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VOL. 37 | NO. 4 | Friday, January 25, 2013

No Medicaid decision in Haslam budget address

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NASHVILLE (AP) - Republican Gov. Bill Haslam said his annual State of the State address on Monday won't include a decision on whether Tennessee should expand eligibility to Medicaid.

Under health care law, the federal government would pay 100 percent of cost increases for the expansion in the first three years and 90 percent thereafter. But the Republican-dominated Legislature is skeptical of most facets of President Barack Obama's health care law.

The governor said in a preview of his speech that the state's $32 billion spending plan will begin to feel the pressure of increased Medicaid costs because several provisions of the new health care law go into effect in January 2014, or halfway through the upcoming budget year. But Haslam stressed that Tennessee's finances have remained strong despite the economic downturn.

"The message you'll hear from me is about why Tennessee is different," he said.

Haslam said Tennessee has been a mong only a small number of states that hasn't cut K-12 education spending in the last two years while also cutting a variety of taxes.

Haslam said he will also announce "significant" spending on construction and maintenance at state colleges and universities.

"We're making up for some lost ground there," he said.

The governor also plans a large deposit in the state's cash reserves known as the rainy day fund. The fund was drawn down from about $750 million to about $257 million. About $100 million has been restored to the fund over the last two years.