Gov. Bobby Jindal will present legislators with a $24.7 billion proposed state operating budget Friday that hinges on what the governor characterized as money-saving partnerships.
The spending plan for the fiscal year that starts July 1 banks on savings materializing from the privatization of public hospital operations.
Public-private partnerships already are planned for the operations of LSU hospitals in New Orleans, Lafayette and Houma, as well as the $1.1 billion academic medical center in New Orleans, which is under construction.
Jindal previewed the budget for the media Thursday at the Governor’s Mansion.
“We think this is a good budget, a responsible budget,” he said.
The state faces a $1.3 billion shortfall in the upcoming fiscal year, partly because the federal government trimmed back on how much it pays toward the Medicaid program that provides health care to the poor.
House Appropriations Chairman Jim Fannin, D-Jonesboro, said earlier in the day that he left a budget discussion with the Jindal administration feeling better than he thought he would.
“I can’t say I’m happy about the budget,” Fannin said. “I can say ... I’m considerably happier than last year.”
Fannin said a number of factors will help fill the gap, including public-private partnerships, college tuition and a tobacco settlement refinancing.
The Jindal administration anticipates generating as much as $85 million by possibly refinancing a settlement. The settlement stems from the state opting to sell part of the money that major tobacco companies agreed to pay states over decades for health-care costs related to smoking.
Any savings from refinancing the tobacco settlement would go toward the Taylor Opportunity Program for Students, or TOPS. However, an infusion of money for the free college tuition program would decrease the state’s financial obligations for TOPS, generating more money for the budget.
At the same time, the governor is working on a proposal to eliminate the state’s personal income and corporate taxes.
He said that proposal will not affect the budget because he plans to replace the roughly $3 billion in tax revenue.
Jindal said there will be no new college tuition increases outside of the hikes already allowed through the LA GRAD Act, a 2010 law that gave campuses permission to raise tuition by up to 10 percent each year if they meet goals.
At the lower education level, basic state funding for public schools will remain largely frozen for the fifth year in a row. Jindal said the only increases will be for student enrollment growth.
The governor said doctors and other health care providers who treat Medicaid patients will not see further drops in the compensation they receive.
Jindal laughed when asked if he would reverse course like Florida Gov. Rick Scott and expand the state’s Medicaid rolls with federal government assistance that eventually will drop from 100 percent to 90 percent. Jindal said the answer remains “No.”
The expansion would provide federally funded health insurance to tens of thousands of Louisiana’s working poor, but the governor has said the program is too expensive.
State Rep. Brett Geymann, R-Lake Charles, said he hopes the governor steers away from using nonrecurring money for expenses that must be met year after year.
“I hope the executive budget includes no contingencies or one-time money used on recurring expenses. These practices of the past have put us in a position of always dealing with midyear cuts and beginning year shortfalls as we fill the holes left by accounting gimmicks,” Geymann said.
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