NASBO held its 2013 Spring Meeting April 25-27 in New Mexico. The convening provided budget officers from across the country an opportunity to hear directly from a number of leading experts on current issues affecting state fiscal conditions. Below is a brief summary of the presentations made during the meeting. NASBO members with individual user accounts can now access all speaker presentations under the NASBO Member Content tab on the “Past Meeting Presentations” page.
Comments from Attendees:
“Always great information and given in an interesting manner.”
“Issues raised were good and apply across states.”
NATIONAL ECONOMIC UPDATE
Sara Johnson, Senior Research Director, Global Economics with IHS Global Insight, provided an update on the U.S. economic outlook, noting that the economy’s fundamentals are improving but also that fiscal policy headwinds will restrain near-term growth. Real GDP growth is forecasted to increase from 2 percent this year to 2.8 percent in 2014, with the upside and downside risks evenly balanced. The most likely outcome for the economy is moderate economic growth, according to Ms. Johnson.
NEXT STEPS FOR TANF AND THE IMPACT ON STATE BUDGETS
George Sheldon, Acting Assistant Secretary, Administration for Children & Families, U.S. Department of Health & Human Services,discussed key social service programs important to states. Topics discussed included foster care, Temporary Assistance for Needy Families (TANF), the President’s budget proposal for his new “Preschool for All” initiative, and federal funds to upgrade eligibility systems including integrating human service programs. Mr. Sheldon also indicted interest in working with states to increase flexibility and discussed states seeking waivers in foster care.
FEDERAL BUDGET UPDATE: HOW SIGNIFICANT ARE FUTURE CUTS?
Marcia Howard, Executive Director with Federal Funds Information for States (FFIS) described the federal fiscal outlook for fiscal 2014 and beyond. She compared the budget plans proposed by the President, House, and Senate and examined the savings achieved by each blueprint relative to the Congressional Budget Office (CBO) baseline and current law. Ms. Howard also explained major policy proposals in the House, Senate, and the Administration regarding health care, other mandatory spending, discretionary spending, revenue, and the sequester. Key themes in the President's fiscal 2014 budget continue from prior years with more emphasis on competitive grants and consolidating funding streams.
IMPLEMENTING THE AFFORDABLE CARE ACT: CHALLENGES AND COSTS, MEDICAID EXPANSION AND BEYOND
Tom Betlach, Director, Arizona Health Care Cost Containment System and Brent Earnest, Deputy Secretary, New Mexico Human Services Department, provided an overview of Medicaid and the Affordable Care Act implementation in their respective states. Mr. Betlach also covered Medicaid growth and enrollment nationally, and discussed the significant cost drivers and questions budget directors may have regarding Affordable Care Act implementation and its impact on state budgets. Mr. Earnest reviewed the Medicaid program in New Mexico and the costs, savings, and budgetary impact from expanding Medicaid under the Affordable Care Act. Other requirements under the Affordable Care Act were reviewed including new eligibility rules as well as New Mexico’s approach to setting up its state-based exchange.
REVENUE AND FORECASTING ISSUES
Thomas Clifford, Secretary of Finance, New Mexico Department of Finance & Administration, Helen Hecht, Chief Counsel, Federation of Tax Administrators and Richard Anklam, President & Executive Director, New Mexico Tax Research Institute, providedan overview of New Mexico’s experience in promoting economic development through tax reform. An overriding premise was if spending growth is held at a sustainable rate, surplus revenue is adequate to achieve substantive tax reform. The session reviewed recent New Mexico tax reforms including tax incentive changes and corporate income tax modernization.