Friday Roundup: Voters approve transportation spending, a look at Medicaid and drug spending, states rein in budgets

There are always a few items we’ve read during the week that deserve more attention but don’t make it into our regular posts. So we bundle them for the Friday roundup.

Here’s this week’s bundle:

NCSL: Voters Across the Country Say ‘Yes’ to Transportation

Voters across the country approved nearly 200 state or local ballot measures that will increase revenues for transportation infrastructure to the tune of $201 billion.

…The vast majority, and largest, of the transportation ballot measures were at the local or regional level. The city of Los Angeles will see a 1 cent sales tax increase, providing $120 billion for roads and transit over the next 40 years. Voters in the Seattle area approved a $54 billion package to support the Seattle Transit system over the next 25 years.

Washington Research Council: How Medicaid and Prescription Drug Spending Impact the State Budget

Medicaid, through the state Health Care Authority (HCA), now provides health insurance for almost two million Washington state residents, and makes up over 16 percent of the state budget. Historically high prescription drug spending growth across America in 2014 and 2015, driven in part by new, expensive specialty drugs, became a focus of attention in the state Legislature as HCA submitted a substantial supplemental budget request in 2016. However, in the 2015-17 biennial budget, only 2 percent of maintenance level changes came from HCA.

Seventy percent of the drug cost increases nationwide from 2010 to 2015 were from specialty drugs. PricewaterhouseCoopers does not expect specialty drugs nationally to have the same impact in 2017 that occurred in previous years. Hospitalization is still the primary cost driver, consuming about 50 percent of national Medicaid outlays, while prescription drugs are at 17 percent. All states provide drug coverage as part of their Medicaid programs, and therefore cannot limit distribution of a medication when it is deemed medically necessary.

State governments are reining in spending as early signs of an economic slowdown begin to impact revenue levels, according to a new report.

State spending grew by an estimated 4 percent in the fiscal year that ended in July, the National Association of State Budget Officers (NASBO) found, 3 points lower than the previous fiscal year. The drop comes as growth of the two largest sources of state revenues slowed, and as federal money sent to states to bolster the economic recovery and healthcare spending trickled off.

The American Interest: California’s Pension Woes Set To Deepen in 2017

In 2015, California tried to reform CalPERS to address its shortfalls, but they didn’t do nearly enough. The system currently assumes annual returns of 7.5 percent, which is still far too optimistic. So CalPERS plans to revise its expectations downward, which would force governments to kick in more money to meet liabilities. Local government budgets, of course, are already stretched. It isn’t long before they’ll have to ask the state and, potentially, the federal government for a bailout.