With Gov. Mike Parson promising state employees a pay rise by Feb. 1 and the state’s Medicaid program likely to run out of money next month, one of the first items on the agenda of Parliament Day this year is an additional spending bill of $ 5.3 billion.
The House budget committee will meet at 11 a.m. on Monday for its first review of the bill, which includes $ 1.9 billion in federal coronavirus relief funds for public schools and $ 1.6 billion for Medicaid.
The only safe deadline for the bill to pass is March 24, when federal law requires the state to appropriate at least 75% of school funding. But the Medicaid program, which was extended last year to cover working-age adults, will likely need the money sooner.
“So initially we thought it was February 1 and it has since been relaxed a bit due to the uptake rate of the expansion of Medicaid,” said the chairman of the House budget committee, Cody Smith, in an interview. âSo there were fewer people on the reels early in the early stages of Medicaid’s expansion than they anticipated. “
Exactly when the bill is due to pass is uncertain, but the sooner the better, said Senate Appropriations Committee Chairman Dan Hegeman.
âWe just have to do it,â Hegeman said.
But with the Republican Senate majority fractured and Tory caucus members promising amendments that would ban the use of the money to pay for Medicaid extension coverage, Hegeman was quick to add that he was not trying. not to pass the bill.
âWe have to go through the process and have the discussion,â he said. “I mean, I don’t want to, you know, bypass the proper debate and considerations.”
When voters approved the extension of Medicaid in 2020, supporters estimated that up to 250,000 people would benefit from coverage. While Parson’s budget for the current year funded the coverage, the Republican majorities in the legislature cut the money.
This sparked a lawsuit and a Missouri Supreme Court ruling that the initiative set eligibility standards for Medicaid and the state had no choice but to use the funds already earmarked to provide care. .
Anyone between the ages of 18 and 65 who has an income below 138% of the Federal Poverty Guideline is eligible for coverage.
The Parson administration began accepting applications on October 1 and only 51,513 people registered.
Any attempt to stop paying for the expansion group is doomed to failure, Senate Minority Leader John Rizzo told a press conference on Thursday.
âI think at this point the courts have talked and talked and talked again,â Rizzo said. âIf they choose to go down this route again and bang their heads against a wall, the problem will be resolved again in court. It’s just a matter of how far they want to go and keep going and embarrass themselves. “
The additional Medicaid spending does not hit the state’s huge general revenue surplus, well in excess of $ 2 billion and growing. Instead, it pays the state’s share from a fund set up to hold money the federal government sent to Missouri due to the COVID-19 pandemic.
Not all of the $ 1.6 billion allocated to Medicaid are intended to cover the expansion group. Each year, Medicaid needs additional funds due to the uncertainty of estimating the care it will need to provide.
The way the bill is structured, the state is essentially using the money it has saved due to the federal COVID policy to match the federal money that will pay the bulk of Medicaid spending for the traditional program and for the expansion group.
The bill uses $ 429.8 million from the “Medicaid Stabilization Fund,” leaving $ 209 million in the fund. In his budget request last year, Parson estimated the general revenue cost of expanding Medicaid at $ 120 million.
Breakdown of funding
The main elements of the bill, in addition to Medicaid, are:
â¢ $ 72 million, including $ 41 million in general revenue, to fund a 5.5 percent wage hike for all government employees and raise the minimum wage for government employees to $ 15. ‘time.
â¢ $ 3.1 billion, including the $ 1.9 billion that must be allocated by March 24, to the Ministry of Elementary and Secondary Education. Much of the money, including 90 percent of funds under the deadline, will go directly to local school districts.
â¢ $ 370 million more from federal coronavirus funds for various programs, including $ 100 million for the State Emergency Management Agency and $ 12 million to supplement Victims Act funds of crimes distributed to domestic violence shelters, child advocates and other victim services.
The money spent by the bill is to cover anticipated state costs until June 30, the last day of the fiscal year. Parson’s annual budget message will be delivered on January 19 when he delivers the State of State Address.
State salary increase
There is broad support for the wage hike and its continuation over the next fiscal year will cost the state $ 218 million, including $ 123 million in general revenue.
The job market is very competitive right now, Hegeman said.
“It’s really fair to make us competitive with the market so that we can retain employees to care for veterans in nursing homes and care for our developmentally disabled population, and full staff in correctional facilities. and others, “he said.
Parson has unprecedented amounts of money to use, should he choose to do so. The budget will include its proposals to use all or part of the $ 2.8 billion the state will receive from the American Rescue Plan Act, signed by President Joe Biden in March.
It is not just federal funds that are available in amounts previously unimaginable. The overall consensus revenue estimate for the fiscal year starting July 1 is $ 11.4 billion in tax revenue, the highest of any year.
The general revenue fund surplus is expected to exceed $ 2 billion at the start of the new fiscal year. The fiscal year 2021 surplus was just over $ 1 billion, and the current year budget is based on revenue estimates that are $ 1.3 billion lower than current expectations.
And other funds, totaling over $ 500 million, are available and can be spent as if they were general revenue.
This amount of money is a magnet, Hegeman said.
âThere’s just a lot of work because it’s a pretty big budget this year,â he said. âI think there’s just a lot of demand and a lot of interest in different ideas and programs, so all the different ideas that are going to emerge this year.â
In the House, State Representative Doug Richey, R-Excelsior Springs, chairs the subcommittee on federal stimulus spending.
In hearings before his committee, colleges and universities in November asked for $ 435 million for labs, classrooms and sports facilities. In April, the panel heard requests from local governments and other agencies that included $ 88 million for a new training academy for the Missouri State Highway Patrol.
Parson proposed in August to use $ 400 million for a massive broadband initiative.
âI think we’re looking at all of these things,â Hegeman said.
To get some of the federal funds, Richey said in an interview last week, projects will need to show long-term benefit either as infrastructure or by supporting state goals without creating a significant ongoing cost. The money comes from spending on the federal deficit, he noted.
“So for us, at least for me, I’ll speak just for myself in that capacity, as long as I have the ability to put fingerprints on the lever, I think it’s important to say that we’ll spend whatever is necessary that can be defended as worth that debt, “Richey said.” And if it’s not, we could end up saying no to some really good projects. “
The state has until December 31, 2024 to appropriate the money and until the end of 2026 to actually spend it.
âI don’t think we need to run around to spend every penny we can because these are taxes that haven’t been collected yet,â Richey said. “It’s a line of credit the federal government has given us, isn’t it?”
Democrats will support a well-crafted plan to use federal funds and state surpluses to meet education, infrastructure and other needs, Rizzo said.
“We have the funds to breach by being last in a lot of things and I hope the Republican majority uses that to our advantage,” he said.
But work on the budget for the coming year will wait while the additional bill is on hold. The House schedules Friday floor sittings, if necessary, to expedite the proceedings.
The Conservative caucus is hoping to reverse the Medicaid expansion may depend on sending a constitutional amendment to the ballot, Smith said. Any decision to cut funds to those already registered would lead to another legal battle, he admitted.
But if the Conservative Senate caucus is to come up with a plan, he said, it would have to wait until the next fiscal year. Time is precious to get the additional bill through, he said.
In the current year it’s âmore about paying our bills now that we are expanding,â Smith said. âAnd then you have (exercise 2023), which is the start from one exercise to another. I think it’s a different calculation.
A big fight that delays the bill would hurt everyone on Medicaid, Smith said.
âIf we run out of Medicaid money,â he said, âobviously we risk not paying Medicaid providers and bad things happen.â
This was first published by The Missouri Independent, a non-partisan, nonprofit news organization covering state government, politics, and politics, and is reprinted with permission.