Use of one-time funds worries legislators

Legislative budget leaders criticized the Jindal administration’s proposed use of $682 million in “one-time” state revenue Tuesday to fund “ongoing” Medicaid health care expenses in the fiscal year that begins July 1.

“It’s troubling to see this money in your budget that I know will create a problem for us in the years to come,” House Appropriations Committee Chairman Jim Fannin told state health officials.

One-time money refers to funds that are collected once and are not likely to be available in the future.

If the dollars aren’t there, an even larger budget problem would occur because the state dollars are used to attract more than that in federal funds, said Fannin, R-Jonesboro.

Committee Vice Chairman Simone Champagne said funds allocated for an expansion of community-based services for the developmentally disabled are questionable and unsustainable. She wanted answers as to where the dollars would come from next year to continue services people have waited so long for.

“It’s very unfair,” said Champagne, R-Jeanerette.

“Ultimately, what bothers me … is who we affect when we do it, and it always seems to be the most vulnerable,” said Rep. John Schroder, R-Covington.

The administration uses $262 million in tax amnesty collections and nearly wipes out the Medicaid Trust Fund for the Elderly, hurricane recovery funds and overcollections from a variety of sources to finish funding the $8 billion Medicaid program — the government health insurance for the poor and uninsured. Some $233 million is used from the Elderly trust — leaving only $30 million in the fund that at one time exceeded $800 million.

“My calculation is adding up to a lot of challenges for you next year. … They seem to be huge,” Fannin said.

“I agree,” responded Kathy Kliebert, secretary of the state Department of Health and Hospitals.

“Every year, we face these challenges. We continue to look for efficiencies and work with the division (of administration) and the Legislature to make sure that priorities are funded.”

Kliebert said DHH is working with financial consultants Alvarez & Marsal on fraud prevention, which could save dollars.

In addition, she said discussions are ongoing with the state’s nursing homes on ways to generate dollars.

“They are not total solutions. We have to have additional solutions in out-years,” she said.

Rep. Patricia Smith, D-Baton Rouge, suggested there would not be a problem if Louisiana had embraced the federally funded Medicaid expansion “and having those dollars coming into the state.”

Kliebert and other health agency executives spent more than three hours answering questions as the House Appropriations Committee continued hearings on Gov. Bobby Jindal’s proposed $25 billion state budget, House Bill 1. DHH accounts for $9.4 billion of the state spending plan, $8 billion of it in Medicaid.

As the hearing opened, the panel heard that due to a miscalculation, there is $40 million less available from tax amnesty collections.

Commissioner of Administration Kristy Nichols said the tax amnesty money was “overappropriated.” But she said adjustments will be made so the Medicaid budget is not affected.

“From a budget standpoint, there is no shortfall,” Nichols said.

Nichols said the administration will tap $28 million in overcollections that has not been used and, perhaps, another $15 million in bond premiums from the most recent bond sale.

The administration’s budget includes money to increase the number of developmentally disabled people getting home- and community-based services.

Jindal vetoed an extra $4 million lawmakers appropriated for the purpose during the current fiscal year, irking legislators and launching a vocal but unsuccessful veto override attempt.

The administration proposes to use $12.1 million in federal Community Development Block Grant funds the state received in the wake of hurricanes Isaac and Gustav.

Fannin said he did not think the grant funds could be used for the health services and “certainly it won’t be allowed more than one year if it is.”

Kliebert said federal officials have approved use of similar funds for health care purposes in the past.

“We will work on ways to fund in those out-years,” she said.

“How do we ensure it does not get cut next year?” Champagne asked.

Kliebert assured that services won’t be yanked from those who get services in the coming fiscal year.