New survey: State tax revenues up but so are Medicaid costs

The New York Times: Improved Tax Collections Can't Keep Pace With States' Fiscal Needs, Survey Finds
Although state tax collections are picking up after several brutal years, a new survey by the National Governors Association and the National Association of State Budget Officers found that states still expect to collect less tax revenue and spend less money in the coming fiscal year than they did before the Great Recession began. At the same time the cost of Medicaid, the biggest single portion of state spending, has been rising, driven up by higher enrollment as many people have lost their jobs and their health insurance (Cooper, 6/2).

The Wall Street Journal: States See Uptick In Revenue, Costs
Medicaid accounted for just over a fifth of states' total spending in 2010, with the program's rolls expanding, even amid efforts to contain costs—including reducing reimbursements to doctors and cutting out certain prescription drugs. That means much of states' recent revenue growth is being diverted toward the program ... Governors' proposed budgets for fiscal 2012 showed a 2.9% decline in Medicaid spending. However, state funds going to the program are predicted to increase by 18.6% while federal funds would decrease by 13.0% with the expiration of stimulus funds (Dougherty, 6/2).