Kansas Health Institute | Information For Policy Makers. Health for Kansans.

TOPEKA — Kansas Gov. Mark Parkinson said today that federal legislation on its way to President Obama for signature will prevent a new round of state budget cuts and the laying off of thousands of teachers.

The U.S. House of Representatives on Tuesday approved $26 billion in aid to the states that is expected to provide Kansas with up to $87.1 million in additional Medicaid funding and $92 million for teacher salaries.

The vote was 247-161. All but two Republicans in the House, including the three GOP members from Kansas – Jerry Moran, Todd Tiahrt and Lynn Jenkins – voted against the measure, citing concerns about government spending. Kansas Democrat Dennis Moore voted for it.

Parkinson, in a statement released shortly after the vote, said the additional federal funds would be sufficient to “keep our state budget in balance” primarily by filling a potential gap in Medicaid funding.

Parkinson is a Democrat. He and several other governors, Republican and Democrat, have for months urged Congress to act on the extended federal aid to states. Kansas was among 30 states that built budgets assuming the money would come.

The budget crafted by the 2010 Legislature and signed by Parkinson last spring anticipated approximately $131 million in additional Medicaid funding; about $44 million more than what is now anticipated.

That makes the rules governing how the state can spend the $92 million in education aid important.

State officials are hoping they will be permitted to spend it in ways that free up other funds to make up the difference between what was anticipated for Medicaid and what was approved.

“I know that’s going to be investigated thoroughly,” said Dale Dennis, deputy education commissioner.

A complicating factor, Dennis said, could be a drop in property values in key areas of the state that could significantly diminish the amount of money generated by a statewide mill levy for schools.

Filling that gap from decreased property tax revenue, Dennis said, could “take a chunk” of the $92 million in federal dollars earmarked for education.

Another variable also could reduce the anticipated Medicaid assistance.

The $87.1 million that Kansas now expects to receive is tied to the state’s unemployment rate. If the jobless rate goes down, so will the Medicaid assistance.

Despite those potential variables, officials at the Kansas Health Policy Authority joined the governor in welcoming the passage of the federal aid bill.

“We won’t be faced with severe cutbacks in the Medicaid program, at least immediately, assuming state revenues come in as anticipated,” said Peter Hancock, an agency spokesman.

More than 300,000 low-income, elderly or disabled Kansans benefit from the $2.5 billion Medicaid program.

Normally, the federal government pays 60 percent of the Kansas Medicaid program’s costs and the state covers the remaining 40 percent. But to help the state maintain services during the recession, the federal government began covering almost 70 percent of the costs. That increased federal co-payment was scheduled to lapse Dec. 31. The bill approved by the U.S. House on Tuesday extends a lower rate of additional federal assistance through June of 2011.