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Federal Funds: Senate GOP Proposes Paying Back Pension Funds, Shoring Up Public Safety, and Stabilizing Medicaid Providers

State Capitol, Oklahoma City – Republicans in the state Senate announced a proposal for the use of $216 million in federal aid coming to Oklahoma as a result of President Bush’s historic tax relief and job growth package.

“The Senate Republican plan ensures these funds will be used wisely instead of being wasted on government pork or on the pet projects of Democrat legislators,” stated Senate Republican Leader James A. Williamson, R-Tulsa.

Under Bush’s tax cut plan, Oklahoma will receive approximately $99 million in additional federal funding for Medicaid, a joint federal/state health care program for the poor, and $117 million in flexible funds for Oklahoma to use on other state government programs. The flexible funds should arrive in Oklahoma in two payments to the state: one in July, and another in October.

The GOP plan proposes directing the new federal Medicaid funds to be used to restore Medicaid reimbursement rate cuts to health care providers. Most health care providers lose money on services provided under the current Medicaid payment schedule.

Of the $117 million in flexible federal funds, Republicans say $70 million should be used to immediately pay back money borrowed from the firefighters, police, and law enforcement pension funds to help cover the FY04 state budget. Since the funds were set to be paid back over several years with interest, the state would save millions by paying it back immediately.

$7 million of the flexible federal dollars would be used to shore up the Department of Public Safety, allowing the repeal of the unpopular $2 tag fee increase passed in the closing hours of the legislative session. Funding should also go to the Department of Corrections to prevent the early release of criminals, Senate Republicans said, and any leftover funds should be used for one-time capital expenditures or saved for future emergencies, not used for recurring expenses.

“Borrowing money from the pension funds to meet next year’s budget was a measure of last resort to stop the Democrats’ proposed job-killing tax increases. With this new federal money, we can pay back these pension funds immediately and still avoid a tax increase,” Williamson said.

“There is a building Medicaid crisis building in Oklahoma, and we risk having health care providers withdraw from the program if we don’t address the state’s inadequate Medicaid reimbursement rates,” stated Senator Scott Pruitt, R-Broken Arrow, Assistant Republican Floor Leader.

“Public safety is the state government’s foremost obligation to its citizens, and our plan makes sure a significant portion of this new federal money goes to keeping state troopers on patrol and ensuring dangerous criminals remain behind bars,” said Senator Glenn Coffee, R-Oklahoma City, Assistant Republican Floor Leader.


MEDICAID MATCHING FUNDS: $99 million (estimate)

- Restore cuts to health provider payment rates

FLEXIBLE FUNDS: $117 million (estimate)

- $70 million to pay back firefighters, law enforcement, and police pension funds.
- $7 million to DPS (plus repeal of 2003 tag fee increase).
- Additional funds to Corrections, one-time capital expenditures, and to save for future emergencies.

Contact info
James A. Williamson Senate Republican Floor Leader (405) 521-5624