Second special session might be needed, Gregoire says

OLYMPIA — Washington may need another special session of the Legislature if Congress doesn’t come through with some $480 million in higher payments for Medicaid, Gov. Chris Gregoire said today.

Concerns over the mounting federal deficit have delayed congressional approval of what Gregoire and officials of other states once considered a sure thing — a boost in the Federal Medical Assistance Percentages, or FMAP, for Medicaid costs that are shared with the states.

Washington is expecting a total of $480 million, and all but $30 million is dedicated to giving the state a General Fund ending balance that would carry over …

OLYMPIA — Washington may need another special session of the Legislature if Congress doesn’t come through with some $480 million in higher payments for Medicaid, Gov. Chris Gregoire said today.

Concerns over the mounting federal deficit have delayed congressional approval of what Gregoire and officials of other states once considered a sure thing — a boost in the Federal Medical Assistance Percentages, or FMAP, for Medicaid costs that are shared with the states.

Washington is expecting a total of $480 million, and all but $30 million is dedicated to giving the state a General Fund ending balance that would carry over into the 2011-13 biennium.

The Obama administration has called for the extra FMAP money, and both houses of Congress have approved it in some appropriation bill, but not yet in the same appropriations bill. As the days move toward the November elections, Congress may be increasingly reluctant to approve the higher Medicaid payments, which would add $23 billion to the federal deficit, Gregoire said.

“I think what the big hangup is, we’re in an election year and there’s all this talk about deficit spending, which is resonating,” she said.

Congress could attach the money to any of the remaining spending bills, or might wait until after the election to approve the money in a “lame duck” session after the elections, she said: “It will be a nail-biter, all the way.”

If the state gets a bad economic forecast next week or in September, Gregoire could call a special session to decide how to cut the budget. Because the state has accepted stimulus money, which comes with requirements to continue certain programs, only about 29 percent of the state’s general fund spending can be cut, she said. Basic education and higher education would generally be protected from the cuts; health care, social services and corrections would not.

“It depends on our forecast,” Gregoire said. “It’s a little premature right now. If we got a terrible forecast …I’d have to rethink this.”

Gregoire defended herself and fellow Democrats who control the Legislature against criticism that the state budget should not have counted on money that Congress hadn’t approved. She said it isn’t a partisan thing, because Republican governors and legislatures around the country also budgeted the money; some even allocated it to be spent for programs.

“It happened everywhere. Everybody was confident (FMAP approval) was going to happen,” she said.