Fiscal matters take center stage in 2013

Medicaid, education funding and state employee pensions and benefits top the list of fiscal issues facing state legislatures in 2013, according to the National Conference of State Legislatures (NCSL). A survey of state legislative fiscal officers found that while most states report stable conditions, states face budget dilemmas in 2013 that will require tough choices.

Many states are gearing up to tackle rising costs and expansion of Medicaid, the health insurance program for the poor, under the national Affordable Care Act. At least 34 states are expected to address health care issues in 2013, according to the NCSL survey. That includes Maine, where officials reported that Medicaid spending continues to grow despite a reduction in caseloads, and Oklahoma, where Medicaid changes will likely be central in budget development.

Education funding is expected to take priority in at least 23 states, with discussions centered on adequate funding levels, school finance formulas and increased student enrollment. Legislators in Arkansas will focus on ways to provide adequate funding for all public school students, while Oregon lawmakers will explore funding for a redesign initiative for the entire pre-K through graduate school system.

In 13 states, pensions and employee benefits are expected to take center stage, with lawmakers focusing on reforms and unfunded liabilities. Kentucky legislators will consider recommendations from a task force on public employee pensions. In New Hampshire, meanwhile, court rulings are pending on changes made in 2011 to state employee retirement benefits and contributions. The courts’ decisions could mandate further action from the legislature.

Other 2013 fiscal issues identified in the NCSL survey include tax reform, transportation and infrastructure funding and the effects of possible federal budget cuts.