Kaiser Daily Health Policy Report Highlights News About Budgets in Seven States

Summaries of recent news about state budgets in Arkansas, Kentucky, Minnesota, Missouri, New Hampshire, Utah and Washington state appear below.

• Arkansas: Gov. Mike Beebe (D) has proposed using some of the state's projected $310 million surplus in the state General Improvement Fund for ongoing operations instead of capital items, the Arkansas Democrat-Gazette reports. State Sen. Gilbert Baker (R), the incoming state Senate Budget Committee chair, said Beebe administration officials have said that as much as $80 million of the surplus could be used for the rainy day fund, which would pay for the unfunded prison and Medicaid needs in Beebe's proposed budget (Blomeley, Arkansas Democrat-Gazette, 11/30).
  
  
• Kentucky: The current economic recession has led to record-high enrollment levels in Kentucky's Medicaid program, which is placing the state in a "dire" financial situation, according to state Rep. Jimmie Lee (D), co-chair of the Kentucky Legislature's Medicaid oversight committee, the Louisville Courier-Journal reports. Program enrollment is increasing by about 3,000 beneficiaries monthly; more than double what state officials had projected. Every 3,000 beneficiaries cost the state about $11.4 million annually, while the state faces a projected $456 million revenue shortfall. To close the gap, the state must either increase revenue or decrease spending to cover its share of the deficit cost, which is $55 million. Increasing revenue would mean either raising taxes or a temporary increase in the federal Medicaid funds, according to state Medicaid Commissioner Elizabeth Johnson. Spending reductions would mean either cutting services, reducing provider payments or reducing eligibility. Health advocates have suggested increasing the state's 30-cent-per-pack cigarette tax to increase revenue (Yetter, Louisville Courier-Journal, 12/3).
  
  
• Minnesota: State budget officials on Wednesday released a two-year economic projection that showed that the state is facing a budget deficit of between $4.5 billion and $6 billion, which could result in cuts to health care and other programs, the Minneapolis Star Tribune reports. According to the Star Tribune, the shortfall "could mean swift cuts in health care and social services, an area [Gov. Tim Pawlenty (R)] has repeatedly said is spiraling out of control." State Department of Human Services spending increased by 14% in the last budget. State Senate Taxes Committee Chair Tom Bakk (D) said, "That spending somehow has to get under control. Health care is going to bankrupt this state." Possibilities for increasing revenue include a 75-cent-per-pack increase in the state cigarette tax, which would yield an estimated $300 million, or a $1.8 billion across-the-board spending cut (Lopez, Minneapolis Star Tribune, 12/3).
  
  
• Missouri: Spending cuts likely will be needed soon to close a newly projected $342 million budget gap, former state Sen. Wayne Goode (D) -- Gov.-elect Jay Nixon's (D) budget adviser -- said on Tuesday, the AP/Columbia Missourian reports. According to the AP/Columbia Missourian, "The newly projected shortfall will make it more difficult for Nixon to follow through on two of his chief campaign proposals" -- restoring the 2005 Medicaid cuts and expanding college scholarships. The two proposals are projected to cost a combined $326 million (Lieb, AP/Columbia Missourian, 12/2).
  
  
• New Hampshire: Systematic change is needed to control spending as costs continue to rise, state Department of Health and Human Services Commissioner Nick Toumpas told legislative budget writers on Monday, the AP/Foster's Daily Democrat reports. Toumpas said that in the last year, there has been a 9% increase in the number of families with children receiving government-subsidized health care, as well as a 12% increase in the number of people receiving disability benefits. In addition, he said that the number of high-cost cases has increased, particularly among people with developmental disabilities (AP/Foster's Daily Democrat, 12/1).
  
  
• Utah: The current economic recession has led to an increase in Medicaid enrollment and the program is on pace to grow by nearly 20,000 beneficiaries, or by 13%, by the end of this fiscal year, the Salt Lake Tribune reports. The state Department of Health is estimating that to cover the increased enrollment, it will need $14 million in supplemental funding. According to the Tribune, without the additional funding, the agency will be forced to cut services, beneficiaries, eligibility or provider payments (Rosetta, Salt Lake Tribune, 12/4).
  
  
• Washington state: The state Health Care Authority on Friday will begin limiting enrollment in the Basic Health Plan, the state's subsidized health insurance program that currently covers 105,000 low-income residents, the AP/Seattle Post-Intelligencer reports. The cost-cutting measure will be conducted over the next seven months and it is expected to reduce enrollment by 7,700 beneficiaries. Under the plan, enrollment in the program will be limited to one new resident for every two residents who drop off the program, according to authority Director Steve Hill. The move is intended to generate savings of at least $6.7 million during the current fiscal year. The cuts are a part of the emergency spending reduction initiative recently ordered by Gov. Chris Gregoire (D). The Health Care Authority also plans to eliminate the Health Insurance Partnership, which helps small businesses in the state offer health plans to workers (AP/Seattle Post-Intelligencer, 12/3).