This past week the March Caseload forecast was released providing a hit to the state’s budget of $301 million, despite nearly $60 million in savings because fewer people than expected received services from an array of state programs.

The additional $301 million to the state’s budget shortfall means legislators will need to close a budget gap of approximately $1.3 billion for the 2013-15 biennium to balance the budget and maintain current service costs. This does not include additional dollars necessary for basic education that is required by the McCleary decision.

The unanticipated shortfall is primarily the result of a miscalculation of Medicaid savings and some other factors.  The miscalculation is related to a decision by the Legislature in the last budgets to move approximately 90,000 blind and disabled people on Medicaid from a fee-for-service plan to a managed-care plan. Analysts shared that the Legislature had little data to go on when it projected how much money would be saved by switching patients to managed care and the estimates turned out to be wrong.