WASHINGTON — The Senate yesterday voted 61 to 39 to approve a $26 billion measure that would extend but phase out increased federal Medicaid payments to states through June 30 and give $10 billion to local school districts to prevent layoffs.
The measure would increase the Federal Medical Assistance Percentage — federal matching funds for Medicaid — next year by 3.2% for the first quarter and then lower the figure to 1.2% for the second quarter.
The FMAP had been increased since February 2009 to at least 6.2% but the increase was set to expire at the end of this year. The extension through next June would provide a total of about $16 billion extra funding for Medicaid programs. The bill also would give school districts another $10 billion.
The additional funding would assist state governments through fiscal 2011, but would not fully close their budget gaps.
“This amount isn’t going to be enough to fully solve state budget shortfalls,” but it will prevent some spending cuts, said Brian Sigritz, director of state fiscal studies for the National Association of State Budget Officers.
Roughly half of states had assumed they would be receiving additional FMAP funds through an extension, Sigritz said. The measure would “kind of be a bridge to get the states to fiscal year 2012,” he said.
NASBO, the National Governors Association, and other groups have predicted that fiscal 2011 will be difficult for states but hope that 2012 will see more revenue coming in.
As of April 29, at least 29 states had finalized their budget plans for fiscal 2011.
The states that had incorporated an FMAP extension into their budgets anticipated about $12 billion total would be coming from the federal government, according to a National Council of State Legislatures report in late April.
Governors for most states have said that Medicaid and education funding must be extended if Congress wishes to prevent more state and local program cuts and layoffs.
The legislation, which was originally introduced as an amendment to a transportation bill by Sen. Patty Murray, D-Wash., must still be returned to the House for a vote.
Speaker Nancy Pelosi, D-Calif., has said she will return the House to session Tuesday to vote on it. It would also need to be signed into law by President Obama, who strongly supports it.
To offset FMAP costs calculated by the Congressional Budget Office to be at least $16 billion over 10 years for, Senate members agreed to an earlier sunset date of March 2014 for American Recovery and Reinvestment Act food stamp benefits and to rescind funding for other programs, among other actions.