Accelify Blog

Kentucky House Passes Compromise Bill to Resolve Medicaid Budget Shortfall (KY)

March 30, 2011

FRANKFORT, Ky. — The Kentucky House overwhelmingly passed a bill Monday afternoon to resolve the state’s Medicaid shortfall without cutting state funding for education.

But it may not be popular with either Senate President David Williams or Gov. Steve Beshear, House Speaker Greg Stumbo admitted.

House Bill 1, the product of a week of negotiations between Democratic and Republican House leaders, passed 94-4 and now goes to the Senate. The four “No” votes were cast by Republicans.

“The governor’s probably not going to be happy with this; he probably would have preferred his version,” said Stumbo, D-Prestonburg. “I would say Sen. Williams probably would have preferred his version.”

Indeed, Beshear rele ased a statement later saying his original proposal remains “the most responsible approach.” But he added: “I am glad to see that they agree with me that we should not balance the Medicaid budget on the backs of our schoolchildren and college students.”

Williams, of Burkesville, was not immediately available for comment.

But Senate Majority Floor Leader Robert Stivers, R-Manchester, said of the House compromise: “It got passed quicker than Sherman went through Georgia. Now as to the substance of the compromise, we haven’t seen it. We were not consulted on it.”

Stumbo said he expected the Senate won’t accept the House version and that it would end up in a House-Senate conference committee this week.

During the regular legislative session that ended March 9 in a deadlock, Beshear and the Democratic-controlled House favored a plan to balance a Medicaid shortfall this year with $166.5 million in funds borrowed from next year’s Medicaid budget.

The hole that causes in next year’s budget would be filled by savings generated by “managed care” approaches to delivering Medicaid services.

Williams and Senate Republicans say Beshear won’t find those savings and the result will be worse budget problems next year. Instead they propose to cut spending for nearly all state agencies, including public schools.

Under the House compromise approved Monday, Beshear would be given a chance to show that his plan to save Medicaid dollars is working. But he must report to the legislature by Aug. 15 showing the Medicaid savings he expects to achieve in the 2011-12 fiscal year.

If the savings fall short of balancing Medicaid, the compromise bill requires B eshear to make across-the-board spending cuts on Oct. 1 to make up the difference. But public schools, universities and a few other selected areas would be exempt.

Parts of the compromise attempt to address non-Medicaid budget issues raised in the Senate’s proposal.

For example, the compromise requires the governor to still cut $169 million from state government in 2011-12 by trimming recurring expenses, not one-time cuts. Beshear would not be permitted to furlough state workers to achieve those savings.

The compromise bill passed the House with much more support than Beshear’s proposal, which passed during the regular legislative session by a vote of 80-19. House Minority Floor Leader Jeff Hoover, R-Jamestown, called it “a very good approach to solving the issue.”

Rep. Jim DeCesare, R- Rockfield, complained during the House debate that while the compromise was explained during House party caucuses, members did not have a chance to see the bill until just before the floor vote.

And Rep. Stan Lee, R-Lexington, had several problems with the compromise. “How’s the governor going to demonstrate those savings?” Lee asked. “Who’s going to score those savings?”

Rep. Joe Fischer, Fort Thomas, and Rep. Tom Kerr, R-Taylor Mill, cast the other no votes.

Monday was the sixth meeting day of the special legislative session. But because lawmakers are paid for each day from when a session starts until adjournment, it was the eighth day lawmakers have been paid.

The Legislative Research Commission estimates it costs taxpayers $63,689 per day when the Genera Assembly is in session.