Kaiser Daily Health Policy Report Rounds Up Latest Action on State Budget Plans

With many states facing budget shortfalls, governors are calling for cuts in health care programs to balance their budgets. The following summarizes recent budget proposals.

• Connecticut: Facing a $350 million budget deficit in this fiscal year, Gov. John Rowland (R) has "scrapped" plans to spend $14 million on mental health services in 2002-2003. To cover this year's budget deficit -- which has grown by $150 million since the end of December -- Rowland said he would consider increasing the state's cigarette tax to $1 a pack. Any revenue from the tax should support health care costs -- the fastest growing expenses for the state -- and not anti-smoking programs, Rowland said (Altimari, Hartford Courant, 1/22).
• Georgia: In his budget for fiscal year 2003, Gov. Roy Barnes (D) has proposed eliminating a planned expansion of Medicaid coverage to children in families with annual incomes of up to 150% of the federal poverty level (Savannah Morning News, 1/17). Barnes had proposed $235 million to cover the expansion, but an increase in Medicaid costs prompted the governor to delay the expansion (Goldberg, Atlanta Journal-Constitution, 1/17). Barnes' budget plan also recommends cutting $2.5 million from the Babies Born Healthy program, which provides prenatal care to low-income women (Savannah Morning News, 1/17).
• Iowa: In order to fund his "top priorities" -- health care and education -- in 2002-2003 and cover a $48 million Medicaid budget shortfall, Gov. Tom Vilsack (D) has proposed using $48 million from the state's "rainy day" fund and $60 million from a road-use tax fund. To further bolster the Medicaid program's budget, Vilsack proposed a 13% reduction in reimbursements to Medicaid providers, as well as using money from the state's tobacco settlement and a trust fund designed to pay for health care for seniors. Vilsack's plan also relies on receiving $10 million to $12 million in additional funding from the federal government (Okamoto, Des Moines Register, 1/19).
• Kentucky: Gov. Paul Patton (D) has proposed a $14.4 billion budget, two-year spending plan that would transfer funds from a variety of programs, including health care services, to balance the state's budget. For example, $49 million would be taken from Kentucky Access, which provides health insurance to low-income residents who are uninsurable in the private market. In addition, Patton said that because the state's Medicaid program faces a possible $200 million budget shortfall, the program could face cuts in services (Brammer, Lexington Herald-Leader, 1/23).
• Massachusetts: An 11% increase in funding for the state's Medicaid program -- mandated by the federal government -- would be paid for by delaying payments to the state's pension fund and a cutback on lottery prizes under acting Gov. Jane Swift's (R) fiscal year 2003 budget proposal. Although Swift's plan would increase overall Medicaid program spending, her plan also calls for the elimination of dental benefits under the program. Swift's budget plan also calls for cutting $50 million from public health outreach and education programs and $29 million from antismoking efforts. The budget proposal would cut $11 million from disease screening and prevention programs, including osteoporosis prevention and screening for breast and prostate cancers (Klein, Boston Globe, 1/24).
• New York: Gov. George Pataki's (R) $88.6 billion budget proposal for the fiscal year beginning in April includes an almost $3 billion increase in health spending. Much of the health care spending in the budget is based on a package that in part would pay for wage increases for health care workers in the union 1199/SEIU. The state Legislature recently approved that package. The "major increase" in health care appropriations comes at the expense of other parts of the budget, as health care was "not only ... shield[ed]" from cuts, but money was "funnel[led]" to it from other parts of the budget. The budget is also based on Pataki's assumption that the state will receive more than $800 million in federal Medicaid funds. Federal officials, however, have said that funding is "unlikely to materialize." Pataki's budget plan does make some cuts to health care services; for example, the states' AIDS Institute would lose 12% of its funding (Perez-Pena, New York Times, 1/23).
• Wisconsin: Despite a $1.1 billion budget shortfall this year, Gov. Scott McCallum's (R) plan to balance the budget "spare[s]" the $2.7 billion the state has earmarked for health and social service programs in this fiscal year and next. No cuts were made to programs such as BadgerCare, which provides health insurance for low-income residents ineligible for Medicaid, and FamilyCare, which provides long-term care services. In addition, McCallum's budget plan keeps $5.8 million in grants to the Marquette University Dental School and funds programs for women's health screenings, pregnancy counseling and cancer screenings. McCallum's budget also "protect[s]" the Community Options Program and Community Integration Program, which provide long-term care and cost $768.2 million over a two-year budget cycle (Chaptman, Milwaukee Journal Sentinel, 1/17). However, the budget does make cuts in the state's revenue sharing program with cities and counties, which may force the localities to make cuts in programs for people with disabilities or the elderly (Chaptman, Milwaukee Journal Sentinel, 1/23).