AUGUSTA — The state’s top budget official said Tuesday he’s hopeful a weekend letter from President Obama will prompt federal lawmakers to approve more Medicaid funding for the states.

If they don’t, it will mean an $85 million hole in Maine’s budget in fiscal year 2011. Nationwide, states stand to lose $24 billion, according to The Associated Press.

Commissioner Ryan Low, head of the Department of Administrative and Financial Services, said he’s ready to begin recommending cuts to the state budget if the money doesn’t come through.

“If we don’t see positive movement in the next couple of weeks, we’ll begin the curtailment preparation process,” Low said.

Thirty states are counting on the money to keep their budgets in balance, according to the National Conference of State Legislatures.

Maine lawmakers approved the state’s two-year $5.55 billion budget – which banks on receiving the federal money – in March.

In May, the U.S. House of Representatives cut the $24 billion in Medicaid funds from a bill designed to extend jobless benefits. Low said there are other bills pending that could be amended to restore the money.

Obama wrote a letter to congressional leaders Saturday urging them to provide additional money to states through Medicaid.

“Already this year, we have lost 84,000 jobs in state and local governments, a loss that was cushioned by the substantial assistance provided in the Recovery Act,” Obama wrote. “And while state and local governments have already taken difficult steps to balance their budgets, if additional action is not taken, hundreds of thousands of additional jobs could be lost.”

Rep. Emily Cain, D-Orono, House chairwoman of the Legislature’s Appropriations Committee, said she and others have spoken with the state’s congressional delegation about the importance of the federal money.

She said the committee will discuss the topic when it meets June 29.

“You can’t necessarily predict what the Congress will do or will not do,” she said. “I haven’t given up hope.”

Sen. Richard Rosen, R-Bucksport, also a member of the Appropriations Committee, said members insisted the budget require Gov. John Baldacci to begin addressing the shortfall this summer if the funds don’t come in. That way, it won’t end up in the lap of the new governor in January, he said.

The 2011 state fiscal year begins July 1.

“Our concern was that corrective action had to start at the beginning of the fiscal year,” Rosen said.

Specifically, the language in the budget states that if there’s no federal law to provide the funds by July 1, the governor must begin to put in place curtailments that would go into effect no later than Oct. 1.

Low said all state agencies would be asked for ideas on spending cuts to help make up the gap.

“It would be consistent with other curtailments,” he said. “We’d look across state government.”

MaineToday Media State House Reporter Susan Cover can be contacted at  620-7015 or at: scover@centralmaine.com

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