While many states are beginning to see their revenues creep back up to pre-recessionary levels, their internal fortunes are being countered by potential cuts in aid from the federal government for Medicaid and other healthcare-related programs, The New York Times reported.
Although data from the National Governors Association and National Association of State Budget Officers concludes that general fund revenues collected in 2012 will exceed 2008, adjusted for inflation they remain below pre-recession levels.
And that will be compounded by cuts from the federal government
"What we're really seeing here is there is not enough money to make up for any federal cuts," Scott D. Pattison, executive director of the state budget officers' association, told the New York Times. "What I've heard from the state budget people is that they've told departments and agencies in state government: Do not expect us to have the money available ... to make up for federal cuts."
Meanwhile, the costs of Medicaid continue to rise, the article noted.
For example, in the conservative state of Indiana, Medicaid expenses are expected to increase $450 million over two years, thanks to additional enrollees and other health reform changes, the Northwest Indiana Times reported.
Gov. Mike Pence is proposing a budget that would include tax cuts but could leave Medicaid on the short end of the rope, particularly as the Affordable Care Act expands that program in 2014.
But even if no state decides to participate in Medicaid expansion as part of the ACA, they can expect Medicaid costs to rise dramatically.