Thursday, April 24, 2008


Good News for Ohio!

Good news for Ohio! For months advocates and policymakers have called foul on a directive released last year by the Centers for Medicare and Medicaid Services (CMS). The directive limited the ability of states to expand their SCHIP programs to children in families above 250% of poverty. With Ohio looking to expand its SCHIP program to 300% of poverty, the directive took the wind out of the sails of the bipartisan effort to provide health care to more of Ohio’s children.

Last week the General Accountabiity Office and the Congressional Research Service released opinions stating that, under the Congressional Review Act, the August 17th directive should have been sent to Congress for review before being implemented.

The new legal opinions help to validate the perspective that the directive has illegally, abruptly and unilaterally changed longstanding SCHIP rules through a “backdoor” mechanism. By making these far-reaching and harmful changes through a mere letter to state officials, Governors, families, and others were left with no opportunity to comment on how they might damage children’s coverage.

In Ohio, the directive already has meant that 35,000 children will not be able to take advantage of the SCHIP expansion.

In light of the growing evidence of the illegality of the August 17th directive and its ongoing harm to Ohio, and other states, efforts to cover more uninsured children, we need to continue the effort to see that the directive is suspended until SCHIP reauthorization can be completed. It is only fair to the nation’s children that far-reaching decisions about which of them can be covered through SCHIP are addressed in a public, open debate, rather than through a backdoor process that illegally circumvented even the chance for Congress to provide input.

Wednesday, April 16, 2008


Revenues Starting To Show Economic Slowdown

The April LSC and OBM budget reports are out. The past few budget reports have warned that the weakened economy would start to show itself through lagging tax revenues, and the April reports seem to bare this out. However, expenditures remain below estimate so far this year, and LSC expects them to stay below estimate as the executive branch implements its budget reduction plan to reduce general revenue fund (GRF) FY2008 spending by about $202M. We saw large inflation in March according to the U.S. Labor Department. Although, LSC reports that if there is a national recession, analysts expect it to be shallow with a quick recovery.

Revenues - Tax revenue is up a meager .4% year-to-date compared to this time last year. All GRF sources are $517M (2.7%) below estimate year-to-date and $371M (18.4%) for the month of March. Every major tax source came in below estimate in March, and LSC reports they will probably remain below estimate for the rest of this fiscal year. GRF tax receipts are down $262.4M (1.9%) so far this year and down $110.7 million (7.3%) in March, mostly because of the personal income tax, which is most affected by economic conditions. The March sales and use tax, which also reflects the strength of the economy, also lowered, at 10.4% below estimate. The commercial activity tax came in 13.2% below estimate in March, and LSC predicts it will finish the year below estimate. Other tax revenue streams that are below estimate year-to-date include the corporate franchise tax, auto sales tax, public utility tax, earnings on investment, and the cigarette tax.

Expenditures – Most categories remain below estimate except for Medicaid, which is $18.8M (.3%) above estimate year-to-date. Medicaid caseloads have exceeded estimates for 8 consecutive months, and expenditures would be higher if it weren’t for delays in program expansions and provider rate increases. JFS will receive $8.9M for Medicaid due to a settlement with Merck & Co., Inc. - every bit helps. Additionally, spending in three higher education grant programs has been delayed next fiscal year.

FY 2008-09 Budget Corrections – we’re still waiting for the legislature to weigh in on most of the Governor’s proposed budget fixes, which require legislative action. Executive budget cuts are already being implemented. He has not yet proposed use of the rainy day fund or touching any tax reforms from the past few years.

FY 2010-11 Budget – OBM expects state revenue growth to remain flat in 2010-11 and acknowledged that this is because of the tax reforms of HB 66 and the weakened economy. OBM’s Operating Budget Guidance limits department requests to 90 and 95% of adjusted 2009 appropriations, even for GRF funds used for state match of federal funds. This limit is by fund, not by appropriation line item, which means that departments have to prioritize funding across all programs. Therefore, advocacy for the next budget should begin now at the state agency level as departments are preparing their budget requests for submission by September 15.

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