La. budget proposal released

The Jindal administration kicked off a months-long state budget debate Friday by presenting a $24.7 billion budget that relies on the finalization of contracts involving public hospitals, property sales and other unresolved issues.

College tuition will increase, many parents will be required to make a co-payment for their children to receive therapy for developmental delays and the elderly no longer will get help receiving free prescription drugs.

“We’re proud of this budget even though this budget certainly has been a challenge,” Commissioner of Administration Kristy Nichols told members of the Joint Legislative Committee on the Budget.

Nichols said the Jindal administration had to hold the line on cost increases and find offsets because of a $1.3 billion shortfall in the revenue needed to keep state government services at their current level.

No new State Police troopers would be trained for another year. Several thousand state government workers could be out of a job. College tuition would rise by $75 million to help balance universities’ budgets. More than $1 million would be saved by no longer helping the elderly apply for free medicine through pharmaceutical company programs.

The presentation of the proposed spending plan for the fiscal year that starts July 1 is the starting point for a budget debate that will ramp up next month with legislative hearings. A final version of the plan that funds colleges, schools and other public services will be crafted in the legislative session that starts in April.

The governor’s proposed budget includes $7.9 billion in state general fund revenue and $9.7 billion in federal dollars. The biggest spending area is in health care, with the state Department of Health and Hospitals slated to receive $8.9 billion.

The most dramatic change from the current year to the next is in the LSU Health Care Services Division, which runs most of the state’s public hospitals. Total funding for the division would drop by $781 million in the governor’s proposal.

The Jindal administration wants to turn over most of the public hospitals to private business, saving the state money. However, only some of the agreements are in place, making legislators anxious about funding being stripped without any guarantees on who will provide health care to their constituents.

“We’re not even saying who that somebody is,” state Sen. Francis Thompson, D-Delhi, told Nichols.

The proposed budget that the Jindal administration put forth contains other uncertainties.

“I want to be cautious as we move forward with contingencies,” House Speaker Chuck Kleckley, R-Lake Charles, told Nichols.

The budget includes:

  • $47 million from planned property sales, including $10 million for a downtown Baton Rouge office building and $4.8 million from the sale of a lot next to the State Capitol. The Capitol lot was supposed to be sold in the current fiscal year but never was.
  • Saving $1.7 million by requiring some families to help pay for the therapy and other support their young children receive for developmental delays or disabilities through the EarlySteps program. The size of payments would be based on families’ income levels. Separate legislation is required to put the fee schedule in place.

Higher education funding would remain largely static, with tuition increases and one-time, or nonrecurring, revenue sources helping fill gaps.

The Governor’s Office argues that the tuition hikes they are counting on to keep higher education funding stable aren’t new increases because the law authorizing them was passed three years ago. The 2010 LA GRAD Act gives colleges the authority to raise tuition 10 percent annually after hitting certain academic benchmarks.

Additionally, without using $424 million from one-time revenue generators, such as, property sales, public colleges and universities would face a 19 percent drop in funding, Nichols said.

State Sen. Dan Claitor, R-Baton Rouge, complained that the Jindal administration’s approach to higher education funding is threatening LSU’s flagship status. He said staff is leaving and classes are crowded.

Higher education officials said later in the day that they still are looking at the governor’s proposal.

“We have not yet had an opportunity to fully assess the potential impact of the proposed budget, but we look forward to working with the governor, legislators and other state leaders in finding solutions for funding higher education in Louisiana,” LSU interim President and interim Chancellor William Jenkins said.

Southern University System President Ronald Mason said, “It still is early in the process.”

State Sen. Sharon Broome, D-Baton Rouge, said her constituents are unhappy about the speed with which the Jindal administration is shifting care from LSU’s Earl K. Long Medical Center to Our Lady of the Lake Regional Medical Center.

The shift is part of the governor’s strategy for private business taking over public health care.

Nichols said the partnerships produce savings that ensure the state still is able to provide health care.

Details of the governor’s plan to eliminate the state’s personal income and corporate taxes remain a mystery even though the administration has conceded that a state sales tax hike is likely to replace the revenue.

Nichols told legislators that the budget contains no tax increases. Afterward, she said any increases will not be viewed as such because the governor wants to make the eliminations in a budget neutral fashion by swapping revenue sources.

Koran Addo of The Advocate Capitol news bureau
contributed to this report.