This time, Congress -- with its refusal to extend aid to states for unemployment benefits and a host of other programs -- is responsible for the latest hole. A measure that would have maintained the higher levels of reimbursements for joint federal-state programs, which originated in the federal stimulus bill, failed to advance in the Senate. Democrat Ben Nelson of Nebraska joined a united Republican caucus that opposes the additional spending, and 50 states could be left $24 billion short in their reimbursements for Medicaid.
For Pennsylvania, that means $850 million less than Gov. Ed Rendell anticipated when he put his proposed budget together, money that would have been used to help pay for medical assistance for the 2.1 million residents who get it now. For next year, the state expects another 61,000 people will be eligible for the help due to the lagging economy.
Without the federal dollars, the state would have to find the money elsewhere because it cannot cut the mandated programs. Services would have to be cut across the board. That would mean expected increased funding for public schools probably won't be possible, which could impact local property tax rates. Colleges and universities would see fewer dollars, so students might see higher tuition rates. Cuts would trickle down to the state's 67 counties, which could mean reductions in police and fire protection, social service programs, child care assistance and more.
The situation in Pennsylvania will be repeated across the nation, exacerbating unemployment and triggering spending cuts by families that will hurt the economy as it struggles to recovery.
As Pennsylvania lawmakers continue laboring for a 2010-11 budget that is both frugal and fair, they need help from Congress, which must take up this funding issue again, and soon.