Washington state's budget, patched together by the Legislature with bubble gum and bailing wire only a few months ago, could unravel if Congress doesn't approve additional funding for Medicaid.
One of the pieces of Bazooka used to plug holes in the budget was $480 million lawmakers expected Congress would approve as part of a $23 billion nationwide Medicaid extension. The money is to be used to keep pace with growing Medicaid costs, which are fueled in part by more out-of-work or struggling people needing government assistance to pay for medical care. In addition, the cost of health care is soaring.
The influx of Medicaid costs has been a significant factor in Washington's budget troubles.
Yes, the Great Recession has caused sales tax and other revenue to come in lower than projections, but that's only a piece of the overall problem. Sales tax collections have remained relatively flat over last year's collections. If Medicaid costs would have also remained flat then the state could have avoided many of the cuts.
But that didn't happen as the Medicaid caseload expanded, forcing lawmakers to cut other areas of the general fund budget such as education -- from elementary school through college.
It's an unfortunate but unavoidable situation. The state's day-to-day expenses are all lumped together in one huge pool of money.
The situation becomes even more complex with programs such as Medicaid. These programs are administered by the state but funded by the federal government. The amount of money allocated by the federal government is based on projections that can -- as is the case now -- fall short of what is actually needed. This leaves the state on the hook for the costs.
The state has little choice but to pick up the tab as it would be wrong to deny people medical coverage they have been promised. This is simply the cost of government, albeit an expensive one.
We've not been particularly impressed with the way lawmakers built the budget on hope (for a fast economic recovery) and assumptions (the federal government will keep sending cash). We would have provided some deeper cuts that would have allowed the budget to hold up if economic recovery is slower than expected.
All this puts Washington state in the hot seat if Congress doesn't come through with the $480 million lawmakers have already put in the budget. The loss of the cash could mean layoffs as well as another special session of the Legislature to deal with a new budget crisis.