WASHINGTON – In June, the National Governors Association (NGA) sent a letter to Sens. Susan Collins (R-Me.) and Ben Nelson (D-Neb.) expressing governors’ support for the fiscal relief package introduced by the senators which would provide states with $8.9 billion during the current economic crisis being witnessed throughout the country. The bill, S-2570, provides $4.5 billion to states through an increase in the Federal Medical Assistance Percentage of Medicaid and an additional $4.4 billion to states in health and social services relief grants. The FMAP provisions would be in effect for 18 months starting April 2002 and expiring in September 2003. In his letter on behalf of NGA, association Chairman Michigan Gov. John Engler wrote, “The budget situation for states continues to be dire. Due to the economic downturn, many governors instituted dramatic cost-cutting measures and program cuts that historically have been avoided at all costs. Unfortunately, the current fiscal crisis is of such magnitude that cuts in health, social services and even education are all on the table without immediate assistance from the federal government. Collins/Nelson offers states the best hope for fiscal relief so that we may reduce the need for additional program cuts now and in the future.” NGA Vice Chairman Kentucky Gov. Paul Patton said many governors have already exhausted both traditional cost-cutting measures and more extreme measures such as layoffs, across the board program cuts and utilization of rainy day and tobacco settlement funds. “As recent economic indicators have demonstrated, our hopes for a rapid economic recovery have not materialized. Without immediate fiscal relief, the cuts necessary to close these budget gaps will have profound effects on our nation’s children and the programs which serve our most needy populations.”

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