This Washington

Newest Revenue Forecast Out. FMAP Funding More Crucial Than Ever

By Camden Swita June 17, 2010

The new state revenue forecast is out, and it should send chills down the spines of Washington State Democrats.

The Economic and Revenue Forecast Council now projects that state revenue will be down $203 million between 2010 and 2011, meaning that the "ending fund balance" legislators left in their budget for emergencies is now down to $253 million.

The legislature will now have to wrestle with at least a $3 billion budget gap next session. But there's a more immediate problem: The ending fund balance will no longer make up for jeopardized Federal Medicare Assistance Percentage funding (FMAP), $480 million of which state Democrats counted on receiving when they wrote the state's most recent budget.

FMAP is a percent of a state’s Medicaid spending that the federal government reimburses.

Yesterday, the U.S. Senate took a test vote on an amendment that would have extended FMAP funding to the states by six months;  it failed. Senators may try again today or tomorrow, but if the FMAP amendment fails conclusively, all eyes will turn to Gov. Gregoire.

She'll be left with two choices: Call a special session of the Legislature and risk her party's success in the 2010 election or make across-the-board cuts in state services.

Viet Shelton, spokesman for Gregoire's office, said the governor is focused on working with the Washington delegation in D.C. to get the FMAP amendment passed, but said she hasn't chosen a backup plan yet.
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