It is time to say goodbye to 2012 and start handling the challenges presented by 2013.
This will be a critical year for our state as we bear the combined effects of the recession, Obamacare and the fiscal cliff. As a small business owner I am very concerned about the results of the government takeover of healthcare in our country. I am personally dismayed at the prospects of what these changes will mean long-term to my family, to my employees, to the people of our state and, ultimately, to the citizens of this country.
The state was hit with a large increase in costs when the federal government lowered our Medicaid reimbursement rate, called FMAP. The cost to our state budget was immediate and immense, and the effects of the change will be felt for years to come.
The Administration is projecting a deficit for next fiscal year (FY14) of over $800 million dollars.
Additionally, the Revenue Estimating Conference met in December and recognized a decrease in revenues for the current year (FY13) and for the coming year (FY14). The REC's lowering of our estimated revenues by $165 million for the current year only gives the governor six months to cure the deficit, which annualizes to a $330 million cut. The way the governor is choosing to cure the mid-year deficit will result in more than $70 million in cuts, annualized to over $140 million in next year's budget.
So the problems are very easy to predict -- in the past we have cut allocations to higher education and healthcare -- and the results are just as predictable. This Legislature has got to find a better solution to our budget crises than the continued destruction of our higher education and healthcare systems.
While the hurdles we face are high, we have been through difficult times before. I know the resilience of our people and our institutions will help see us through challenges again, and I will continue to work in the Senate to improve not only our present but our future, as well. As always, please let me hear from you if you have questions, concerns or ideas. Your continued participation will be vital to any success we may have in the battles that will be fought in the Legislature starting in April.