Jindal proposes state budget and layoffs
Doctor pay would shrink as costs rise
Gov. Bobby Jindal proposed a $25.5 billion state operating budget Thursday that would close prisons, eliminate more than 6,000 positions and cut rates for health-care providers who treat the poor.
The spending plan is studded with cuts, reductions and shifts toward privatization.
The White Castle ferry would close, many state workers’ paychecks would shrink to decrease the state’s retirement costs, hundreds would lose their jobs and an Avoyelles Parish prison would be sold.
The governor’s proposal is the starting point for a monthslong debate by the Legislature on how state government should manage its finances in the fiscal year that starts July 1. Changes can be made, and many of the proposals contained in the budget hinge on separate legislation.
The proposed state operating budget is slightly smaller than this year’s budget, which currently stands at $25.6 billion.
The proposal builds upon $14.2 billion in state funds and $11.3 billion in federal funds to operate schools, run hospitals and provide other state services.
The Jindal administration had to grapple with an $895 million projected shortfall in the upcoming fiscal year.
“It meant holding the line on certain anticipated cost increases,” Commissioner of Administration Paul Rainwater told members of the Joint Legislative Committee on the Budget.
Rainwater unveiled the proposal without the governor in attendance. As commissioner, Rainwater is Jindal’s top budget adviser.
The highlights of Jindal’s proposal include:
- Freezing, for a fourth year in a row, per-pupil basic state aid to public schools.
- Selling the Avoyelles Correctional Center in Cottonport to a private company.
- Hiring a private company to manage a state employee health plan.
- Making 1 to 3 percent cuts in the rates that health-care providers receive for treating the poor through the Medicaid program.
- Closing prisons in Pineville and Keithville and shifting more inmates into the care of sheriffs at parish prisons.
Part of the burden in trimming costs would fall on state employees, who face increased retirement costs coupled with no guarantee of merit pay increases.
Members of Councils on Aging from across the state attended the meeting to protest the proposed move of the Office of Elderly Affairs from the Governor’s Office to the state Department of Health and Hospitals.
“All we’re doing is merging it ... so elderly people can navigate a complicated system,” Rainwater said amid booing from the audience.
The public and lobbyists packed four committee rooms at the State Capitol for the nearly three-hour discussion of the governor’s proposed spending plan.
“Seventy percent of this I agree with. Thirty percent is kind of leaving a bad taste in my mouth,” said state Rep. James Armes, D-Leesville.
Armes suggested that increasing the amount of money many state workers pay toward their retirements could be considered a tax. A similar proposal died last year under that argument.
State Sen. Francis Thompson, D-Delhi, said the push toward privatization is hard to sell back home to constituents fed up with out-of-country call centers.
Most state agencies’ budgets would shrink under the governor’s plan.
Rainwater emphasized that higher education funding would stay at current levels once tuition increases and a $50 million budget cut to colleges from December are included in the mix.
LSU System President John Lombardi shared the good news with campus colleagues in an email Thursday afternoon that outlined how the Jindal administration would like them to respond to “this good treatment.”
The suggestions included recognizing the need for retirement reform.
House Speaker Chuck Kleckley, R-Lake Charles, questioned how the LSU Agricultural Center, which does not have tuition-paying students, would be protected.
Barry Dussé, director of planning and budget for the Division of Administration, said Rainwater is meeting with LSU about the problem.
“The fix is not in,” Dussé said.
LSU Agricultural Center Chancellor Bill Richardson said he is “cautiously optimistic” the Jindal administration is giving extra attention to higher education this year.
“We almost don’t know how to comment, because we don’t know what to comment on yet,” Richardson said.
Last year, the center flirted with declaring a financial emergency, called exigency, because of budget cuts before ultimately backing off.
Referencing public school funding, State Superintendent of Education John White defended the freeze in per-student spending, which would be the fourth such action in a row since 2009.
White said Texas and Mississippi have reduced basic aid to public schools and that other state services in Louisiana have been reduced, not just frozen, amid state budget problems.
The state Department of Health and Hospitals’ budget would increase by more than $680 million to $8.95 billion.
“The overall driver is health-care costs going up,” DHH Secretary Bruce Greenstein said. More people are becoming eligible for Medicaid, the government health insurance program for the poor, he said.
To offset some of the increasing Medicaid costs, the budget plan calls for an average 2 percent cut in payments made to doctors, hospitals and others who provide health care through Medicaid.
The 2 percent equates to $24 million in state funds that attracts three times that amount in federal funds.
Greenstein said some of the cuts could be offset by a federal law that would provide higher reimbursement for certain primary care services beginning in 2013.
Louisiana State Medical Society President Dr. Andy Blalock said physicians are “deeply concerned” about the prospects of a cut in reimbursements for care delivered.
“Although the increase of primary care provider rates required by federal health-care reform shields some physicians from the proposed cut, possible further rate reductions for the nonprimary care providers will force many to seriously assess the economic feasibility of participating as a provider in the Medicaid program,” Blalock said in a statement issued late Thursday.
Will Sentell, Jordan Blum
and Marsha Shuler
of the Capitol news bureau
contributed to this report.