Hoover Sticks His Neck Out to Cower
We haven't written much about the effort to stem the Medicaid shortfall. When the budget was passed in 2010, a faulty and reckless assumption was made by the legislators in Frankfort:
One of the tricks our legislators used to balance the recent budget was an assumption that the federal government would find an additional few hundred million to give to the state's Medicaid program.
The federal spending bill has been delayed passage in Washington as the US Congress struggles to figure out how to pay for the massive new spending initiative/transfer to states.
Governor Beshear has no empathy for such questions about how can taxpayers possibly afford the new spending, however. He wants the gift from taxpayers and he wants it now!
Gov. Steve Beshear says the state could come up nearly $240 million short early next year if a federal spending bill defeated by a Senate Republican filibuster doesn't pass.
...
Beshear said that having to re-balance the budget to offset the loss of nearly $240 million would be a "horrendous" task. He said virtually every state program would face significant reductions.
Because the federal government had no money to give, the funding never materialized. We knew it would happen, the Congress that was about to be retired by the voters in last year's elections knew it, and Governor Beshear and the General Assembly knew it too.
Now, the program faces a $166 million shortfall this year. And here's the boring math:
The total of state funds and matching federal funds budgeted for 2011 and 2012 in the original budget were $5.5 billion and $6.1 billion.
In 2012, $1.4 billion in state funds were budgeted to receive $4.3 billion in matching funds. Because of their faulty assumption about receiving federal funds, only $777 million were budgeted to receive $4.3 billion in federal matching funds in 2011. There's the shortfall. Frankly, we're surprised that $166 million is enough, but finding that sum for Medicaid this year will apparently make Medicaid whole, creating $5.8 billion in total Medicaid spending this fiscal year.
Steve Beshear's original plan, and HB 305 as originally introduced, was simply to steal the $166 million needed in 2011 from 2012's budget.
Attempts to plug a $350 million hole in the Medicaid budget this year by borrowing it from the next year will likely lead to a budget hole next year, as a year-on-year $625 million increase is now budgeted to be a $125 million decrease.
If the borrowing plan passes, instead of Medicaid spending rising from $5.5 billion to $6.1 billion, it will be budgeted to decrease from $5.8 billion to $5.7 billion, a $426 million reduction and a $750 million swing in relative expectations.
Beshear calls this $750 million swing "a viable alternative to balance our Medicaid budget".
We think that's as foolhardy as expecting the federal monies in the first place. So does David Williams.
The Senate amended HB 305 to reduce spending across the board to right the budget ship and keep the Medicaid budget in reasonable shape for the next fiscal year.
After all, that's what Beshear proposed in June, remember:
Beshear said that having to re-balance the budget to offset the loss of nearly $240 million would be a "horrendous" task. He said virtually every state program would face significant reductions.
No matter, Beshear has a grand opportunity to grandstand:
"Sen. Williams wants our schoolchildren, our college students, our seniors, our veterans, our state police, our prosecutors, our social workers and many others to pay for a shortfall in the Medicaid budget," said Gov. Beshear. "I won't stand for one penny to be hijacked from our school systems, nor one cent stolen from public safety to protect our families. My proposal fixes Medicaid within the Medicaid budget without these painful and unnecessary cuts."
What's surprising is that House Republican Leader Jeff Hoover decided to use the opportunity too:
House GOP sides with Gov. Beshear on state budget
House Minority Leader Jeff Hoover, in a written statement, said that cutting education to fix problems in Medicaid was a bad idea.
"I and the other 41 members of the Kentucky House Republican Caucus do not believe it is good policy to shift funding from education at a time when many of our school districts are counting pennies to balance their own budgets," Hoover said. "It's a step in the wrong direction."
The original House proposal is clearly ridiculous. And across the country, Republican Leaders have stepped up to the challenges of much larger budget dilemmas, challenging entrenched interests like teacher's unions. But instead of quietly negotiating to improve the proposal, Hoover aligns himself and his caucus with the choice to borrow from next year and see if we make it, the all-too typical CYA-move that kicks problems down the road instead of addressing them.
We're unimpressed.
We wonder if he really does speak for all 41 members of his caucus, like Phil Moffett running mate Mike Harmon...
