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November | December 2014

 

 

 



States Would Feel Impact of Obama Budget

By Mary Branham, CSG Managing Editor
States could see an influx of funds for education and infrastructure in the federal  budget President Obama proposed Monday.
The president’s spending plan calls for $350 billion in short-term stimulus spending and a $475 billion highway program. That includes immediate spending of $50 billion for transportation infrastructure, $30 billion to modernize at least 35,000 schools and $30 billion to hire teachers and first-responders.
It also includes $850 million for Race to the Top, which implements systemic education reforms in five critical areas, including early learning and child care.
“The president’s budget fully funds the Race to the Top education initiative, which will continue promising reforms already underway in many states,” said David Adkins, executive director/CEO of The Council of State Governments. “This represents a positive partnership between the federal government and the states.”
But, Adkins said, the budget plan includes some issues of which states should be wary. For instance, the budget would implement payment innovations and other reforms for Medicaid, Medicare and other health programs. The Medicaid savings are estimated at $51 billion. It calls for blending the Medicaid and Children’s Health Insurance Program, known as CHIP, match rates beginning in 2017. It will basically mean a loss of matching funds for states.
“Medicaid spending is now the single largest and fastest-growing expenditure in most state budgets,” Adkins said. “Any cuts to the program at the federal level will only cause state budget gaps to grow. It is likely federal Medicaid cuts will trigger state budget reductions in discretionary areas such as higher education, which will result in higher tuition rates, actions directly at odds with the president’s budget priorities.”
Among the other impacts the budget could have on states:

 

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