By Rachel Whitten
July 29, 2010

(KansasReporter) TOPEKA, Kan.- Although the federal government resumed sending long-term  unemployment benefits to states last week, Kansas and dozens of  other states are still waiting on a similar extension of Federal Medical Assistance Percentages (FMAP) to balance budgets.

The extension would mean the federal government would continue to pick up 70 percent of Medicaid costs for states, a benefit that first came under American Recovery and Reinvestment Act, or the federal stimulus. Normally the federal government picks up only 60 percent of the Medicaid tab for states.

Kansas Speaker of the House Mike O’Neal, a Republican from Hutchinson, said Thursday the current budget in Kansas that passed in May includes $131 million that is supposed to come from the extension of the higher percentage of FMAP assistance. If U.S. Congress doesn’t extend the FMAP benefits, Gov. Mark Parkinson, a Democrat, would be forced to seek an allotment to cover the shortfall in available funds. Allotments are authorized by the Department of Administration and the Budget Director, giving the governor the ability to go through state agency budgets and cut wherever he sees fit, enough to bring the budget up to zero.

“If it becomes apparent the money is not going to be there, it’s really not the legislature that will have the first challenge it will be the Governor. It was his administration that plugged the assumption in,” O’Neal said.

Parkinson, however is not running for reelection, so it could be up to the next governor to deal with the potential shortfall.

Last month, Parkinson joined other governors in urging the U.S. Congress to end the debate about deficit spending that has held up the extension, and pass the additional benefits.

Thursday, Parkinson’s press secretary Amy Jordan-Wooden said because the budget was built around the assumption of the extension, without the additional money, education could be affected.

“Here in Kansas, we continue to be disappointed that the Senate has not passed this important assistance to the states. This has dire consequences to everyday Kansans,” Jordan-Wooden said. “The Governor will continue to lobby the Congressional delegation to put politics aside and move this issue forward. Without it, potentially thousands of teachers could be laid off.”

It’s important to know though, that it would be up to Parkinson to choose where to make the cuts if the extension goes through.

O’Neal said the budget should have never been built around that assumption in the first place.

“We need to bite the bullet and keep spending in line with available revenues. It’s very bad public policy,” O’Neal said. “This is just a debate over whether or not the stimulus should be extended and many believe it should not. Obviously Kansas has put itself in a position that it’s become dependent upon an extension of that package.”

Furthermore, he said, it important to remember where the federal money comes from in the end.

“It’s telling that we have this mindset that we’re so dependent on the federal government giving us money, as if they could just produce it out of thin air,” O’Neal said. “The federal government is spending money it doesn’t have ultimately and the taxpayer will have to foot the bill.”