It is basic public policy that you either have to raise taxes or reduce government services. It has become a cardinal sin in Republican politics to even say the word tax much less enact any increase in revenue. Our legislature is now overwhelmingly Republican and they are real Republicans. They take their no new tax pledge seriously as does our Republican governor. Therefore, when the dicing and crafting of the 2013 budget was being processed, new revenue enhancement measures were not on the table. It is doubtful that you will see any tax increase proposals anytime soon in the Heart of Dixie.

The state’s new budget year begins this week. It will be horrendous. There are draconian cuts to basic state services. Alabama has a constitutional amendment that mandates a balanced budget. We are in dire straits but at least we are not deficit spending like other states. California is teetering on bankruptcy.

This past year’s budget was bad. Teachers and state employees pay was cut this time last year. However, if you think that last year was bad, you ain’t seen nothing yet. This is the year that the chickens have finally come home to roost. The federal stimulus manna from Heaven has provided a lifeline salvation for several years but those dollars are gone. This fiscal year may well be the worst dilemma since the Great Depression.

My contention is that it is worse than the Depression years. During that era the state provided fewer services. They had roads, prisons and the highway patrol but new burgeoning programs, which began during the Lyndon Johnson Great Society years, did not exist. The Medicaid program was nonexistent.

Today, Medicaid accounts for an amazing 35% of the state’s General Fund Budget. Most state lawmakers point to this joint state/federal program as the obvious elephant in the room when it comes to making ends meet. It is a money eating monster. However, what do you do when this monster is being fed by a carrot from our good Uncle Sam who does not worry about deficits? The state gets over a two dollar match from the federal government for every one dollar spent.

In case you think that this program is a welfare program think again. Chances are your Aunt Susie’s nursing home expenses are being paid by the Alabama Medicaid program. Currently, over 70% of all nursing home patients in Alabama are on Medicaid.

Tough times call for solutions to problems. Many experts point to an obvious remedy for Medicaid. Many Alabamians could stay out of nursing homes if more of an effort was made to provide at home services for older Alabamians. Home care is not only cost efficient, it is the preferred route for senior citizens. Alabama’s Medicaid program spent $900 million on nursing home care in 2011. The average cost to the state for a nursing home patient is $55,000 per year. The cost for people receiving at home services is $11,000.

Most states are implementing a Medicaid component known as the elderly and disabled waiver program. This program helps people with bathroom, cooking and other tasks in an effort to prevent or at least postpone a move to a nursing home. There are at least 10,000 Alabamians on a waiting list to enroll in this at home service program. We are lagging woefully behind other states in getting our folks into this mode of care. According to a national AARP report last year, Alabama’s Medicaid program relies much more heavily than most states on nursing homes. In fact, the AARP ranked Alabama’s long term care services 50th in the country.

There is an inevitable crossroads that Alabama is facing when it comes to Medicaid. It will only become more acute as our population continues to age. At home care appears to be one obvious solution.

One thing is for certain, Medicaid will continue to be problem number one when it comes to balancing Alabama’s budget. It is uncertain whether cuts to services or operations or implementation of logical and cost saving measures like home health care in lieu of nursing home care will be enough. Other frequently mentioned revenue solutions are an increase in the cigarette tax, a state lottery or both.

See you next week.