Putting a Budget Together Like a Puzzle…Without all of the Pieces

Last week, it was reported that the state is still waiting on over $360 million in federal stimulus money that has already been factored into next year’s state budget. The good news is that we still have over three weeks to go before the new budget takes effect, which means there is still time to get the funding in place before the start of the 2011 fiscal year. The bad news (according to various sources) is that Congress has already passed a stimulus expansion bill that removes $24 billion in Medicaid funding, of which over $266 million was designated for Connecticut.

This does not mean that the Medicaid dollars cannot be restored, things like this happen all of the time with congressional approval coming at the very last minute. But it is a cause for concern as the budget which passed on the last day of the legislative session is so reliant on one-time expenditures – such as stimulus money – that there is really no room for error, or in this case the federal money not coming through.

Throughout much of the 2010 session it seemed as if the tough decisions that go along with making substantive changes, ones that will create real reform to the state budget, would be put off until next year, and that is exactly what happened. This year could be best described as the legislature trying to make all the pieces of a budget puzzle fit anyway they could to avoid cutting spending or raising taxes. Unfortunately, some of the important pieces of that puzzle were missing as we are now finding out.

In a June 1st article posted on the news publication CTMirror.org, a reference to a May report issued by the National Association of State Legislature’s (NCSL) stated that “Connecticut is one of 30 states counting on Congress to approve billions in emergency health care aid for next year – and one of 21 lacking any back-up plan if the funding doesn’t come through.”

In the recent months I have talked in great length about the closed door process that has become the norm at the legislature when dealing with budgetary matters. But it is things like this that would make people stand up and say “we can’t do that!” if more were involved in crafting the budget.

This also raises questions about the state’s use of stimulus money. After all, the intention of the federal stimulus dollars was to create jobs, which in turn would grow the economy. However, plugging budget holes with this funding seems more like a bailout than something that would actually spur job growth.

We are just about one month removed from the legislature’s passage of the 2011 budget and a major portion of that debate dealt with the use of stimulus money, rainy day funds and bonding. Now it would seem that a large chunk of federal money that is expected to cover the upcoming fiscal year is in jeopardy, but in reality it was never there to begin with – that’s the problem.