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TribBlog: The 2.5 Percent Solution [Updated]

As expected, state leaders are asking state agencies to cut their current budgets even more. This time, by 2.5 percent.

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As expected, state leaders are asking state agencies to cut their current budgets by 2.5 percent, saying the state's sales tax receipts are improving, but not fast enough to make the budget balance by the end of the fiscal year next August.

In their letter, the governor, lieutenant governor and speaker of the House thank the agencies for 5 percent cuts they submitted earlier, and say it will take more on top of that.

The fiscal year ends August 31. Lawmakers will convene next month to write a budget for the two years that start then. They will also have to pass a supplemental appropriations bill that, along with the cuts ordered in today's letter, will be needed to make the current budget balance.

Update (3:46 p.m.):
As a result of this request for cuts, the state's Health and Human Services Commission will cut what it pays to service providers of Medicaid and Children's Health Insurance Program, or CHIP. According to a spokeswoman, the agency will cut rates for acute care services by 1 percent, and rates for nursing facilities and home and community-based services by 2 percent. The cuts take effect February 1. Together, agency officials say, those cuts will save $42 million in the current fiscal year.

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