‘Why are they so bad at money?’: Jake and Spike react to CHIP accounting error that could cost WA up to $654M

Washington could be on the hook for hundreds of millions of dollars after the state reportedly spent years misreporting what it paid to cover children’s health insurance. KIRO host Jake Skorheim sees the mistake as part of a bigger problem with how the state handles money.

“Why are they so bad at money? Why are Washington politicians so bad at money?” Jake said on “The Jake and Spike Show” on KIRO Newsradio.

For five years, starting in 2020, the state Health Care Authority told the federal government it was spending less on the Children’s Health Insurance Program (CHIP) than it actually was, according to Axios Seattle.

The program insures kids in families that don’t qualify for Medicaid but still need help paying for coverage.

Those lower numbers led federal officials to cut Washington’s annual CHIP allotment almost in half, from about $250 million to about $133 million, based on estimates from state Senate staff, according to Axios Seattle. The state, however, continued pulling down enough federal money to pay its real costs. As a result, Washington now owes back overpayments and could come up short on future funding.

State Senate staff, who are nonpartisan, put the potential cost at as much as $654 million through 2031, according to Axios Seattle. The Health Care Authority argues that number is too high, in part because federal funding levels are reset every year. The agency expects a shortfall of about $54 million for the current fiscal year.

“We might be only $100 million in the stupid. Not a half a billion in the stupid,” Spike said.

The Legislature may have to set aside roughly $100 million in its next two-year budget to cover the gap, state Sen. June Robinson, who leads budget writing in the Senate, told Axios Seattle.

Ferguson sees ‘light at the end of the tunnel’

Jake pointed out that the state still faces a budget deficit. He played a clip of Washington Gov. Bob Ferguson after voters rejected Initiative 645, which kept the state’s millionaires’ tax in place.

“We still very much have a very real short-term, think two-year budget challenge,” Ferguson said. “The good news is, looking a bit more long-term from 2029 moving forward, the light at the end of the tunnel is not a train coming at us, but a true light at the end of the tunnel that we get to fiscal stability in 2029 for sure.”

Spike couldn’t resist a joke about the state’s transportation projects.

“The good news is it’s not a train because if it was a train, it would be three times over budget and 20 years late,” Spike said.

‘They’re just bad at spending’

Spike acknowledged the state’s pattern of accounting errors and overestimating revenue. Jake argued the problem runs deeper.

“But it’s not just accounting errors; they’re just bad at spending,” Jake said.

Spike agreed.

“They spend way too much, and we all can agree on that. We have to be more fiscally responsible,” Spike said.

Jake pointed out that only former governors seem willing to call for spending cuts.

“So when they still have the job, and it’s still required that they have to bow down to all the special interests who get them elected, they don’t ever talk about the overspending,” Jake said.

Spike credited Ferguson for one change. As Spike understands it, the governor plans to base his December budget proposal on a more realistic 3.3% growth projection, rather than the 4.3% that previous administrations used.

Jake asked what happens if a court strikes down the millionaires’ tax.

“What they’re not going to do is cut spending,” Jake said. “They could have cut spending already, but they didn’t. They raised taxes.”

The ‘cut’ that wasn’t

The hosts revisited a familiar disagreement. Spike pointed to $7 billion that he believes was cut from the state budget, because spending was projected to rise by $16 billion but rose by $9 billion instead.

Jake wasn’t buying it.

“You can’t explain to me how an increase is a cut,” Jake said.

Spike, noting that Jake was nursing a sore throat, called a truce.

“We’ve done this dance a few times,” Spike said.

Watch the full discussion in the video above.

Listen to “The Jake and Spike Show” weekdays from noon to 3 p.m. on KIRO Newsradio 97.3