Lawmakers have been fast and furiously passing appropriations bills since the fiscal session began, in an attempt to meet their deadline of closing the session by month’s end. Appropriations bills set maximum spending levels for each state agency budget. While we have been watching to ensure the appropriation amounts do not change from last year’s estimates, the real news will be how much of those dollars agencies have to spend in the first place.

Enter the Revenue Stabilization Act, the bill that sets the spending priorities for the money available to the state. Revenues are down, forcing the state to cut this year’s budget by more than $200 million already. This bill is one of the few non-appropriation bills (besides lottery scholarship amounts) to be considered during the session. During the fiscal session, non-appropriation bills can only be considered with two-thirds vote of lawmakers. Doesn’t seem intuitive, but… this bill was filed last week, spreading available funds among agencies. It does not go into detail about specific expenditures (for example, we can’t tell what’s happening with substance abuse or ARKids First funding, even though Governor Beebe has indicated those are on hold, at least for now).

So, aside from some tug-of-war between lawmakers and the administration about who has authority to spend what and when—the real question everyone is asking: What is happening with Medicaid?

The administration is proposing to hold Medicaid spending at the same levels in Fiscal Year 2011 (which starts June 30, 2010) as this fiscal year. On the surface, this sounds reasonable … until you factor in that the way Medicaid grows from year to year, that’s actually a cut of $400 million for next year–$100 million of which is state revenue. If you’ve read the paper lately, you know this has everyone concerned. Last month, DHS and the state’s brand new Medicaid Director, Gene Gessow, held a meeting with stakeholders and providers to get advice on how and where to make cuts. Participants received loads of data and information from which to make proposals. Recommendations are due by March 1, and will be posted on the DHS web site. DHS says it will then prioritize recommendations to take to Governor Beebe. (Want to make recommendations? You can! Take a look at this presentation by Mr. Gessow for instructions and background).

Wait: if DHS isn’t receiving proposals until March 1, where does the fiscal session fit into this plan? Well, legislators have been asking that too. Many have expressed frustration and skepticism about closing the fiscal session without knowing the exact ways in which Medicaid will be cut. So yesterday Rep. Gregg Reep, Chair of House Public Health, said he would bring language to the Joint Budget Committee Monday to attach to the DHS budget, ensuring that any major decisions about cuts are run by legislators for review after session. And on Tuesday, a joint meeting of the Senate and House Public Health Committees will meet to hear from Mr. Gessow and DHS Director John Selig about plans moving forward. (Note: for those of you watching House proceedings online, it’s not clear yet whether this will be viewable, since it is in a different room than usual).

More to come next week…