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Week twenty of the first session of the 105th Legislature consisted of days 82 through 85 of this session.
Originally the Speaker scheduled adjournment “sine die” for the 90th day on June 2, but the last day this session will instead be day 86 on May 23, ending four legislative days earlier. It is estimated that early adjournment will save about $34,000 of costs.
While the regular session is concluded, we wonder if will be called back into special session yet this year. Yes, we passed a budget that is technically balanced, but based on what some believe, the revenue projections may prove overly optimistic over the next two years in light of continuing stress in the agricultural economy. The budget adopted draws down our state rainy day fund and we will start the next budget with an uncomfortably low carryover balance from the current budget, leaving almost no margin for error should state tax collections continue to fall short of projections.
Normally, the budget is based upon a 3% reserve, meaning we only authorize spending 97% of the revenues we anticipate being available. That way, if revenues fall short of predictions, there is a cushion so that we have not committed to spend more than we actually take in. As I mentioned in a previous column, the budget the Legislature presented to the governor was balanced in part by only providing for a 2.5% reserve. However, the governor vetoed $55 million of spending, which restores us back to be a more fiscally responsible 3% reserve.
Efforts to override a number of the individual spending items the governor reduced through line-item vetoes were unsuccessful. Important to know is that the line-item veto in each of these programs does not mean providers will receive across-the-board rate reductions. Among these were reductions in amounts authorized in the Department of Health and Human Services. From the $1.69 billion two-year funding for the Medicaid program, Governor Ricketts vetoed $11.8 million in each of the two fiscal years. That is about a 1.4% reduction. The Governor also vetoed $3.23 million each year, or 2.12%, from the $303.7 million the Legislature had authorized for the development disability aid program. The governor’s vetoes reduced the amount appropriated for behavior health by $1.186 million each year from the total of $146 million passed by the Legislature for the next two years, or about 1.6%. In child welfare programs, the Legislature authorized spending $333.4 million over two years. The governor vetoed $640,000 in each of the two fiscal years, or about .38%.
Much misinformation was being circulated by certain associations with lobbyists working the floor, email and social media. Following this upon our contacting the Department of Health and Human Services Director Calder Lynch, we were provided a fact sheet with details of how individuals receiving Medicaid services care will continue to do so. Please note that the Governor, and also senators make protecting ongoing services under these aid programs a priority as working on the budget. Overall, the reductions to HHS aid programs in this budget amount to little over a one percent decrease. Other agencies, such as Environmental Quality and Natural Resources among many others, saw much greater reductions in the 6-9 percent range.
Again, important to know is that the line-item veto in each of these programs does not mean providers will receive across-the-board rate reductions. Nor does it mean that critical services will be reduced. The Medicaid budget is a block appropriation based on forecasted need and the state has the responsibility to manage the program to minimize impact on access to services for Medicaid eligible individuals. Additionally, this does not impact services not covered by Medicare like long-term and nursing home care, and assisted living services. Also, none of the vetoes automatically or necessarily translate into available services falling short of needs. The Department of Health and Human Services will work with stakeholders to protect critical services within the budgeted amounts. In some cases, the budgets for these programs will benefit from an increase in the federal match rate, which will result in some increase in federal funds offsetting some of the reduction in state appropriations.
Please contact me, or our staff with questions or concerns at (402) 471-2728 or by email at firstname.lastname@example.org; or stop by Room 1022 if you are in the State Capitol. If you would like to follow the Legislature online please visit http://netnebraska.org/basic-page/television/live-demand-state-government. Live broadcasting is also available on NET2.
Division of Medicaid and Long-Term Care
The line-item veto of funding in the Medicaid aid budget will not mean providers will receive across-the-board rate reductions. The Medicaid aid budget is a block appropriation based on forecasted need and Medicaid has the responsibility to manage the program within its appropriation and minimize adverse access-to-service issues for Medicaid eligible individuals and families. For example, Medicaid has identified that Nebraska is an outlier in reimbursing certain hospital and professional services for Medicaid/Medicare dual eligible member services up to the Medicare rate. Capping payments at the Medicaid rate, as 44 states do, would achieve the general savings necessary to meet the requirements of the Governor’s veto. This does not impact services not covered by Medicare like long-term care. Medicaid will work with stakeholders to devise an appropriations reduction strategy that protects critical services like long-term care.
Division of Developmental Disabilities
The line-item veto of funding in the DD aid budget will not mean providers will receive across-the-board rate reductions. DD has the responsibility to manage the program within its appropriation and minimize adverse access-to-service issues for DD eligible individuals and families. DD will work with stakeholders to devise an appropriations reduction strategy that protects critical services.
Division of Behavioral Health
The line-item veto of funding in the Behavioral Health aid budget will not mean providers will receive across-the-board rate reductions. The amount of funding included in the line-item veto represents 1% of total contracts funds to the Behavioral Health Regions. DBH worked with the Regional Administrators to examine historical utilization and identify reductions in non-core programs like training, special projects, initiatives, and administrative costs. Historically, behavioral health providers under contract with the Regions have received a 10% increase in rates over the last four years, including a substantial increase in two services through DHHS cost model work. Those rate increases are sustained in the current budget plan and DBH will work with the Regions on the implementation plan to protect critical services.
Division of Children & Family Services
The line-item veto of funding in the CFS budget will not mean providers or contractors will receive across-the-board rate reductions. CFS has the responsibility to manage its programs within its appropriation and minimize adverse access-to-service issues for families. CFS has identified efficiencies in how it administers drug testing contracts that will garner savings in excess of the amount included in the line-item veto.