Budget relief coming from Congress?

With the state government facing another $1.8 billion deficit for the next fiscal year, everyone is expecting a bitter fight over the budget this summer and fall. But there may be some federal help on the way. On my radio show Thursday night I interviewed Mike Lillis, the congressional correspondent for our sister site, the Washington Independent, and he indicated that there is a move in Congress to send more funds to the states in three key areas — Medicaid, transportation and education.

We reported on Wednesday that Gov. Granholm had joined 41 other governors in asking Congress to extend the enhanced Medicaid matching funds in the stimulus bill to help the states pay for the record numbers of citizens that now rely on that program for their health care. Lillis said it is likely that Congress will do that soon.

He also said Congress is expected to pass legislation sending more federal funds to the states for education and transportation funding.

The more federal funds the state can get in those three areas for next year, the lower the state deficit will be and, consequently, the lower the revenue that will need to be made up for either by cuts or tax increases.