State Health Department Budget Cut During the Revenue Shortfall

¶ … Health Department Budget Cut during the Revenue Shortfall

Yersey Yersinian, State Governor

FROM: Curtis Healy, Health Commissioner

Cutting Budgets during the Times of Revenue Shortfall

Our current fiscal budget has revealed that we have already run short of our project revenue and the issue requires immediate attention. In the present fiscal year, we are facing challenges of raising tax revenue for the projected fiscal year. By consequence, the tax revenue projected for the fiscal year between July and June is short of $30 Million. While the fiscal year has nearly run into half, the shortfall could increase by 7% if immediately solution has not been implemented to arrest the situation. The immediate problem that we are facing is the strategy we could adopt to raise up to $60 Million within six months. The solution is not to raise the government fees or taxes because implementing these policies will make us contradicting our promises that we have made few years ago. While an increase in the government borrowing may be politically feasible, however, we use this tool to criticize our predecessors and this option will not be appropriate as the best option. The only solution to raise the funds is to cut programs . We need to critically evaluate all the programs by choosing the programs that are less important and remove them from the list of all our funded program. The strategy will assist us to cut our expenses in order to effectively implement the remaining programs.

Approach and Framework for dealing Budget Cut

One of the approaches that we will employ in implementing the budget cuts is to list all the state programs and rank them based on their scale of preferences. We should list the most important programs first and rate them based on their level of importance to the public. The programs at the end of the scale of preference will be removed in order to raise the saving required to implement state health department program. Although, there was a suggestion that the state Health department is to reduce the agency budget by $2.3 Million, nevertheless, cutting expenses of the Medicaid program is not an option. Although, Medicaid takes 20% from state health department expenditure, nevertheless, the expenditure of the Medicaid cannot be reduced. While the Medicaid is the federal and state program, however, the state receives $2 from every one dollar spent on the program. If we decide to cut $1 Million from the Medicaid expenses, we will lose $2 Million of the federal government Medicaid allocation.

Moreover, we should not cut the expenditure on capital program. It is essential to realize that capital expenditures are very hard to reduce. By consequence, the builders may not be interested in bidding for the state projects if there is an anticipation that we are going to reduce the expenditure capital programs, the bidders would not be interested in bidding for our project.

The feasible option is to cut our expenditure on the non-capital program. Although, one of the governor's advisers suggests that the governor should layoff some workers in order to reduce the expenses of the health state department, however, this option is not a feasible option because the state governor can draw a bad image from this policy. Moreover, the option can lead to a legal issue which can make us incur additional legal expenses.

Proposed Specific Budget Reductions

I suggest that we need to reduce the expenses of the WIC (Women, Infants, Children) program. The state spends approximately $2 million on the program, and the program is being supported by the state, thus, we will need to reduce expenses of the WIC program. Additionally, I suggest that we reduce the utility expenses that include expenses on equipment, furniture, and supplies. We will save approximately $2 Million from the cutting of expenses on this programs. Moreover, we should cut the expenses of approximately $100,000 spent on the state detective hired to detect fraud in the health department. More importantly, we need to cut our nursing and hospital home inspection program expenses. The expenditure on this program is approximately $4 million and only $500,000 is recovered from the program. Moreover, the program on food safety and inspection regulation is supported by the state revenue. We need to reduce our expenses on this program to raise savings.

Moreover, we will need to cut expenses on the health promotion and education program, which is approximately $3 million from the state tax revenue expenses. After cutting all these expenses, we are required to implement a policy to cut $1,415,000 out of the original $1.5 million. We also need to cut $150,000 of the marketing program, which is the expenditure on the state tax revenue. Moreover, we will need to cut the expenses of the miscellaneous program which is approximately $650,000. Moreover, we will need to cut the "First Lady's State Autism Project" expenses (Grum, 2014 p 39). After we have adjusted the expenses on budget program, we will be left with the $15,310,000. However, we can still get $2 million out of the vulnerable budget.

We can also reduce the expenses on a red tape. For example we could reduce expenses on mandatory inspection, outside consultancy and lodging fees. All these cut can assist us to save about $70,000. Moreover, we can save $20,000 by cutting expenses on furniture and equipment delay. We will realize $90,000 from this option. We could also save $300,000 by reducing the expenses on health promotion program. It is essential to realize that we are spending a lot on health promotion program, which include the billboard, TV promotion, anti-tobacco promotion as well as other promotions. We could also save $10,000 by reducing expenses on food safety inspection program. More importantly, we could record a saving of $250,000 by canceling new expenses on GIS (Geographical Information System) equipment. We will also need to "terminate migrant health clinic marketing program," this will make us realizing a saving of $75,000. (Grum, 2014 p 39). We could also realize additional saving of $60,000 by deleting the primary care program and communicable disease program. We should be able to realize $40,000 saving by terminating the " education program for training rural dental hygienists." (Grum,2014 p 42).