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

TOPEKA — State officials are looking for ways to avoid having to cut an additional $41 million from the state’s social services budget.

“We’re aware of the situation,” said Steve Mock, a spokesman for the Kansas Department of Social and Rehabilitation Services. “We’re working with the Division of Budget to see how this might or might not change our budget picture. Right now, we don’t know.

“But this will or could affect all agencies that draw down Medicaid, not just SRS,” Mock said.

The potential for another round of spending cuts stems from legislators assembling and Gov. Mark Parkinson approving a budget that anticipated receiving approximately $131 million in additional federal Medicaid funding.

Earlier this month, Congress agreed to put up an additional $87 million or $44 million less than Kansas lawmakers expected.

At the same time, officials learned the state would be getting an additional $92 million in federal aid for teacher salaries.

Now, budget officials and trying to find out whether federal regulations will let the state use some of the education money in place of the anticipated Medicaid funding.

Parkinson is expected to issue a statement on the matter Thursday or Friday.

“Obviously, this is a concern,” said Senate Ways and Means Committee Chairman Jay Emler, R-Lindsborg. “But at this point, what we don’t know enough about is what strings are attached to the education money and if there is a way some of that money can be put in the State General Fund and let us then pull SGF out and put it into Medicaid.”

Emler said he plans discussions about the funding picture during the Aug. 26 meeting of the interim Legislative Budget Committee.

“This is not good news,” Rep. Bill Feuerborn, D-Garnett, ranking minority member on the House Appropriations Committee said of the Medicaid assistance. “We were hoping for more and we got less.”

Feuerborn said he doubted the education money could be spent on Medicaid programs.

“I’ll be surprised if it can,” he said.

Most Medicaid spending is subject to federal mandates and, more recently, by provisions in the American Recovery and Reinvestment Act and the Affordable Care Act.

“We cannot restrict enrollment any further to reduce expenses, nor can we cut benefits to reduce expenses,” said Peter Hancock, a spokesman for the Kansas Health Policy Authority, which oversees the state’s Medicaid program. “The only option left, really, is what we went through the last time around when the governor went with a 10 percent across-the- board reimbursement cut, which wasn’t very popular.”

The state’s education lobby expected neither the Medicaid shortfall nor the teacher-salary windfall.

“During the session, the assumption was that FMAP (Medicaid) would pass and that the Education Jobs Acts wouldn’t,” said Mark Tallman, a lobbyist for the Kansas Association of School Boards. “Now, a lot of us are waiting the see what the regulations are going to allow. All of us, I think, have the same questions.”

Tallman said he doubted KASB would oppose efforts to use some of the education money to offset the Medicaid deficit, if federal regulations would allow that option.

“We’ve not talked about it collectively, but my sense is that our school leaders are well aware of the budget crisis the state is in and that other parts to the budget have already taken deeper cuts than education,” he said. “Our primary goal is to avoid further cuts.”

But Tallman said the state’s 22-mill property tax levy that helps underwrite public schools is expected to generate less revenue in the coming year.

“There’s a general sense that the statewide mill levy will bring in somewhere between $20 million and $40 million less than expected,” he said. “You’ll have to add that into the mix.”