Sen. Gilda Jacobs: Without Medicaid funding, state will face budget crisis

The state of Michigan is waiting on $500 million from the federal government to shore up Medicaid spending. But the money is tied up in Congressional battles over extending unemployment benefits, which in turn are stalled by the unexpected passing of Sen. Robert Byrd (D-West Virginia).

Without the Medicaid funding, Michigan will have to trim another $500 million from the budget. Gov. Jennifer Granholm was in Washington D.C. last week hitting the halls of Congress, lobbying not only for an extension of unemployment benefits, but for the Medicaid cash.

Not getting the cash, says state Sen. Gilda Jacobs (D-Huntington Woods), could lead to a nasty budget battle this fall. She says the state budget is in “deep trouble” without the influx of federal cash.

“I don’t think we can afford that,” Jacobs said of cutting $500 million from the budget. “There’s very little we can still cut from the budget.”

That she said will lead to partisan gridlock similar to that witnessed in the Senate and House last September which lead to a temporary shut down of the state government.

The solution she says, is tax increases — something that the Republicans have rejected time and time again. And Granholm has run the white flag of surrender up on her calls for a service based sales tax. She says it won’t happen this year, and she is not going to fight for it.

“It doesn’t appear that anyone wants to look at raising taxes,” said Jacobs. “That may be the only way out.”

But Jacobs does seem a glimmer of hope on the horizon. If the state gets the fed cash, she expects lawmakers will complete the budget process and avoid a shut down. The reason?

“Too many people are running for state office, and they don’t want that in their campaigns,” she said.

But in the end, Medicaid cash or not, the state continues to suffer financial woes.

“We shouldn’t be hanging by a thread and we are at this point,” she said. “We need to be more planful.”