Additional discussions are needed about whether to spend or save between $127 million and $130 million in enhanced Medicaid funding Mississippi seems likely to receive for fiscal year 2011 after Gov. Barbour formally requests the funds recently provided by congressional action.

In the same appropriations bill, Congress also provided almost $98 million for Mississippi’s local school districts to help them offset teachers lost to funding cuts in the recession-related state revenue squeeze. Medicaid funds play into the school funding situation because extra federal money for the state’s Medicaid health care program for the needy would free some state-generated tax funds for public schools, universities, mental health care and other needs.

The two appropriations are part of a $26 billion federal bill passed in August providing Medicaid funds nationwide and school funds for every state – usually described as a partial extension of the economic stimulus.

States like Mississippi (despite protests by some politicians who ended up spending and making recommendations for spending the stimulus) desperately needed the federal assistance to maintain a reasonable level of state services and commitments.

Barbour’s spokesman, Dan Turner, said Wednesday afternoon that the governor would write the required letter to Health and Human Services Secretary Kathleen Sibelius requesting the Medicaid money.

Barbour has no direct control over the nearly $98 million for local schools, but he can urge districts not to spend it until the 2012 budget cycle.

Despite declarations by House and Senate leaders and Barbour that the Medicaid portion of the extra funds will be saved for the 2012 budget cycle, some legislators, some school leaders and school advocates want more latitude with the funds than setting the whole amount aside.

Rep. Steve Holland, D-Plantersville, suggests a reasonable and appropriate forum for further discussions: Legislative Budget Committee hearings begin in about two weeks, centering on the 2012 budget, which will be dealt with in the 2011 legislative session.

No one reasonably disagrees with Barbour and others who cite the even worse budget situation Mississippi faces in fiscal year 2012 – when federal stimulus funds will end and the state faces a projected $600 million shortfall. Mississippi cannot have deficit spending, so it must reduce spending or raise taxes.

Holland, a veteran of complex budget disagreements and negotiations, hopes a “happy hunting ground” compromise can be found to meet pressing needs like dropping Medicaid clients, cutting teachers and professors, and underfunding mental health care. Many others passionately share those concerns.

Holland said he hopes for a “meeting of minds” on the issue, and we believe that is a reasonable goal.