States consider how best to spend extra Medicaid funds

In light of the $26 billion aid package passed by Congress Tuesday, states are considering their next steps.  

The Boston Globe: The bill is meant to shore up jobs by providing $10 billion for teacher jobs and $16 billion in enhanced federal payments for state Medicaid programs. It means $655 million for Massachusetts. "The immediate effect on Massachusetts state jobs is not clear. Most governors, including Deval Patrick of Massachusetts, had included this funding in their initial budget proposals early this year but then removed it once Congress appeared to be leaving for its summer break without authorizing the cash. Once the Senate revived the plan last week, Patrick said he will introduce legislation to spend the money on a range of programs that were slashed in the $27.6 billion state budget for the current fiscal year, which he signed on June 30" (Viser, 8/11).

California is in line for "at least" $2.5 billion. McClatchy reports: "H.D. Palmer of California's state Finance Department said the bill will send $1.2 billion directly to the schools and another $1.3 billion that can be used to help plug the state's $19 billion budget hole. The amount is about $500 million less than [Gov.] Schwarzenegger's budget proposal assumes" (Hotakainen, 8/11).

Capitol Media Services/(Mesa, Ariz.) East Valley Tribune: The law leaves Arizona about $160 million short of what it needs to "maintain its Medicaid program as required by federal law. The bill includes only $236 million in new Medicaid dollars for the state, according to legislative budget staffers who [reviewed] it. But it will take close to $400 million just to keep the program running as it is now — and not kicking anyone off — just through June 30. … Earlier this year, trying to balance the budget, lawmakers voted to scale back eligibility, eliminating care for about 310,000 Arizonans effective at the end of December. They also voted to eliminate the Kids Care program which is designed to provide nearly free health insurance for children of parents who earn too much to qualify for Medicaid but are still considered 'working poor'" (Fischer, 8/10).

(Salem, Ore.) Statesman Journal: Oregon state officials said "the amount is not enough to cancel $577 million in across-the-board spending cuts that Gov. Ted Kulongoski ordered in May after tax collections fell short of projections. Most cuts took effect July 1, although some are phased in. … According to earlier estimates, Oregon can expect $117 million in aid to schools, and between $140 million and $160 million from Medicaid, the joint federal and state program of health insurance for low-income people. Although the amounts are earmarked, they could offer lawmakers more flexibility in dealing with other spending cuts" (Wong, 8/10).

Rapid City (S.D.) Journal: The package could bring $49 million to South Dakota. "Additional federal funds for Medicaid could free up state funds for other needs, including meeting federal disaster-assistance funding tied to extreme weather events in South Dakota, [Gov. Mike Rounds] said. 'It could help us by saving (state) general funds for the emergency match,' he said" (Woster, 8/10).

Omaha World-Herald: Nebraska should get $69 million for its Medicaid program. Sen. Ben Nelson, D-Neb., "who voted for the aid bill, said it should help states avoid passing on property tax increases but that whether to pursue the funds is a state decision. 'I recommend that they do what they think is right,' Nelson said. States can say 'no,' he said, but the money could help preserve teacher jobs and help low-income people retain health care coverage" (Hammel and Morton, 8/11).