The Wisconsin Supreme Court ruled Tuesday that the state must pay back the $200 million (plus interest) transferred from the medical malpractice fund to help balance the 2007-09 budget. A July 20th Wisconsin Budget Project blog post explains that cutting that amount of state funding out of Medicaid and BadgerCare Plus would also require cutting roughly $375 million this year in federal matching funds.
At this point there are no painless solutions for rebalancing the state budget, but during a deep recession the state should exhaust all other options before weakening programs that provide such a vital lifeline for struggling families, the elderly and people with disabilities. And in times like these, policymakers should strive to avoid cutting spending that puts so much federal matching funding into circulation in the Wisconsin economy.