About that $408 million…

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A state official told a legislative panel that $408 million in federal funding lawmakers and Gov. Tim Pawlenty are counting on as part of their budget fix is stuck in congressional limbo. (Watch)

Minnesota Management & Budget Commissioner Tom Hanson said it may be several weeks before Congress passes an expected $408 million extension of enhanced Medicaid match funding. Both the Legislature and the governor have included the money as part of their budget plan. The Legislature is constitutionally required to adjourn this year by May 17.

Hanson said he and other officials learned the information during a conference call earlier today with staff from the National Governors Association. Although NGA staff are “80 percent” sure that the money will eventually be appropriated, Hanson said it is “significantly unlikely” to happen before the Legislature adjourns.

“I think we’re faced with a fluid situation in Washington, D.C.,” he said.

Congress is expected to go into recess May 29, and it is possible the legislation may be acted on before that date, Hanson said; however, he suggested lawmakers and the governor develop a backup plan.

“We need to begin a dialogue back and forth about the level of risk we want to take going forward as we prepare our budget in the last few weeks,” Hanson said.

Hanson said the state budget is expected to be short $536 million in the current biennium. Assuming the state will eventually get the $408 million in federal funding, he suggested lawmakers deal with the remaining $128 million problem first. After that, the state will need some kind of plan to “manage the risk of that money not coming,” he said.

Hanson made his remarks to members of the Legislative Commission on Planning and Fiscal Policy’s Subcommittee on a Balanced Budget. No action was taken.