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Musgrove offers Medicaid fix, eyes tobacco fund for next year

By Staff
NEW BUDGET Mississippi Gov. Ronnie Musgrove, right, unveils his new budget Friday before a meeting of the joint House and Senate Appropriations committees at the state Capitol in Jackson. Musgrove said he found the means of raising $148 million to erase the deficit in the Medicaid program. AP photo
from staff and wire reports
Jan. 26, 2002
JACKSON Gov. Ronnie Musgrove proposes fixing this year's Medicaid deficit without touching the tobacco trust fund but he relies on the fund to fill out his budget for next year.
Not everyone was convinced.
At Musgrove's first mention of tapping the tobacco money, state Attorney General Mike Moore turned to an aide and said in a loud whisper: "There goes the trust fund."
The fund was established in 1999 with money from a lawsuit settlement Moore negotiated for the state in 1997. Moore sued tobacco companies to recover public costs of treating sick smokers, basing part of his claim on Medicaid expenses.
Mississippi receives millions of dollars a year from tobacco companies, with the money going into a trust fund. Earnings from the fund are then earmarked for health care.
State legislators are in the early stages of crafting Mississippi's budget for the fiscal year that starts July 1. The House and Senate must approve a new state budget by the end of the 2002 Legislature in April.
On Friday, Musgrove offered his own budget proposal for lawmakers this, despite the fact that House and Senate leaders rarely give serious consideration to a governor's funding suggestions.
Musgrove proposes a $3.7 billion general fund budget. About $337 million of that would come from two years of tobacco payments money received last December and money due to the state this December.
Musgrove said "every penny" of the tobacco dollars would go the health programs beginning July 1.
He said economic growth should provide enough money in the future so the state can cover budget needs with only one year of tobacco payments at a time.
To tackle this year's Medicaid shortfall, the governor said he would require faster tax payments by Mississippi's largest companies and use money from a rural road fund.
Musgrove said he wants to avoid cutting Medicaid services to the needy, aged, blind and disabled.
He said the Medicaid shortfall should be $148 million for the current fiscal year, which ends June 30 $6 million less than the deficit cited a day before.
Musgrove asked legislators for quick action to cover the Medicaid deficit so the program can avoid going broke in February.
He proposed using $48 million that's now going to the state-aid road program. The program helps counties build rural roads.
The governor said the state-aid roads would not lose money because Mississippi would borrow $48 million to replace what was taken from the program.
He said the state could reap $100 million by demanding that large companies submit their sales tax collections to the state weekly instead of monthly. The payments would have to be made electronically.
Musgrove's ideas were met with some skepticism.
House Appropriations Chairman Charlie Capps, D-Cleveland, said Musgrove relies on "one-time money" funds that will be available one year but can't be counted on in the future.