Budget cuts ahead. (Short Takes).

With state and local government's across the nation confronting mounting budget deficits, the pressure is on to reduce Medicaid, health coverage for state workers and other publicly funded health services.

State Medicaid costs rose by 12-13 percent last year the biggest jump in years; Overall, state spending rose about eight percent. These spending hikes, coupled with a slumping economy that put a damper on tax revenues, have state governments scrambling to find ways to reduce their red ink.

Governors are turning to Washington for assistance. New Jersey Governor James McGreevey, for example, joined forces with a number of unions--the American Federation of County and Municipal Employees, the National Education Association and the AFL-CIO--to urge Congress to at least temporarily increase federal assistance to help states meet the health care needs of the poor.

A study by Family USA, a non-partisan health care consumer group based in Washington, D.C., will add to the pressure to maintain Medicaid spending. It concluded that states were helping, not hurting, their economies by their Medicaid outlays. In Ohio, for instance, the study estimated that every $1 million cut from the Medicaid program would cost the state $3.12 million, both in direct losses of federal matching money and wage and job reductions in health care and other industries.

James A. Hawkins in a health care writer based in Aiken, S.C. He can be reached by phone at [phone] or by e-mail at [e-mail].