YOU ARE HERE: Central Kentucky Home→Collections→Governor

Senate attempts to resolve Medicaid budget shortfall

March 31, 2011|Tom Buford | State senator

The State Senate adjourned Thursday night having signed the Senate Committee Substitute to House Bill 1, legislation to resolve the Medicaid budget shortfall. Without even a need for a conference committee, the bill passed the House of Representatives overwhelmingly with only two no votes.

The Senate proposal trusts but verifies our plan, which credits the governor for savings already achieved, is a responsible proposal that fully funds Medicaid services this year while protecting the taxpayer and holding the governor accountable. The governor and the secretary of health and family services have been adamant in press conferences and committee testimony that they can come up with $139 million in efficiencies and managed care cost savings to fill the Medicaid budget shortfall in fiscal year 2012. They want to move next year’s dollars to pay off today’s bills.

But what happens if these savings aren’t achieved? During the last budget, the General Assembly asked the governor to achieve certain cost savings, but he was unable to fulfill that commitment. In addition, private companies have yet to be solicited for managed-care plans that have to be implemented by July 1. Who will be left holding the bag? Failure to achieve these savings can lead to a $750 million cut in Medicaid services next year.

To ensure that our most vulnerable population is protected as well as the taxpayer, the Senate proposed small reductions of .355 percent to most state agencies during the final three months of FY 11 and 1.74 percent reductions in FY 12. There would be no cuts to the basic school funding formula or SEEK and postsecondary education during FY 11. But on Jan. 30, 2012, if the governor doesn’t make his cost targets, SEEK funding would be reduced by .812 percent and universities by 1.74 percent. It is important to note that if the governor achieves even 82 percent of his cost-savings targets, the proposed education cuts would be fully restored. Agency reductions would apply to the legislative branch as well as the judicial branch and the governor is prevented from furloughing any more state employees.

The governor’s cost savings would be evaluated and verified by an independent accounting firm working in conjunction with the Consensus Forecasting Group, an independent group of economists charged by the state to make budget and economic forecasts. This is a common sense plan.

Here is the problem, however. On Friday, the governor vetoed all the accountability measures, all the limits to debt restructuring and all reporting requirements. In addition, he vetoed the provision preventing him from furloughing state employees. It appears that there was some agreement struck between the governor and the majority party in the House of Representatives. The House passed the bill with the understanding that the governor would veto all the safeguards in the legislation with the end result that the governor is now free to borrow from tomorrow to pay for today’s debts with no accountability whatsoever. This is wrong. The state will now face even deeper cuts next year if the state cannot adjust our budget, much like every other family out there in these difficult economic times. It is now the governor’s budget but unfortunately everyone’s problem. I hope that the House of Representatives will reconsider their actions and join with us to override the vetoes.

Please call me toll-free at 1-800-372-7181 or TTY 1-800-896-0305 with any questions, concerns, or comments. You can also find us on the Web at www.lrc.state.ky.us.

|

|

|