Medicaid spending big part of budget woes

Published 12:00 am Wednesday, February 20, 2008

It is clear that Ohio, like many other states, is facing uncertain economic times.

Citing this period of flux in our economy as the cause of a projected decline in state revenues over the coming year, earlier this month, Gov. Strickland laid-out a plan to absorb what his administration predicts will be a $733 million shortfall in the current biennial state budget cycle. The proposal includes cuts in spending for many state agencies, thousands of state government job reductions through early retirement, attrition and layoffs and the introduction of Keno to Ohio’s lottery system to help bring in more revenue.

While I don’t agree with every decision, I commend the governor for being proactive to ensure that we keep Ohio’s budget balanced.

Email newsletter signup

Since the announcement, the governor has received criticism from some Ohioans about what his administration plans to cut and why, while others question whether the move is even necessary. To the casual observer, this numbers game may seem complex, but it is important to understand where we stand.

More than seven months into the two-year budget cycle, revenues are coming in almost completely on target with less than a 1 percent deficit. In fact, January revenues came in slightly above state estimates. So, in the short term, the state appears to be in good shape. However, the governor was given information that projects a decline in revenues over the next few months that will create a significant hole in the state’s coffers. Therefore, he has called for budget cuts and a budget reprioritization in anticipation of this shortfall. While it is a different strategy and one that has definitely created some backlash, it has to be appreciated to a certain extent.

Certainly, Ohio’s economy is going through an uncertain period right now, and I respect the governor’s willingness to make tough decisions so the state’s budget remains stable.

However, there are other sources that are contributing to Ohio’s budget woes that we must not overlook. Medicaid — a state-federal entitlement program designed to provide health care for low-income and medically vulnerable individuals — has been growing at an alarming rate. In fact, between 2006 and 2007, almost 38 percent of Ohio’s two-year budget was dedicated to the program. While it is hard to deny the important role Medicaid plays in caring for Ohioans in need, we must work to rein in costs or be forced to reduce or cut other needed services. Unfortunately, the cost of the program is already having an impact on other areas of the budget.

Right now, Medicaid loads are higher than anticipated, contributing to Ohio’s tight fiscal situation. As a result, the governor has proposed cuts to other programs, such as PASSPORT and state parks, to help cover these unexpected Medicaid costs. The governor has also had to halt proposed expansions to some areas of Medicaid to keep the problem from worsening.

I would also like to add that I am not in favor of the governor’s plan to bring Keno to Ohio. Over the years, I have consistently sided with Ohio voters in rejecting the expansion of gambling in the state.

Gambling is not a good public policy strategy for sustainable revenue because it has to keep growing in order to raise money. I know Ohioans go to other states to gamble, but I do not support the idea of Ohio endorsing it.

The state faces many tough economic decisions ahead. While I don’t support the Governor’s proposal entirely, I applaud his efforts to keep Ohio’s budget balanced.

John A. Carey is a member of the Ohio Senate and represents the 17th District.