State may get 70 percent of special Medicaid funding
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HARRISBURG -- It now looks like the state might get about 70 percent of the $850 million in additional federal Medicaid funding that it's been counting on, state Senate Republican leader Dominic Pileggi said today.
Nothing is certain yet, he said, but that would mean the state would get $595 million instead of the full amount -- assuming that the U.S. Congress approves the additional funds in the next month or so. Getting only 70 percent of the federal money would still require some employee layoffs, but not as many as with the loss of the entire $850 million.
Legislative leaders held a brief conference call this morning with Gov. Ed Rendell to talk about preparing a contingency plan to use in case Congress doesn't approve the full $850 million in Medicaid money. Specifics haven't been worked out yet, Mr. Pileggi said.
Cutting the $28 billion state budget to absorb the loss of $255 million "would be a smaller problem than losing the full $850 million, but it's still a problem," he said. "The governor is optimistic that we will get at least a substantial part of the $850 million. There is at least some basis for hope of federal action."
Mr. Rendell has said that up to 20,000 layoffs of state, county and municipal employees could be needed to absorb the loss of the entire $850 million in Federal Medicaid Assistance Percentage funds. The U.S. Senate may vote this evening on the additional funds, but the U.S. House isn't expected to vote until after Labor Day.
If the U.S. Senate defeats the funds tonight, then a contingency plan for cutting state spending is necessary immediately, Mr. Pileggi said. He said leaders may meet with Mr. Rendell on Wednesday morning about that.
"We need to plan for losing about 30 percent of the FMAP," he said.
If the Senate approves the extra FMAP money, it would a good sign, since the Senate is seen as a harder place for the money to pass than the House, Mr. Pileggi said.
One area likely to be examined for trimming is the additional $250 million provided for basic education this fiscal year. Mr. Rendell has insisted on the increase.
Mr. Pileggi said that basic education was one of the few areas in the budget that got "a large increase" both this year and last year.
"A reduction in the $250 million (increase) still puts school officials ahead of where they were two years ago," he said.
Other possible areas for cuts include:
• reducing the General Assembly leadership's $200 million surplus, aka "slush fund," which legislative leaders normally balk at doing.
• eliminating some Community Revitalization Grants (sometimes called "walking around money) included in the Department of Community and Economic Development Department budget, but this would meet objections from legislators who don't want to lose pet projects for their districts.
• trimming the $1.2 billion given to the 67 counties to operate public assistance and child welfare offices, which could cause layoffs in counties.
• further cuts in spending for state parks or state forests, in addition to those made for the last two years.
• reducing the $75 million tax incentive for films shot in Pennsylvania, which could mean fewer movies are made here.
First Published August 2, 2010 12:24 pm
