This year's budget fight in Harrisburg dragged on for months with stops and starts, deals made and broken almost as quickly as they were announced. Even with billions in assistance from the federal government, agreeing to the budget was a tortuous process that frustrated Pennsylvanians across the state.
As a former Chairman of the State House Appropriations Committee, I know what it is like to negotiate our state budget. Unfortunately, fights like these may become a permanent fixture in our state capitol. Healthcare reform plans in Washington call for a substantial boost in Medicaid spending that will be shouldered by the states, whether or not the state government in Harrisburg agrees.
Both the House and Senate healthcare bills both propose expanding Medicaid programs to cover individuals up to 133 percent of the Federal Poverty Level. Since Medicaid is funded by both federal and state dollars, Pennsylvania's share would increase by $2.2 billion over ten years.
While this seems like a lot of money to have the federal government ordering the state to find, that's only the beginning. Through 2019 federal subsidies to the states will assist in covering new enrollees. Starting in 2020, however, the states will have to shoulder the full burden of the expansion. In Pennsylvania, this could cost an estimated $930 million per year.
Pennsylvania would be forced to make up this difference or risk losing all federal Medicaid matching funds. Deep cuts to critical services or huge tax increases would be the only possible solutions.
President Obama called on Congress to pass a bill that doesn't increase the federal deficit. With the projected costs of the House and Senate bills hovering around one trillion dollars, Democratic leadership is looking to states to help cover the costs.
While the President and Democratic leadership promised these bills wouldn't increase taxes on the middle class, states across the country could institute all manner of new taxes to cover the cost of this new federal mandate. The legislation could balance on paper, but at the end of the day the taxpayer would still be footing the bill.
Governor Rendell knows how hard it was to negotiate this year's budget. Unfortunately, his support for healthcare reform could make things harder on his successor. Governor Rendell recently joined other Democratic governors in a letter supporting the House and the Senate legislation without any objection to burdensome new federal mandates.
Senate Majority Leader Reid knows that increased Medicaid costs will be a burden on the states. He used his position of power to negotiate a deal to exempt his home state of Nevada from the increased Medicaid burden. Reid is running for reelection next year and knows better than to raise taxes on his constituents.
This week, I joined with my Republican colleagues in the Pennsylvania Congressional delegation on a letter to the Governor asking him to reconsider his position in light of the costs to the people of Pennsylvania. Our state is already struggling through a recession and high unemployment. Adding new mandates can only make the budget process more difficult.
Governor Rendell still has time to call on his colleagues in Washington to make the right decision. We need healthcare reform that reduces costs and expands the availability of coverage, not more taxes that drag down our economy.