LANSING ? Gov. Jennifer Granholm and other state officials spent much of Thursday trying to help convince the U.S. Senate to approve legislation that would extend Medicaid funding, and stave off the potential for a “devastating” loss of some $500 million in anticipated revenues for the 2010-11 budget.

On her own and with her fellow governors, Granholm has been trying to get the U.S. Senate, particularly Republican members of the chamber, to understand the potential impact failure to approve the extension of the Federal Medicaid Assistance Percentages could mean to Michigan and other states.

“There is no question we are staring devastating cuts in the face” if the measure does not pass, Liz Boyd, Granholm’s spokesperson, said Thursday.

The proposed 2010-11 budget, and all the budget bills passed thus far, anticipate some $500 million in federal FMAP funding for extending the program past June.

It was unclear late Thursday if the legislation extending the program, which is tied up in legislation to extend jobless benefits, would pass. But officials were grim about the possible prospects.

Senate Majority Leader Mike Bishop (R-Rochester) however told reporters that he had been preparing for the chance the proposal would fail.

He said he would present a series of proposed cuts to his caucus on Tuesday. While he would not specify where those cuts would come from he said they would be spread over a number of departments.

With the likelihood that FMAP funding may not be approved, Mr. Bishop also said it meant the Legislature would work during the summer to complete the budget.

Nationwide, governors, including Republican governors, have been in a near panic over the possibility the FMAP funds may not pass. The vast majority of states calculated the funding into their budgets, and since most state fiscal years begin on July 1, the loss of the funding could cause major revisions to those budgets. Officials in Massachusetts said it could mean cuts of more than $600 million. In Virginia, with a newly elected Republican governor, it could mean cuts of as much as $450 million. In Arizona, the state’s largest newspaper, the Arizona Republic warned it could mean a cut of $389 million, or nearly 4 percent, of its total budget.

Should the state be forced to reconfigure its budget, Boyd said, “We’re talking about the type of cuts to programs that are the most important to people: mental health programs, prescription drugs, revenue sharing.”

Bishop said what he didn’t like about the program was that it was essentially a mandate that forced the state to come with funding on its own to meet the program’s requirements. When relying on a mandate, the chance the funds could be lost always has to be considered, he said.

But Boyd said Bishop included the expectation of the funding in the budget proposal he put forward last week.

And she said Granholm has talked with him about the potential impact of the loss of the funding and “that the cuts would be devastating.”

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