Times may be tight in Richmond as the economy slows and the Northern Virginia real estate sector sputters, taking a bite out of recordation tax revenues, but there is a glimmer of good news on the spending side. Projected costs for Medicaid, one of the major drivers of state spending, are expected to moderate over the next couple of years.
According to a presentation, “Budget Outlook: 2008 Session,” prepared by the House Appropriations Committee for its annual retreat earlier this month, Medicaid spending has increased at an average annual rate of 8.3 percent since Fiscal 1996, hitting 15 percent in Fiscal 2003. Expenditures are expected to moderate: 7.0 percent this year, 6.1 percent in Fiscal 2009, and 5.4 percent in Fiscal 2010.
The House document cites slower enrollment growth of children, pregnant women and low-income adults, a slowdown in growth of the elderly and disabled, and a moderation in health care inflation.
Enjoy it while it lasts.
Update: Matt Leighty with the Virginia Hospital and Healthcare Association offers a gloomier long-term prognosis than the House. Click on “comments” below to read his commentary.
