Governors and State Budget Officers Issue Review of Fiscal Conditions - November 24, 2009

The National Association of Governors (NGA) and the National Association of State Budget Officers (NASBO) issued a preliminary review of their biennial state fiscal survey on November 12, 2009. According to the preliminary review, despite the 4.8 percent reduction in spending that states made in FY 2009, states are confronting $14.5 billion in budget shortfalls in FY 2010 and anticipate $21.9 billion in deficits in FY 2011. Medicaid spending, which comprises approximately 22 percent of state budgets, averaged 7.9 percent growth in FY 2009, and Medicaid enrollment increased to 6.6 percent in FY 2010, versus 5.4 percent in FY 2009. With the impending December 2010 expiration of the enhanced FMAP provided under the American Recovery and Reinvestment Act, states will face the difficult decision of infusing more state dollars into their Medicaid programs or reducing Medicaid costs.