All but a handful of states are bringing in revenues as they expected. But spending continues to grow, this year by 6.6 percent. The reason? If you've read this far, you probably already know -- Medicaid, which the groups estimate will grow in cost by 17 percent this year.
17 percent. That's on top of huge surges over the last decade.
Other big spending categories, such as education, also continue to rise in cost well above the general level of inflation. The reason this is important is that people who agitate against taxes often argue that state spending increases should be limited to inflation and the growth in population. That would be fine, if states could do all their shopping at Wal-Mart.
As things stand, states have tastes that are increasingly expensive. As long as overall health care costs continue to rise so much faster than the rest of the economy, the choice is either to cut Medicaid substantially or raise taxes. Simply declaring that states should limit themselves to last year's spending rates just won't cut it.
