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When the General Assembly began the 2011 Regular Session in January, there was only one thing that had to be done: Plug a sizeable deficit in Medicaid.
Work on doing that started back in November, when Governor Beshear offered a plan that would keep the solution within that healthcare program. In essence, it calls for using money set aside for next year to cover the short-term problem and then implementing a wide array of cost-saving managed care programs across the state that are similar to those that have long been used for Medicaid recipients here in the Louisville area. That would give us enough time to smooth out the deficit, and do it without cutting any program or raising taxes.
About a month ago, the House overwhelmingly voted to take this approach. The state Senate, however, chose a different tactic when it unveiled its plans just four days before the legislative session was scheduled to end for the veto recess. Their plan called for across-the-board cuts, including more than $30 million to be taken directly out of the classroom. Universities would have lost $22 million more.
A letter from Kentucky Chief Justice John Minton said this cut, when added to eight others made over the last several years, “would mean a staggering 28.5 percent reduction of the Judicial Branch budget since Fiscal Year 2009.”
Public defenders and prosecutors alike would have been hit hard as well. The first group would have seen a loss of more than 40 people, putting caseloads at approximately 500 per attorney. The second group, meanwhile, would either have had to resort to layoffs or rely on furloughs even more.
The issue arose late last year, when Congress did not appropriate as much stimulus money for the healthcare program as Kentucky – and more than two dozen other states – expected.
Medicaid is a unique state and federal partnership, where the state provides about 25 cents of every dollar spent. But to get that federal match, we must put our portion up first. The reduction in stimulus money, then, is dramatically magnified when you factor in the reduced federal match. The deficit is more than a half-billion dollars.
Because Kentucky must balance its budget each year, unlike the federal government, we have to close that hole before June 30th. Governor Beshear says healthcare providers will see their payments reduced by 30 percent over the next three months if this issue is not resolved. That would undoubtedly close many of these companies’ doors and potentially disrupt the system for years. We will also forfeit $12 million dollars from the federal government because of a higher match rate that will move back to traditional levels this summer. Unfortunately we will probably see some hospitals close if we do not correct the Medicaid problem soon.
With that in mind, Governor Beshear called for a special session to begin on Monday. The House would have preferred using the one legislative session day we had reserved on March 21st for vetoes, but the Senate killed that possibility when it met this past Wednesday (without the House) and used the reserve day. Since the Senate did not reserve the one day, we have no opportunity to meet and re-consider any of the bills that were sent to the governor over the last month or review any he might veto.
For now, the House and those in the state Senate who supported the governor’s approach will see if we can work out a compromise in as short a time as possible. His goal, like mine, is to avoid any cuts, especially to education. 114 of 138 legislators said “no cuts to education.”
Although this issue will understandably dominate our time, Governor Beshear did add another issue to consider during the special session: Raising the high school dropout age from 16 to 18. The House has supported this several times in the past, including the just-concluded legislative session. We did that because about 6,000 students drop out across the state each and every year, and we need to do all we can to keep these children on track to get a diploma. Dropping out severely limits their ability to find a good-paying job. It’s time to change a rule that was put in place nearly a century ago.
I will keep you updated, of course, on the progress of our work in the days ahead, and want to thank all of you for calls and letters this past legislative session. We all want to save money at the state level but making cuts that will hurt people when it is not necessary is not something I want to do. I would prefer to give the governor a chance to continue to manage the budget as he has been doing, since we are beginning to see an increase in revenues.
If you would like to reach me now or anytime this year, you can always write to me at Room 351B, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601.
You can also leave a message for me or for any legislator at 800-372-7181. For the deaf or hard of hearing, the number is 800-896-0305.
I hope to hear from you soon.