State budget burdens, cost-cutting efforts focus on health programs

Mar 14 2012

Burdened by budget deficits, states are cutting health programs to the chagrin of some. But others say the economic downturn has allowed states to take up long-term economic problems they wouldn't have addressed otherwise.

The Wall Street Journal: States Keep Axes Sharpened
States are moving to cut jobs and other spending to close budget deficits, even though their protracted fiscal crisis is easing a bit in an improving economy. … But other economists more critical of government spending say the fiscal challenges of recent years helped states by forcing them to confront long-term problems, such as rising pension and health care costs, that they had avoided for years. Some states have restructured their worker pension and health care plans to reduce projected spending (Mitchell, 3/12).

In the meantime, states are putting the new cost-saving measures into action, and much of it focuses on Medicaid costs and health care for the poor programs --

Stateline: West Virginia Tackles Retiree Health Costs 
West Virginia has become the first state to pledge tax revenue to help finance its retiree health care burden ... lawmakers approved legislation proposed by Governor Earl Ray Tomblin pledging $30 million a year in personal income tax collections to help reduce the gap between what the state promised to pay its retired employees for health care and what it set aside to meet those obligations. West Virginia's retiree health care debt, which had reached $10 billion, was one of the highest per capita burdens in the country (Fehr, 3/13).

Arizona Republic: Arizona House Democrats Unveil Own Budget
House Democrats released a 2012-13 spending plan Monday that would restore funding for health coverage for poor children and increase funding for education, aging school facilities, state parks and tourism -- programs they say would boost job creation. Their proposal is largely symbolic and has little chance of passing in the Republican-controlled Legislature (Sanchez and Pitzl, 3/12).

Modern Healthcare: Fla. Budget Bill Includes Medicaid Cuts, Usage Caps
The Florida Legislature has passed its 2012-13 budget, including deep cuts to Medicaid that will hit hospitals and long-term-care providers. The $70 billion budget is now headed to Gov. Rick Scott after passing 80-37 in the House and 32-8 in the Senate. Scott favored a more austere $66.4 billion budget, which would have taken a heavier hand with state healthcare programs. The current bill, passed late Friday, includes a Medicaid rate reduction of about 5.6 percent, which amounts to a cut of more than $303 million to hospitals (Kutscher, 3/12).

Minneapolis Star Tribune: Minneapolis Copes With A Smaller Slice Of Federal Funding
Joanne Bondy has lost most of the feeling in her feet. So every six weeks, a nurse stops by her Minneapolis home to check and treat them for infections she is at risk for developing as a 63-year-old diabetic. Other days, volunteers drive her to doctor's appointments. But the $20,000 yearly contribution from the federal government to Nokomis Healthy Seniors, the nonprofit that aids Bondy and 500 other elderly citizens, will soon expire. It's one of the small but varied ways that Washington's pullback of community development funds is playing out in Minneapolis (Rao, 3/12).

HealthyCal: Governor Proposes Cuts To Caregiver Centers
Nearly 12,000 caregivers across California will feel the effects of Gov. Jerry Brown's proposal to cut state aid to caregiver resource centers. The cuts will touch the lives of women like Audrey, 77, who has relied on the Del Mar Caregiver Resource Center in Santa Cruz for the last five years. She cares for her husband, who has multiple sclerosis and is almost 81. ... The current proposed budget calls for all state funding to be withdrawn from resource centers for a savings of $2.9 million statewide (Flores, 3/12).