Tuesday, November 29, 2011

New Report Shows How Obamacare Damaging State Budgets

The National Governors Association released their annual fall update on the Fiscal Survey of States this morning, and the results once again demonstrate the impact of both the economic slowdown and Obamacare’s unfunded mandates.  The report illustrates how dire state budget deficits have been, and will remain over the foreseeable future.  States faced $230 billion in budget gaps between fiscal years 2009-2011, had to close an additional $95 billion in deficits this fiscal year (i.e., fiscal 2012), and 17 states have reported at least $40 billion in projected deficits for fiscal year 2013. (Many states have yet to complete official forecasts for future years, so these numbers are likely to increase.)  That’s a total of at least $365 billion in state budget deficits over a five-year period.

The NGA report notes that Medicaid enrollment has increased by 17.7 percent over the current three year period, and that Medicaid already comprises the largest portion of total state spending.  Yet Obamacare would expand Medicaid still further, to an additional 16 million (or more) Americans, while placing new unfunded mandates on states of at least $118 billion.  The NGA’s press release accompanying the report makes clear the implications of the fiscal squeeze Obamacare is exacerbating for many states:  “Spending on Medicaid is expected to consume an increasing share of state budgets and grow much more rapidly than state revenue growth, resulting in slow or no growth in education, transportation or public safety” expenditures.  It’s yet another example of the fiscal havoc Obamacare is wreaking on state and federal budgets alike.