Look out for Medicaid!

Although state tax collections are on the rise,
and have returned to 2008 levels in many places, education advocates
shouldn’t kid themselves that the “new normal” of flat budgets and tough
resource allocation decisions will soon come to an end. Spending on
health care entitlements continues to grow rapidly,
according to the National Association of State Budget Officers’ most
recent report, while K-12 education loses ground as a share of state
budgets.

The education reform community needs to think beyond the next levy
referendum when it comes to providing resources to our schools. Health
care reform — specifically, containing the cost of entitlements like
Medicare and Medicaid — has become a major issue impacting American
schools. While a few forward-thinking groups like the Massachusetts Business Alliance for Education have grasped this and become active on health care policy in their state capitals, it’s not on most people’s agendas.

Yet the simple arithmetic is unavoidable: Medicaid can’t continue to
grow faster than the long-term growth rate of the economy without
sucking up more and more of state budgets. Education aid necessarily
suffers under any scenario where government continues to pay for rapid,
unchecked increases in entitlement spending.

The political reality is equally stark: The AARP and other lobbying
groups for recipients of state-financed medical care are very good at
protecting these entitlements, and deficit hawks usually form a lonely
minority in opposing their demands. Bipartisan reform efforts are beginning to emerge
at the federal level, but they won’t get far if no one makes the case
for spending tax dollars wisely and investing heavily in young people.

— Chris Tessone

Update: Please see Sherman Dorn’s correction below. I regret the error!

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