Once Again, a Look at the State Budget Facts

By Martha Heberlein

It seems that every time the National Association of State Budget Officers (NASBO) releases a new report on the state of state budgets, another blog or paper is written to correct a misrepresentation of Medicaid’s role. Now, this is certainly not meant to be disparaging against NASBO – their reports are a definitive source on state spending. It’s more to get people to read all of page 1 of their most recent reportĀ prior to commenting.

If you stop at this sentence, it would seem as if Medicaid, as some say, is gobbling up state budgets:

The components of total state spending for estimated fiscal 2010 are: Medicaid, 21.8%; elementary and secondary education, 20.8%; higher education, 10.1%; transportation, 8.1%; corrections, 3.1%; public assistance, 1.7%; and all other expenditures, 34.4%.

But keep reading the very next sentence and you’ll get a more complete picture:

For estimated fiscal 2010, components of general fund spending are elementary and secondary education, 35.7%; Medicaid, 15.4%; higher education, 12.1%; corrections, 7.2%; public assistance, 1.9%; transportation, 0.8%; and all other expenditures, 27.0%.

The first sentence includes the federal matching funds that come into the state and I hope most people can agree that federal matching funds, while important both to the Medicaid program and to the economy in the state, are not actually state dollars.

So if you want to talk about Medicaid as a share of state spending, the second sentence is the far more accurate figure.