Wednesday, December 06, 2000

Cuts aim to pay Medicaid shortfall

Ohio House move now goes to Senate

By Debra Jasper
Enquirer Columbus Bureau

        COLUMBUS — The Ohio House on Tuesday overwhelmingly agreed to make budget cuts and use general fund money to pay the state's share of a $648 million Medicaid shortfall — a move some lawmakers say will mean less money for education.

        “I think this is the first we're seeing of a trend where human services, especially taking care of the elderly, is going to be more expensive,” said Larry Householder, R-Glenford, who will take over as speaker of the house in January.

        Lawmakers say the state faces a budget crunch this fiscal year that will force them to make tough choices. Although cuts in education are off the table, they said, the state won't be able to spend as much as some education officials say is needed to overhaul the public school system.

        “There's only so much money,” Mr. Householder said. “You've got services such as Medicaid where costs have risen to the point it's digging deeper into the pocketbooks of Ohioans.”

        The state Medicaid program has been plagued this year by increased caseloads, higher prescription drug costs and other skyrocketing medical expenses.

        Between fiscal years 1994 and 1999, Medicaid grew at an average rate of just 3 percent each year. But that rate increased to 6 percent in fiscal year 2000, and costs are expected to reach $6.5 billion in the current 2001 fiscal year — an 18.1 percent increase over fiscal year 2000.

        With costs far outpacing predictions, the state needed $249 million to cover its share of the Medicaid shortfall. Ohio pays for about 42 percent of Medicaid costs and the federal government funds the rest.

        To come up with that money, lawmakers Tuesday passed a bill directing the Office of Budget and Management to limit spending and make $125 million in budget cuts this fiscal year, which began in July.

        Kevin Kellems, a spokesman for Gov. Bob Taft's office, said the governor has asked every department except education to cut back spending.

        The bill, expected to be passed out of a Senate conference committee today and sent to the governor, allows the other half of the money needed to cover the shortfall to come from the general fund.

        Some lawmakers and budget officials point to flat sales tax revenue for the first part of this fiscal year as one sign Ohio's economy is slowing.

        In light of such indicators, Mr. Householder and others say now is the time to proceed cautiously. “We don't know what the future holds.”


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