BISMARCK -- Eight million dollars of North Dakota's $69.6 million federal windfall will help assure there are no cuts in medical services for the poor the next two years. The rest will be held as a cushion, Gov. John Hoeven said Thursday.
Congress' tax relief package passed in May contained billions in financial aid to states. Hoeven said that for 47 states, it only serves to ease their deficits. Because North Dakota doesn't have a deficit, it's extra money.
North Dakota gets $19.6 million earmarked for Medicaid -- and a $50 million block grant with few restrictions, to be received over two years. Medicaid provides health care for poor and disabled citizens.
Congress also reduced income taxes for some North Dakotans, so that makes the $50 million only a net $36.2 million boost, he said.
There is only one place it should go, Hoeven said. Legislators planned for only a $10 million cushion in the state's 2003-05 budget, and that is too small, the governor said. All of the $36.2 million should be used to push that cushion to $46 million, he said.
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Hoeven said it would be a mistake to spend the money on programs and find out two years from now that the state can't afford to sustain that level of spending on those programs.
If the Legislature wants to spend the windfall differently, he said, they will have to come back for a special session.
The governor also said the state will hang onto $11.6 million of the $19.6 million in Medicaid money so it can make up for anticipated cuts in federal Medicaid help in 2005 and beyond. The other $8 million will be spent on Medicaid starting next month.
Hoeven said it means some of the optional Medicaid services such as dental, won't suffer cuts.
And, he said it will indirectly allow the state to spend more of its state funds on non-Medicaid programs. This includes home and community based care such as "SPED" and "expanded SPED" -- service payments to the elderly and disabled -- which are totally paid for with state funds.
Hoeven and Department of Human Services officials said at the end of the legislative session those programs were underfunded and many people eligible for SPED and other programs would not get services.
Now, he said Thursday, "We really think we're going to get much closer to meeting the needs we projected."
The governor's plans for the $69.6 million will be explained to the Legislature's Budget Section Tuesday.
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Readers can reach Forum reporter Janell Cole at (701) 224-0830
