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State gains $55.6 million budget cushion after lower caseload forecast

Post by Brad Shannon / The Olympian on June 29, 2012 at 5:17 pm |
June 29, 2012 5:44 pm

It isn’t much, but Washington state budget writers are taking every nickel and million dollars they can get these days. This week’s quarterly caseload forecast is predicting smaller increases in many program enrollments through June 2013 – with the biggest savings coming in the Medicaid medical assistance to poor families, according to the state Office of Financial Management.

Bottom line: $55.6 million in reduced costs expected through mid-2013 and a $350 million cushion against state emergencies over the next year.

The “categorically needy” program in Medicaid that serves people whose low incomes or situation automatically qualifies them for medical help is now expected to have enrollments about 11,931 below the February forecast, which is what the state’s supplemental budget was based on. The result is a $29.7 million reduction in the costs assumed by the budget that passed the Legislature.

Another $11.9 million is saved by having 150 fewer kids in the birth-to-prekindergarten programs and $14.4 million from having 1,423 fewer kids in K-12 schools. On the other hand, more are enrolled in economic-assistance and Medicaid programs serving the aged, blind and disabled.

The net result of the caseload savings – which are offset by the $16 million reduction in revenues in the June 20 revenue forecast – is that state reserves for the budget cycle are now about $350 million, state budget director Marty Brown said.

That is the cushion the state has against any shocks to revenue or expenses through June 30, 2013. Brown says that assumes the state doesn’t lose $12 million from a legal challenge to the new law that extended the tobacco tax to roll-your-own cigarettes.

The state budget adopted in the spring had set aside reserves of about $308 million.

The caseload forecast from Wednesday is here, and the Office of Financial Management’s chart on the caseload budget impacts is here. The June 20 revenue forecast is here.

UPDATE: The Associated Press reports that the state Supreme Court issued a stay in the Franklin County case where a judge had issued an injunction blocking tax collections in the roll-your-own cigarettes case. The judge had issued an injunction against the tax earlier in the week but plaintiffs did not post a $200,000 bond to protect the state against losses if the tax were not collected, the Department of Revenue says. This means the state begins collecting the tax on Sunday.

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