May 23, 2003
MASSACHUSETTS TO RECEIVE $550 MILLION IN FEDERAL FUNDS
Governor Mitt Romney today announced that Massachusetts is in line to receive a $550 million infusion of federal funds, making it easier to pay for Prescription Advantage and reduce the state’s reliance on reserves to balance the state budget.
However, Romney urged the Legislature to show continued fiscal restraint in their budget deliberations and warned against thinking the fiscal crisis has passed.
“This is certainly good news, but the work of reform is not over,” said Romney. “We still have a sizable deficit in next year’s budget and our commitment to solving it without raising taxes will require hard, necessary decisions.”
The additional monies are contained in the “Jobs and Growth Tax Relief” package passed by the U.S. Congress and sent to President Bush for his signature. Significantly, in the area of Medicaid, the legislation provides a temporary 2.95 percent increase in the federal medical assistance percentage (FMAP).
“We have always believed that it’s possible to increase our federal Medicaid share, which is currently 50 percent. It was part of our health care policy in last year’s campaign. Not everyone believed it was possible, but along with many other people we fought for it,” said Romney.
He noted, “By raising the reimbursement rate a few percentage points, we are bringing in additional hundreds of millions of dollars to Massachusetts, which will give us the flexibility to preserve vital programs like Prescription Advantage.”
The FMAP increase is projected to provide an additional $334 million to Massachusetts between now and September 30, 2004.
Congress also set aside $10 billion in additional fiscal relief for the states. The first $5 billion will be made available within 45 days of the bill’s signing, and the second half by October 1 of this year. Massachusetts will receive two payments of $108 million each under this provision.
Noting the temporary nature of these revenues, Romney urged lawmakers to “hold the line” on additional spending and continue to focus on reform as the only way to solve the long-term structural problems with the state budget.
“Our state is at a crossroads. We should seize this opportunity to fundamentally reform the way state government does business,” said Romney.
The Governor thanked members of Congress and the President for recognizing the fiscal challenges faced by the states and the expense associated with federal mandates and higher health care costs.
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