What if state doesn't get $480M it has budgeted?

This editorial appears in the June 8, 2010, Yakima Herald-Republic.

It may not be time to push the panic button. But it's certainly time to worry about what happens next if the state doesn't receive a federal Medicaid match worth $480 million.

When state lawmakers hammered out a supplemental budget earlier this year, they were confident Congress would approve money to increase the Federal Medical Assistance Percentages, or FMAP, for Medicaid costs that are shared with the states. The anticipated $480 million amounts to 17 percent of the $2.8 billion shortfall lawmakers were trying to fill.

Washington was not alone when it came to plugging in FMAP money into its general fund budget. Twenty-nine other states also used the expected money to balance their budgets, amounting to a total of $25 billion.

The hoped-for FMAP funds range from $33.7 million in New Hampshire to $1.5 billion in California. Neighboring lawmakers in Oregon decided against including any FMAP money into their budget and, if the Medicaid funds do come through, have chosen to use the funds to reduce the state's deficit.

Sen. Patty Murray, D-Wash., certainly seemed confident about the FMAP money when we talked with her during an editorial board meeting in early April. She told us passage by Congress was a certainty and would happen in a few weeks.

That optimism, though, seems to have faded in light of a growing public clamor over the ballooning federal deficit.

"Sixty votes in the Senate is never easy," Murray told The Seattle Times late last week. Nonetheless, since so many states urgently need the money, that sense of fiscal urgency "will help us get to the votes we need."

Gov. Chris Gregoire raised the possibility of convening another special session later this summer if the anticipated FMAP appropriation is not approved.

We hope that's not the case. According to the governor's budget director, if tax collections remain steady, the state should be able to meet its spending demands by the time the Legislature convenes in January.

However, there's not much room for maneuvering. Loss of the FMAP money would essentially wipe out the state's reserves.

The Great Recession has forced lawmakers to make tough decisions. More could be on the way. If cutbacks have to be considered to the tune of $480 million, they will have to come out of a limited pool of dedicated funds -- for health care, social services and corrections. That's because the state accepted federal stimulus money in order to balance its current budget and that carried restrictions -- namely protecting basic education and higher education from any further cuts.

Asking lawmakers to consider such painful decisions during a special session is not the best way to conduct business. We saw that during the special session a few months ago when Democrats hid behind closed doors and cobbled together a laundry list of tax increases.

It may turn out, though, that circumstances will force lawmakers into another emergency.

One day it would be nice to finally see the state spend money it actually has in hand. Sadly, that day seems far, far away.

* Members of the Yakima Herald-Republic editorial board are Michael Shepard, Bob Crider, Spencer Hatton and Karen Troianello.