Miss. lawmakers say they’ve reached deal on state spending

Published 4:26 pm Friday, April 11, 2008

Key lawmakers say House and Senate negotiators have agreed on Mississippi’s $5 billion budget for next fiscal year.

However, the budget could have a $90 million Medicaid hole if a plan for a hospital assessment falls through.

The budget proposal still has to be approved by the full House and Senate. Most agencies would receive about the same amount of money for the coming year that they are getting now, said House Appropriations Chairman Johnny Stringer, D-Montrose.

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Lawmakers had predicted that slow revenue growth would mean few agencies would receive the additional money they requested. The budget does not include any teacher pay raises. Stringer said lawmakers would begin voting on the budget bills Monday. He also said he wished more could have been done for the state’s community colleges and universities.

“They will raise tuition. They have no choice,” Stringer said.

A few agencies will see slight increases, including the Department of Health and the Department of Human Services, Stringer said.

It was unclear Thursday whether the Mississippi Hospital Association would continue to support a plan that would assess a fee on hospitals to generate the money for Medicaid.

“Our position continues to be we think there should be a tax on tobacco and not on hospital patients,” Sam Cameron, president and CEO of the hospital association, said Thursday before the budget agreement was announced.

Senate Appropriations Chairman Alan Nunnelee, R-Tupelo, later said he drafted the budget proposal “based on the assumption we would generate $90 million from hospitals in 2009.”

Medicaid has a $100 million shortfall for the current fiscal year, which ends June 30. The health care program needed another $250 million for the fiscal year that begins July 1.

Nunnelee and Stringer said Medicaid’s deficit for the current fiscal year will be covered mostly by the general fund, which is the largest part of the budget paid by state tax dollars. The additional funding for next year was still in question.

Medicaid is paid for with federal and state dollars and serves the needy, aged, blind and disabled and low-income families with children. About one in every four Mississippians is on the program.

The proposal that had been backed by the MHA would allow hospitals to set a $155 assessment on every bed not occupied by a Medicare patient. Medicare is a federal program for people 65 and older and for the disabled.

When asked about speculation that the deal had fallen through, Stringer said it appeared the $90 million was still up in air.

“I guess if we don’t do something this session, we’ll be called back,” Stringer said, referring to a special session.

Stringer said a cigarette tax was still an option. Legislation for a cigarette tax increase to fund Medicaid died earlier in the session, but lawmakers have passed a resolution to allow the measure to be considered again before the session ends April 19.

The budget proposal also calls for lawmakers to transfer $135 million from a Katrina disaster fund to put in the state’s rainy day fund, which provides a financial cushion in tough times.

The disaster fund was created with state dollars to be used to match any federal funding received for storm recovery projects. The money wasn’t needed because the federal government didn’t require the match.