Politics & Government

Aid case increase adds to budget shortfall

More Washington residents will receive Medicaid and children’s health assistance in the next two years than earlier forecast, creating a $250 million shortfall in the state’s already-strained budget.

The new forecast was released Wednesday by the Caseload Forecast Council, and Gov. Chris Gregoire’s budget office released an analysis showing that $113.4 million of the expected increase is in aid to needy families that qualify for Medicaid.

An additional $69.6 million is for children’s health care, including some children whose families qualify for Medicaid and others whose citizenship has not been verified. General Assistance Unemployed costs also are up $12 million, and nursing-home costs are up by $6 million.

“The governor’s budget office was not surprised that more families are needing help during these difficult economic times,” Office of Financial Management spokesman Glenn Kuper said.

The increase adds to budget woes as the state strains to balance its books after the weak June revenue forecast erased some of its financial reserves.

“It’s something that we will be considering as we begin constructing a supplemental budget. We are sending a letter to agencies today that clarifies the direction the governor gave after the revenue forecast, asking them to take reductions to account for the revenue loss,” Kuper said.

“In that letter, (Gregoire) also indicates that with the expected increase in cost to cover caseloads, agencies should begin planning for additional reduction plans that would be implemented with a supplemental budget” in January, he added.

Officials in the governor’s budget office still intend for agencies to cover lost revenue by cutting the equivalent of 2 percent of payroll costs above what the agencies must cut for the new budget that took effect Wednesday.

“Caseloads are going up. This is just the beginning,” said Jim Stevenson, a spokesman for the Health and Recovery Services arm of the Department of Social and Health Services.

The caseloads for the “categorically needy families” section are expected to go up 41,491 over March forecasts, and the caseloads for several children’s health programs will increase by 33,801, according to OFM’s analysis of the caseload report.

Stevenson said the “categorically needy families” aid is for families that qualify for the Medicaid services paid by the state and federal government; similar help is available for children. One category of children’s health assistance is for immigrant children and some who might be citizens but whose citizenship has not been verified.

Brad Shannon: 360-753-1688