As U.S. stocks tumble, reflecting the growing concern of a recession, the National Conference of State Legislatures has asked Congress to consider states’ fiscal concerns in an economic stimulus package that is still being developed. In a letter to House and Senate leadership, NCSL offers options for consideration, including temporary changes in the Medicaid matching rate and increases in discretionary funds for states.
A freeze or increase in federal matching payments for Medicaid would assist people who lose healthcare coverage during the economic downturn and complement support provided in the economic stimulus package to extend and increase unemployment benefits.
And as each state will likely face different fiscal challenges in FY08 and FY09, discretionary grants provide states with the flexibility to address fiscal concerns through one-time state grant assistance. In addition, discretionary grants funds help eliminate shortfalls in state-federal partnerships.
“States are mandated to balance their budgets,” said William T. Pound, executive director of the National Conference of State Legislatures. “If the economy continues to slow or takes a turn for the worse, state finances undoubtedly will decline.” Read the letter.
