Plummeting state tax revenues could affect Medicaid

State tax revenues have declined steeply in recent months, according to a new report by the Center on Budget and Policy Priorities. These decreases could prompt cuts in programs such as Medicaid, a report in The Wall Street Journal reported.  

The median state experienced a decline of 5.9% in total tax revenue during the last quarter (July to September) of the fiscal year, according to the report. Total inflation-adjusted revenue was below 2007 levels in 14 of the 15 states studied.

State governments are required to balance their budgets every year. Reducing Medicaid eligibility as a way to cut costs could make aspects of the current economic downturn worse, according to the Journal. Cutting reimbursements to Medicaid providers, such as nursing homes, could also be overall detrimental, the Journal said.

To see the report, go to http://www.cbpp.org/10-24-08sfp.htm.