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Ark. lawmakers reject surplus for Medicaid fix

Arkansas lawmakers have rejected a proposal to set aside up to $100 million in surplus funds to pay for a growing shortfall in the state's Medicaid budget expected in 2013.
LITTLE ROCK, AR - A budget showdown at the capitol goes the way governor Beebe hoped for. We're talking about Medicaid.

There's enough money to keep Medicaid going this year, but major problems loom.

Medicaid is the state's largest insurance program for lower income kids, the elderly and disabled.

"No one disagrees there's a Medicaid crisis. Not everyone can agree we need to start doing something about it."

For Republican senator Jonathan Dismang (R-Beebe), it's a question of timing. Estimates now put the Medicaid shortfall at $400 million by July 2013.

"There's going to be a discussion to raise taxes,” Dismang says. “That's something I'm not willing to do and I don't think there's an appetite to do in the legislative body."

So Dismang is pushing to take a pot of $40 million sitting in surplus and move it over to the Medicaid trust fund right now.

An idea Governor Mike Beebe and Democrats characterize as premature and unnecessary.

"That money isn't going anywhere. If they want to put that in the Medicaid trust fund in January when they're in charge, they can do that. That's just money that sits there," Beebe told reporters.

Some legislators say moving the money out of surplus takes away the state's safety net for responding to another crisis like tornadoes or floods.

"I would contend there is no bigger crisis than the Medicaid shortfall that's facing us," Dismang says.

But Dismang's colleagues aren't with him. His plan to move the money needed 29 yes votes in the Joint Budget Committee, it got only 16.

A vote is expected in committee tomorrow to move it to the full house.

The House and Senate are expected to make budget votes on Thursday and Friday.

The three week budget session is set to wrap up on Friday.

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