This Washington

Without Medicaid Money, Special Session (and More Cuts) Looking Likely

By Josh Feit July 7, 2010

As we reported last week, Gov. Chris Gregoire was in D.C. with a pack of fellow governors making the case that the feds needed to send Medicaid money to ailing states. (The money was part of the omnibus jobs bill that the GOP killed three times by refusing to vote for cloture.)
Speaking in a queue of desperate governors today, Gregoire told reporters in DC that after cutting over $4 billion from the state budget, without the FMAP money, she’d be forced to make another 7.5 percent “across-the-board” cuts, which would mean an end to hospice care for seniors, cuts to preschool, and cutting 60,000 people off low-income medical assistance.

Alternately, she said, she’d have to call a special session of the legislature to make targeted cuts.

The Washington Policy Blog—the blog for the conservative Washington Policy Center, has done some follow-up reporting, and it turns out Gregoire doesn't have the authority to make the cuts herself—making a special session more likely. (Gregoire would have the authority, if the cuts were intended to simply balance the budget, but she does not have the authority if she's aiming to leave extra money in the bank.) The WPC's Jason Mercier writes:
It turns out the Governor doesn't have the authority to use the 7.5% cut option. State law only allows her to eliminate the projected deficit, not make additional cuts to provide a budget reserve.

I confirmed this fact with the Office of Financial Management last Friday.

This means that unless we want to roll the dice that the state won't experience any more reductions in its September and November revenue forecasts, a special session is required to make spending reductions to a level necessary to leave even a minimal ending fund balance.

Mercier goes on to editorialize that the situation proves the governor should have more power:
One potential silver lining of this situation is the prospect for legislative support to enhance the Governor's budget deficit tools. To provide more flexibility the Governor could be authorized to make discretionary cuts (instead of across-the-board) to eliminate a projected deficit and leave up to a one percent reserve.

Especially with a part time Legislature, it would be prudent to provide the Governor these tools so that a special session isn't needed to deal with future deficits.

According to the National Conference of State Legislatures, Governors in at least 10 states have more flexibility to respond to a budget deficit than Gregoire.

And he ends with this ideological zinger:
For lawmakers concerned that enhanced budget deficit authority would give the Governor too much power, the solution is simple: adopt a budget that leaves an adequate reserve that can weather all but extraordinary drops in revenue and don't bet on Congress in the future for funding yet to be approved.
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