NO STATE BUDGET "PLAN B" SHOULD KEEP LOCAL GOVTS ON THEIR TOES

posted by Michael Chihak

Arizona Gov. Jan Brewer and state legislative leaders are counting so much on a federal Medicaid waiver to cut nearly $542 million from next fiscal year's budget that they have no existing fallback.

That's despite some legislators' warnings that a "Plan B" needs to be discussed and worked up. Additionally, as Arizona Week journalist commentator Luige del Puerto of the Arizona Capitol Times said on last week's program, Arizona is not in an exceptional position when it comes to asking for a federal waiver. Many states are in similar straits, and if the feds grant Arizona a waiver, it sets the precedent for others, del Puerto said.

All of that means a federal waiver isn't a sure thing, and if it doesn't come through, the budget axing will have to become more of a budget slashing, running almost randomly through the state's spending plan. And it likely will occur with little time to spare, because the timing on a federal waiver decision isn't at all known.

A sure target would be the $800 million in revenue that the state collects and then passes along to municipal governments. Half of it is from the state income tax, the other half a mixture of vehicle license fees and sales tax revenue.

Municipalities are counting on that money coming through for the 2011-12 fiscal year.

If the Medicaid waiver doesn't come through, all bets are off.