Answer: they used it to plug their 2009 budget gaps, knowing full well they’d be driving off a budgetary cliff in 2010.
I seem to recall that Porkulus money was meant to create jobs and build infrastructure. States were supposed to use the money for one-off, “shovel-ready” projects that wouldn’t extend beyond a year’s budgetary cycle.
But did the states use the money in a responsible way? From an article entitled “Stimulus Funds Bring Relief to States, but What About 2010?” in Tuesday’s Washington Post:
NEW YORK — As states across the country grapple with the worst economy in decades, most have cut services, forced workers to take unpaid days off, shut offices several days a month and scrambled to find new sources of revenue.
The good news is that much of the pain this year has been cushioned by billions of dollars of federal stimulus money, which has allowed states and localities to avoid laying off teachers, prison guards, police officers and firefighters.
The bad news is that for the next fiscal year, beginning in July, the picture looks even bleaker. Revenue is expected to remain depressed, even if the national economy improves. There will be only half as much federal stimulus aid available, and many states have already used up their emergency reserves.
Most states have just approved a budget for the fiscal year that began July 1, and their legislatures have adjourned for the summer. But in a dozen or more states, those budgets have already gone into the red less than two months into the fiscal year, by a total of about $24 billion. More than 30 states are projecting deficits for next year, according to the Center on Budget and Policy Priorities, a Washington-based think tank, and other expert estimates.
The economic picture in state capitals has looked bad since last fall, when the national economy first went into freefall and many governors called their legislatures into emergency sessions to make drastic mid-year cuts for such things as health-care services and support for public colleges and universities. But as legislatures have just completed their regular budgeting process, the extent of the fiscal disaster is only now becoming clear — and some are already talking about additional special sessions this fall, with more painful cost-cutting ahead.
Fine, fine. We know the states were in a self-inflicted pickle. But what of the Porkulus money?
This year, the federal stimulus package signed into law by President Obama in February served as a lifeline. For all the intense partisan debate in Washington over whether the stimulus so far has worked, in the states there is little question that federal cash has staved off catastrophe.
According to the General Accounting Office’s July report, by June 19 the federal government had disbursed $29 billion to the states, with 90 percent of that money going to Medicaid, to help states maintain coverage levels, or to help them stabilize budgets and avoid layoffs.
So, 90% goes to prop up Medicaid, that efficient, cost-effective, government-run program dispensing health care to the needy? And next year? Why, off the cliff you go!
Fact: Medicaid is eating state governments alive. In Maine, it’s a third of the budget and over 25% of the population are on “MaineCare”, which is what we call it here. Bear in mind that this disaster has been staring politicians and state administrators in the face for years. It’s hardly a surprise. Yet, in Maine, various “advocates” for the poor as well as bureaucrats in the state Department of Health and Human Services tout the program as a positive good.
Better start cutting now. And support TABOR if you’re from Maine.
H/T to Ed Morrissey on the WashPo article.
More coverage at Are You Freaking Stupid? and Conservative Cabbie.
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