States face another $12 billion budget shortfall

By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney.com) -- States filled an $84 billion gap to balance their 2011 fiscal year budgets, which took effect earlier this month. But they could collectively face a new $12 billion hole if Congress fails to help cover growing Medicaid costs.

Without another injection of government money for Medicaid, four states -- California, Texas, North Carolina and New York -- could face new gaps exceeding $1 billion each, while 21 others could see shortfalls over $100 million, according to a budget report issued by the National Conference of State Legislatures.

chart_state_budgets_3.gif

The Recovery Act initially paid out additional money for the insurance program -- which helps the poor -- through Dec. 31, the halfway point for most states' 2011 budgets.

Then, earlier this year the House and the Senate approved measures that extended the payments through June 30, 2011. As a result, many state legislatures became optimistic and planned their budgets around having the additional funding.

But the bills have since fallen victim to mounting concerns over the national deficit.

And though state officials say revenue is beginning to pick up and will likely surpass 2010 collections, the growth is still not sufficient to offset the loss of stimulus funds.

"States are in a tenuous fiscal position, teetering between delicate revenue improvement and the end of the federal stimulus funds," said Corina Eckl, National Conference of State Legislatures' fiscal program director.

"If Congress decides not to extend enhanced [Medicaid] rates for six months, it will be another blow to the states' fragile recovery," she added.

In fact, a majority of states are also worried about budget challenges for fiscal years 2012 and 2013. So far, 33 states anticipate gaps totaling $72 billion for 2012, and 23 states predict shortfalls amounting to $64 billion for 2013.  To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 32,627.97 -234.33 -0.71%
Nasdaq 13,215.24 99.07 0.76%
S&P 500 3,913.10 -2.36 -0.06%
Treasuries 1.73 0.00 0.12%
Data as of 6:29am ET
Company Price Change % Change
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
Data as of 2:44pm ET
Sponsors

Sections

Bankrupt toy retailer tells bankruptcy court it is looking at possibly reviving the Toys 'R' Us and Babies 'R' Us brands. More

Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.