Medicaid cuts on the way

Thursday, August 15, 2002

Nebraska Sen. Tom Baker continues to express his concern over the state's financial condition following a nearly three-week special session of the Nebraska Legislature.

The special session, called by Gov. Mike Johanns to address the state's continuing budget shortfall, was scheduled to end before noon today. The governor is expected to sign the budget reduction bills into law this afternoon.

The bill to reduce Medicaid costs, will take an estimated 16,000 to 18,000 individuals off the Medicaid roles and save the state $17 million this year and $26 million next year. During a conference call to the McCook Legislative Committee this morning, Baker defended the Legislature's decision to remove those individuals.

"We're not taking people off the low end of Medicaid. We are taking 6,000 children whose parents are making more than $47,000 annually. We're taking about 100 kids off the program whose parents are making more than $60,000 annually, and are eligible through a procedure known as stacking," Baker said.

Had the state not made the changes, Medicaid would have doubled in cost to the state over the next five years, Baker explained.

"(Nebraska) is noted as one of the easiest states in which to get welfare benefits," McCook Police Chief Ike Brown pointed out to Baker.

"We're not done with Medicaid changes," Baker told him. Duane Tappe told Baker that when his Educational Services Unit No. 15 received $18,000 in funding cuts, he realized everyone was facing cut backs and was willing to deal with it ... until he found out that Dennis Smith, President of the University of Nebraska System and his vice president had both received 4 percent salary increases totaling $18,000.

"I wasn't feeling so generous when I heard that," Tappe said.

The university received a flat 1 percent increase and will not receive an increase in budget in the 2003-04 budget year.

As for the regular session of the Nebraska Legislature in January, the senator told the group there is discussion in Lincoln of consolidating the state's regional mental health centers into one program and building on the state's new Work Ethic Camp program.

Baker explained that there are fewer than 200 people in the mental health regional center program and the cost for maintaining all the facilities is astronomical.

He also said most of the prisoners in medium security prisons are non-violent offenders. The average cost of caring for a prisoner in the Nebraska penal system is about $24,000 each year of incarceration, he said.

Raleigh Haas, Director of McCook Work Ethic Camp said the cost per offender at his facility is approximately $8,000-$10,000 for a 120-180 day stay,

Baker said he hoped the most current cuts made by the Legislature will get the state through the remainder of fiscal year 2003 which will end at of June. But, he said, the drought is an unknown factor in determining state tax receipts.

"This drought is no longer a Southwest Nebraska problem. It's a statewide problem. If it gets bad in the ag sector there exists a potential of coming back in November and December to address a cash flow problem," Baker said.

Baker said the first 10 days tax receipts in August are way down. "I don't have a good feeling about it," Baker said.

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