As we wrote last week, Congress is expected to vote tonight on extending higher funding for state Medicaid reimbursements. This has huge implications for Pennsylvania, since the state budget passed by lawmakers in July included $850 million in funding from the federal government. Gov. Rendell has said that if he doesn't get the money, he'll be forced to layoff 20,000 state workers to deal with the shortfall.
Now, some details about what those cuts might look like are emerging. Today, Sen. Dominic Pileggi, the Republican leader of the State Senate, held a short press conference about the issue. While he sees “hope” that Congress will pass the extension, Pileggi also believes that the state must start preparing for the possibility that the money isn't coming.
“The question remains whether we should be developing a contingency plan and implementing it now or whether we should extend the time frame for doing that until we're certain what's going to happen in Washington,” said Pileggi.
Pileggi wants the state to start taking those steps if nothing happens by the middle of the week.
“I think it's reasonable, it's now Monday morning, to wait until Wednesday morning,” said Pileggi. “If the time frame gets pushed to a September time frame, then I think it's incumbent on us to implement contingency plans to prepare for the possibility that we won't receive the entire $850 million.”
That September time frame would come into play if Congress decides to wait to vote on the Medicaid extension after the August recess. And, if that happens, Pileggi wants to start implementing budget cuts.
So, where would the axe fall? Pileggi says he wants to start with the $250 million increase in the subsidy for basic education that was included in the state budget.
“I think that all of us who look at it realize that is the only line of the budget that is a large line that received a substantial increase that is purely discretionary,” said Pileggi. “Also, it is in an area that received a substantial increase in the prior year. So, school districts over a two budget cycle have seen a dramatic increase. A reduction still puts them way ahead of where they were two years ago.”
The U.S. Senate is expected to vote on the Medicaid extension tonight.