NASBO says state budgets still struggling
The National Association of State Budget Officers (NASBO) in Washington, DC, says in its latest Fiscal Survey of States that recent economic data suggest the economy is recovering, but states still are experiencing "dismal budget situations. Revenue growth is anemic, spending pressures continue to rise, and states are facing massive budget shortfalls."
NASBO says that an examination of state budget shortfalls and total state revenues during the recession in the early 1990s suggests there will be a lag of 12 to 18 months between national economic recovery and the time when growth is strong enough to be reflected in healthier state budgets.
Looking specifically at Medicaid, NASBO says that expenditure growth continues to exceed budgeted amounts. Medicaid expenditures in FY 2002 are increasing 13.4% over the fiscal 2001 level, the report says. And that follows an increase of about 11% in 2001. The 25% growth rate over two years compares with about 5% revenue growth over the FY 2000 to FY 2002 period.
NASBO says that Medicaid is second only to elementary and secondary education as a percentage of state expenditures, and notes that the Centers for Medicare and Medicaid Services says that Medicaid growth will remain strong through 2011, outpacing growth in total national health expenditures. n
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