Federal Aid Leaves Medicaid Short, Provides Extra for Schools (KY)
September 10, 2010
Congress’ recent effort to help the states financially will provide $135 million in unanticipated aid to Kentucky schools — but stil l leaves a $470 million hole in the Medicaid budget.
In making that announcement at anews conference Thursday, Gov. Steve Beshear blamed the Medicaid shortfall on the General Assembly.
He said legislators “assumed we would get millions more and balanced their budget on that assumption. … I called it ‘a hope and a prayer’ when they came up with it. It leaves us in areal crunch.”
For their part, legislative leaders accused the administration of stonewalling committees that were seeking ways to contain Medicaid’s burgeoning cost.
The amounts for Medicaid and the schools are roughly the same as the projections made at the time Congress passed the Education, Jobs and Medicaid Assistance Act in August.
The shortfall in Medicaid, a $5.2billion program that provides health care for 800,000 poor and disabled Kentuckians, results from an inaccurate estimate of anticipated federal assistance in the 2010-12 budget approved by the General Assembly in May.
Lawmakers projected that the federal government would provide an additional $238 million for the Medicaid program.However, the bill passed by Congress provides only about $137 million.
Because each state Medicaid dollar is matched by roughly four federal dollars, Beshear said the overall budget shortfall becomes $470 million.
Rep. Rick Rand, the Bedford Democrat who is chairman of the House budget committee, said in a statement that the House made its assumption only after rejecting those in Beshear’s original budget proposal.
Those included one that assumed the General Assembly would approve the legalization of slot machines at race tracks to raise hundreds of millions for the state budget.
Senate President David Williams,R-Burkesville, and House Speaker Greg Stumbo, D-Prestonsburg, said the Beshear administration has failed to provide cost-cutting plans and program data to the legislature’s continuing Medicaid Cost Containment Task Force.
“We’re very frustrated with the(Health and Family Services) Cabinet for not coming forward with this information,” Williams said at a news conference.
He also said Beshear included the legislature’s Medicaid assumption in the plan he presented to the May special session in which the budget was approved.
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Stumbo said in a statement, “I believe the governor when he says his administration is willing to work with us. We are hopeful that same spirit of cooperation will trickle down to his cabinet.”
At his news conference, Beshear pledged to cooperate with two legislative panels studying the issue. He said he expected recommendations that likely will have to be approved by the 2011General Assembly.
But Williams said that Beshear has the authority to make such cuts without action by the legislature, and that he should act quickly because less than 10 months are left in the fiscal year.
Sheila Schuster, a mental health and health care advocate, said “it’s without a doubt a difficult, difficult situation…. But in cutting costs I think it’s important to consider … the cost to people.”
Rich Seckel, director of the Kentucky Equal Justice Center and co-chair of Kentucky Voices for Health,agreed it’s a tough problem. He said he hopes it can be partly addressed by innovative approaches to improve management of the program.
But he also said some members of Kentucky Voices for Health “would be more than happy to revisit the tobacco tax.”
The 2009 General Assembly raised the cigarette tax to 60 cents a pack, from 30 cents. And a tax increase was the only option that Beshear ruled out as a way to solve the problem.
Williams, who like Beshear is running for governor in 2011, said it was a good thing that a tax increase has been ruled out.
As for the additional $135 million in education funds, Beshear said it will go directly from the federal government to local school districts — distributed through the normal formula for base school funding.
He said that some rules apply but that local districts have discretion in spending the money to help classroom instruction.
“As superintendents and school board members will tell you, these funds — though one-time in nature — will be a big help,” Beshear said.
Because they are one-time funds,however, he warned districts against spending the money on recurring costs.
Lisa Gross, spokeswoman for the Department of Education, said Education Commissioner Terry Holliday has encouraged local districts “to talk about giving teachers extra time for training for professional development, and for planning and working on curriculum for Senate Bill 1.”
SB 1, approved in 2009, requires education officials to create a new statewide student testing program and seeks to better prepare students for postsecondary education and work.