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Legislative leaders warn of $12 billion shortfall, say Medicaid and early‑learning programs at risk
Summary
Leaders told reporters that the majority’s Ways and Means review shows an approximately $12 billion four‑year shortfall and that, absent new revenue, proposals include deep Medicaid cuts and reductions to early‑learning programs such as Fair Start for Kids. They said federal budget proposals to cut Medicaid would compound state risks.
Legislative leaders said the state faces a multi‑billion dollar budget shortfall and are preparing to make difficult choices that could affect health care, early learning and other services.
Speaker 1 said the majority’s line‑by‑line work with nonpartisan Ways and Means staff produces a four‑year shortfall figure of about $12,000,000,000 and that differences with lower estimates hinge largely on assumptions about negotiated raises and compensation for state employees. "The actual number is around $12,000,000,000 over 4 years," Speaker 1 said.
Speaker 2 and others warned that a no‑new‑revenue scenario forces consideration of program reductions that leaders do not want to make. Speaker 2 listed proposed cuts highlighted on the caucus' website, including potential elimination of Medicaid kidney dialysis services, the Medicaid pharmaceutical benefit and Medicaid family‑planning services. "Those are not cuts that we want to make," Speaker 2 said.
Leaders also said federal developments increase the urgency. Speaker 2 noted a U.S. House budget resolution passed the prior day that would call for deep Medicaid reductions nationwide; the caucus said those federal proposals would compound the state shortfall and could put low‑income residents at higher risk.
The leaders described the review process as iterative: meeting with the Office of Financial Management (OFM) and comparing agency‑provided cut lists so the legislature can identify savings that minimize harm. Speaker 1 said some savings assumptions — such as expecting 0% pay increases for state employees — are unrealistic in the current labor and inflation environment and materially change the shortfall calculation.
On short‑term liquidity, leaders discussed proposals to use state reserves to ease the first year of the next biennium but warned those amounts (cited roughly $1,700,000,000 in the budget stabilization account) would not cover deeper, sustained federal funding cuts to Medicaid. The leaders said any transfer of reserves would be paired with plans to repay funds within the four‑year outlook.
Next steps: leaders said they will continue meetings with OFM and produce lists of bills that can realistically move through Ways and Means and appropriations as the session advances. No formal votes or final budget actions were taken during the press availability.
