Caseload forecast gives state budget rare break

OLYMPIA: Federal health reform saves $287 million

March 12, 2011 

Capitol & Insurance Building

Capitol & Insurance Building. (Steve Bloom/The Olympian)

BY STEVE BLOOM — The Olympian

State lawmakers got rare good budget news Friday as a new caseload forecast shaved $287 million off the expected cost of government through June 2013.

The big and unlikely savior: federal health reform.

The Caseload Forecast Council released its draft report, but too few lawmakers serving on the council were present to form a quorum to adopt the forecast.

Marty Brown, the budget director for Gov. Chris Gregoire, said the forecast in effect cuts $78 million from costs for public schools, Medicaid, prisons and other programs through June and an additional $207 million for the next two-year budget cycle.

Reduced use of state-paid medical services by those on the case rolls is driving down the costs, accounting for $70 million of the avoided costs in the short term and about $117 million in the next cycle, he said after the report from council staff members.

“That’s mostly health care reform,” Brown said. “A lot of it is drug rebates and a reduction in premiums we have to contribute to” for Medicare recipients eligible for the shared state and federal Medicaid assistance.

Republican Rep. Gary Alexander of Thurston County serves on the council and said the lower costs “are going to be helpful in addressing our budget. We were very concerned it would go in the opposite direction. Unfortunately, we will see a revenue forecast that will go in the opposite direction.”

In other news, the Economic and Revenue Forecast Council released its monthly tax collections report Friday, saying they are down by a cumulative $85 million through early March, compared with the November forecast.

The collections for the state general fund fell $39.9 million below the previous forecast over the past month alone. But the state’s economy is growing, and tax collections overall still are higher than in the previous year.

The revenue council makes its next quarterly report Thursday, and lawmakers are all over the map in their expectations. Some fear revenue could fall as much as $2 billion from November’s predictions.

State revenue is tied in a major way to sales and business activity, and sales are linked to consumers’ sense of job security or job prospects. But the quarterly economic forecast issued a week ago said the state still is 180,000 jobs below the pre-recession peak, and full job recovery won’t occur until after the next biennium ends June 30, 2013.

About all that legislative leaders have agreed on at this point is to first try writing a budget without tax increases.

Brad Shannon: 360-753-1688

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