Governor lobbies for funds for states - East Valley Tribune: East Valley Local News

Governor lobbies for funds for states

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Posted: Saturday, March 1, 2008 8:16 pm | Updated: 9:19 pm, Fri Oct 7, 2011.

Gov. Janet Napolitano says if Congress wants to stimulate the economy it should give at least some of the money to her - or, more to the point, directly to Arizona and other states.

In testimony before the Senate Finance Committee in Washington last week, the governor said the $168 billion tax rebate stimulus plan already approved will have a negative effect on tax collections in some states. That's because of a change in depreciation laws.

Arizona is not affected, but Napolitano said the larger issue that lawmakers need to remember is that the factors that have harmed the national economy also have affected the states.

The governor specifically asked for a temporary $6 billion increase in federal cash going to state Medicaid programs.

Health care for the needy is provided in this state through the Arizona Health Care Cost Containment System. Federal funds now make up about two-thirds of the total cost.

On top of that, Napolitano asked federal lawmakers for another $6 billion in what essentially would be unrestricted block grants to the states - money states can spend pretty much how they want - to deal with other financial problems like state aid to schools.

Napolitano later told Capitol Media Services there is precedent for what she is seeking: She said that's exactly what happened five years ago when Congress adopted a different stimulus package.

Arizona got about $300 million.

"And that closed the gap," she said, referring to the budget deficit the state had that year. "And that meant that we could operate the Medicaid program without removing people from health care."

The governor told the committee that giving money to states when the economy is soft makes sense.

"The economic downturn will increase unemployment, which will drive more people to seek a lifeline through Medicaid and other poverty-based programs," she testified.

She said during the last downturn, Medicaid enrollment nationwide grew 8.6 percent between 2001 and 2002. And Napolitano said the figure in Arizona during her first full budget year - from July 2003 through June 2004 - saw AHCCCS enrollment shoot up by 17 percent even as state revenue was increasing just 1 percent.

And Napolitano warned that even if the economy starts to improve, that won't result in an immediate reduction in state costs.

She said Medicaid enrollment typically lags behind the economy "because it can take several months for children and families to become eligible."

The governor also chided some rule changes by the Bush administration she said actually will result in increased Medicaid costs to the state. She accused the administration of an "intentional move ... to remove billions of federal Medicaid dollars from our existing health care system without taking on any of the responsibilities that states must pay for."

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