weigh in their concerns, to even get down here, because it’s flying through the process,&amp ;quot; Landrum Taylor said.