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A little stimulus, a lot of bailout

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A little stimulus, a lot of bailout

Could be a good fix for hillbilly teeth

By Doug Thompson

The so-called stimulus package is mostly a Medicaid and school spending bailout.

Schools and health are mighty fine things. Without this bailout, many states faced big cuts.

However, if keeping up current levels of school and health spending was a stimulus, the economy wouldn’t be in this mess. We’d be stimulated already.

The real nature of the stimulus package shows in Arkansas’ share of it. Arkansas is one of only seven states that isn’t facing a big deficit. Therefore, most of the money provided by the stimulus doesn’t really fit in the state’s budget. I’m confident our Legislature will find a way to spend all of it. Just give them a little time.

For instance, $730 million of Arkansas’ share — more than a third of the $2.1 billion we get — is to fill budget shortfalls in Medicaid. Since the state doesn’t have any budget shortfalls in Medicaid, our lawmakers are at a bit of a loss so far about what to do with it.

In fairness, the big reason the state doesn’t have a shortfall in Medicaid is because the state doesn’t serve as many people as other states do. There’s a waiting list of about 1,000 Arkansans who qualify for some type of Medicaid care but who don’t get it. That’s “a lawsuit waiting to happen,” as Sen. Randy Laverty, D-Jasper, can tell you. Lots of Medicaid providers haven’t received a raise in fees or other budget increase in years. So we seem, with some justification, to appear stingy compared to other states. At least we did when times were good. Now the other states appear broke and desperate.

About the best suggestion I’ve heard on what to do with a $730 million one-time windfall of Medicaid money came from a north Arkansas lawmaker: “Well, we could fix a whole lot of hillbilly teeth.”

Much of the rest of Arkansas’ stimulus share is to make-up budget cuts in school spending — another problem we don’t have thanks to the state Supreme Court’s ruling in the Lake View school funding case. Our education spending goes up every year, like it or not. Add health and education together and you have well over half of our share of the stimulus package accounted for.

In fact, Gov. Mike Beebe said that there could be a real problem with education money in the stimulus. The money is specifically earmarked for making up deficits or increasing public school spending that’s been flat for years. Well, there’s no such problem in Arkansas. Therefore, we’re not sure if we can legally spend the money, the governor said recently. Our congressional delegation is working with the state on that. Again, where there’s a will there is a way.

Highways, once thought to be a major stimulus area, wound up with one-sixth of the $2.1 billion in the final package. That $358 million compares to an estimated $19 billion of unfunded highway needs for the next 10 years.

Now the auto companies are asking for money. There’s not much left. The chances of another stimulus bill in the future isn’t that great, either. If the economy revives, we won’t get another stimulus. If the economy doesn’t recover, all this stimulus does is put off the pain of health and school spending cuts off for a couple of years. Either the economy recovers or most states will have to cut that spending in two years — or we get another such bailout.

In short, the best thing that can be said for the stimulus is that it’s better than nothing. There is some stimulus in there. Hey, $358 million for roads is something.

How much the rest of the package benefits Arkansas will depend on the creativity of our state government more than anything done in Washington.

 

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