The Senate voted overwhelmingly April 22 to pass two measures intended to ensure that Arizona will be able to collect federal stimulus money for Medicaid programs and to extend unemployment benefits for an additional 13-20 weeks.

The first bill, S1102, would change the frequency of determining the Medicaid eligibility of childless adults to every year instead of every six months. It passed on a vote of 24-to-4, giving it the support of a supermajority of lawmakers and allowing it to advance with an emergency clause. All minority members on the floor joined a majority of Republicans to support the measure.

The second bill, S1322, would amend the state's unemployment benefits laws so that jobless Arizonans who are about to exhaust their regular benefits will continue to get them for 13 to 20 additional weeks. Senators voted 27-1 to pass the bill, also with an emergency clause.

The next stop for both bills is the House, where they also need to pass with a two-thirds vote. The House is expected to vote on the bills on April 23.

By making the change to the Medicaid eligibility requirements, Arizona lawmakers expect that they will satisfy a maintenance-of-effort requirement included in the stimulus package. The federal Centers for Medicare and Medicaid Services had determined Arizona is in violation of a requirement because the state made its Medicaid eligibility "standards, methodologies or procedures" more restrictive than those in place on July 1, 2008.

The violation was a result of a law passed in June that requires Arizona to determine the eligibility of Medicaid recipients every six months, instead of once per year.

Dissenters in the Senate argued that by passing particularly the bill dealing with the frequency of Medicaid determination, Arizona is allowing the federal government to run the state as its "subordinate." They also complained that the legislation did not contain a trigger mechanism so Medicaid eligibility is determined back to every six months when the federal money runs out.

Other conservative members said they also dislike the bill, but pointed out that without the statutory change, Arizona risks losing out on the $1.7 billion in Medicaid money available to the state under the American Recovery and Reinvestment Act.

"In a vacuum, I wouldn't support this bill," said Senate Majority Leader Chuck Gray. "But we are not in a vacuum. We are in the realities of life… and so in an effort to avoid bankruptcy of the state and to draw down those federal dollars, I am going to vote ‘aye'."

Sen. Thayer Verschoor, a vocal critic of the federal government, said losing the federal dollars would put the state in "one heck of a bind," he said.

"I find this distasteful," the Gilbert Republican said. "(But) I find raising taxes here in Arizona even more distasteful."

Sen. Barbara Leff, chairwoman of the Commerce and Economic Development committee and one of the bills' strongest supporters, said if the state did not do the statutory change, it would jeopardize more than $1 billion that would help pay for health care of people enrolled in the state's Arizona Health Care Cost Containment System.

"It makes no sense to give up $1.6 billion clearly of our own money that we send to Washington," she said.

Sen. Ron Gould, a Lake Havasu Republican, voted against the measure.

Gould said what the Obama administration is trying to get Arizona to do is go back to giving welfare to people that no longer qualify for it.

"We are allowing the federal government to run us merely as their subordinates. They are going to tell us what to do," Gould said. 

Sen. Russell Pearce, the chairman of the Appropriations Committee, complained the lack of a trigger mechanism in the bill that would reinstitute the six-month eligibility determination at some point in the future.

"Nothing seems temporary down here," he complained.

Prior to receiving notice that it was out of compliance, Arizona had assured the federal government it meets the requirements of the stimulus act and applied for an initial disbursement of $286 million in Medicaid money, which was just the first portion of about $1.7 billion available to the state under the stimulus package. The state received the money last month.

Without meeting the requirements of the stimulus law, Arizona won't qualify for the rest of the money. On top of that, Arizona also risks paying a $6,400 per day penalty or about 0.8 percent in interest on the initial money that the state received.

Meanwhile, Gould was the lone dissenter on the bill to extend unemployment benefits.

Arizona, who relies heavily on housing construction for economic development, was one of the states hit hardest by the housing meltdown.

Arizona's unemployment rate has reached the highest level in 25 years, according to jobless figures released earlier this month. In March, unemployment hit 7.8 percent, according to the Bureau of Labor Statistics.

Timing is critical because the extended employment benefits program lasts only until the end of the year. The sooner the states makes the necessary changes to its existing unemployment benefits laws, the sooner out-of-work Arizonans will qualify for the benefits.

Under existing arrangements, the federal government and states share the cost of the extended unemployment benefits program. The stimulus law amended it to require the federal government to pay 100 percent of the cost, instead of the usual 50 percent.