How Much State Fiscal Relief is Enough?

Source: Stan Dorn, Urban Institute, January 15, 2009

From the abstract:
Between increased Medicaid caseloads, rising indigent care costs, and Medicaid’s share of state revenue losses, an economic downturn in the next two and a half years could impose between $74 billion and $118 billion in extra financial burdens on the 50 states, if unemployment averages between 8 and 10 percent. The amount Congress must spend to prevent state service cutbacks and tax increases depends on how fiscal relief is allocated. Basing each state’s funding on objective, economic indicators makes federal dollars go farther towards solving state fiscal woes, since more of the money benefits the states that most need help.

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