Gov. Jindal proposes $24 billion budget for La., cutting health care, social services

La. gov proposes $24 billion budget

BATON ROUGE, La. — Gov. Bobby Jindal proposed a $24.2 billion budget Friday that cuts health care services and government jobs, spares college campuses and uses a patchwork of one-time funding to close a billion-dollar state revenue gap.

The release of the governor’s spending plan for the 2010-11 fiscal year that begins July 1 is the starting point for budget negotiations that will continue through the three-month legislative session that starts March 29. Lawmakers will begin reviewing the proposal next week.

“We’re submitting a balanced, fiscally responsible budget,” Jindal said.

Among the reductions, Jindal proposes eliminating nearly 3,000 state government jobs. That could force layoffs for 1,000 workers, while more than half the jobs aren’t currently filled. Budget cuts would hit social services, mental health care and education programs outside the funding formula for public school districts. Nearly every agency would take a reduction.

The state’s Medicaid program for the poor, elderly and disabled would receive the biggest hit, getting a $6.2 billion budget, a loss of about $300 million. A third of that cut would fall on the hospitals, nursing homes and other private health providers that care for Medicaid patients, said Health and Hospitals Secretary Alan Levine.

John Matessino, president of the Louisiana Hospital Association, said community hospitals already are struggling with several rounds of budget cuts that have hospitals considering whether they should cut back on the services they provide to Medicaid patients. More cuts could worsen access for those patients, he said.

“There’s no such thing as a moderate cut anymore. You start slicing your hand over and over again, and sooner or later you’re going to bleed to death. This is getting to be very, very serious,” he said.

Levine noted that even with the cuts, Medicaid spending would remain nearly 19 percent larger than six years earlier, before Hurricane Katrina struck and pumped hurricane recovery dollars into the state’s coffers.

Meanwhile, elementary and secondary education would lose $214 million, though the $3.3 billion public school funding formula wouldn’t lose any dollars. The formula also wouldn’t get an annual increase that had been built into it for most of the last decade.

Jindal’s budget proposal is an 18 percent drop from the current year’s $29.4 billion budget, but more than $3 billion of the reduction is due to a loss of one-time federal hurricane recovery money tied to hurricanes Katrina and Rita, not budget cuts.

The budget proposal contains shallower cuts than many lawmakers had predicted. About $1 billion in federal stimulus money would prop up several agencies, and the governor proposes using tax amnesty and surplus dollars to help fill gaps in lost federal health care funds.

College campuses would be protected, left to cope with three budget cuts they’ve taken over the last year and a half but kept from any further slashing. Jindal said he wanted to preserve the current state funding to the schools while the state embarks on a restructuring of Louisiana’s college systems.

“We thought it was important to give higher education time to make changes that we are demanding,” Jindal said.

College leaders thanked the governor for the budgetary reprieve, and Commissioner of Higher Education Sally Clausen said the next year would be used for schools to retool.

“We are very appreciative to Gov. Jindal for recognizing the pain that higher education has endured during the past year, and we are most grateful for his efforts to protect us from future cuts,” said LSU Chancellor Michael Martin.

University system management boards, however, would lose $5 million, or 27 percent, of their state funding, under the governor’s plan.

Besides the loss of federal dollars, Louisiana’s state revenue is projected to drop by $1 billion next year, tied to the subsidence of the post-hurricane recovery boom, national economic woes, a drop in the prices of oil and gas from which the state derives tax and royalty income, and an array of tax breaks approved by lawmakers in recent years.

Under the governor’s spending plan, 31 percent of the budget would pay for health services, 30 percent for education and 14 percent for hurricane protection and emergency preparedness, according to Commissioner of Administration Angele Davis, the governor’s chief budget architect.

Louisiana’s budget could get further relief from Congress, which is debating an extension of certain portions of the expiring federal stimulus law that would include hundreds of millions of dollars in federal money for the state Medicaid program.

If such federal relief comes through, Jindal said he’ll propose holding onto the tax amnesty and surplus money for a year later, when the state’s budget problems are projected to grow worse.