Doubt is emerging about anticipated federal funds for Washington.

Washington State’s budget was balanced based on four strategies: (1) Reductions to public services and programs, (2) Transfer of funds to the General Fund, (3) Increases in revenues, and (4) Incorporation of approximately $618 million of approved/anticipated additional federal relief to Washington State.

The 2010 supplemental operating budget anticipated $480 million in additional resources based on the Federal Medical Assistance Percentage (FMAP) enhancement being extended by an additional six months through June  2011.

In addition, based on  U.S. Department of Health and Human Services reversal of the decision to disallow state savings from Medicare Part D “clawback” payments for prescription drugs, the state expected to receive $87 million in additional federal resources beyond the current level assumed in the state budget.

At the time the state budget was signed into law, Congress was considering legislation that would extend the enhancements beyond the current end date, December 2010. Legislation that both the House and Senate had considered before and passed.

However, today states, including Washington, are running into roadblocks with regard to the anticipated funds in Congress.

Last week the U.S. House of Representatives stripped language for a six-month, $23 billion extension. Washington is seeking approximately $480 million of these funds as part of the four-strategy approach to balancing the state’s most recent shortfall (2010).

Without these funds ($480 million) the dollars in reserves ($450 million) planned as a cushion would be eliminated, leaving the state vulnerable to changes in tax revenues.

Governor Gregoire along with 47 other governors, both Democrat and Republican, have asked for the extension. More than 30 states counted on these dollars in their budgets.

The legislation now moves to the Senate where the bill could be taken as soon as after the Memorial Day week long recess.

Stay tuned…