The National Governors Association is calling for Senate leaders to extend the Medicaid funding boost states were given under the American Recovery and Reinvestment Act.
In a Tuesday letter to key Senate lawmakers, the governors said a six-month extension of the enhanced FMAP funding would be the most efficient way to help states avoid further layoffs and service cuts that could otherwise slow recovery.
This request follows a similar request by the NGA last February.
"To address revenue shortfalls and meet balanced budget requirements, states have dramatically reduced spending nearly 11 percent in two years from $646 billion in 2008 to $579 billion in 2010," the governors said in their Tuesday letter. "More remains to be done. Our best estimate of the remaining state shortfalls for 2010-2012 is $127 billion. Fiscal year 2011, which begins on July 1, 2010, will be the worst for states before modest revenue growth begins in 2012."
While the current FMAP does not expire until December 31, 2010, the value of such an extension is maximized the sooner the extension is enacted, they said. Delaying action until the end of the calendar year will force states to act now to reduce pending budget gaps by enacting further cuts in their workforce and core services, both of which will serve as a drag on the economic recovery.
"Governors are very sensitive to problems created by federal deficits and the national debt," they told the Senators. "They are also aware of the role states play in either speeding recovery or prolonging the effects of a recession. Passing a two-quarter extension of FMAP as soon as possible is the best way to help states bridge the gap between their worst fiscal year and the beginning of recovery," the governors said.