Our Views: A new face on failures

As the third commissioner of administration for Gov. Bobby Jindal, Kristy Nichols has the unenviable task of putting a happy face on another cobbled-together budget.

Technically balanced, the $24.7 billion budget proposal for fiscal year 2014 is like its predecessors for five years, robbing Peter to pay Paul in a hundred different ways. Peter is so used to the treatment that he just hands over the wallet when he sees some new commissioner coming around the bend.

Unhappily for Nichols, the budgetary shell game is getting a little old, and has now threatened one of Republican legislators’ key priorities, the TOPS scholarships.

They largely benefit middle- and upper-income families, and Nichols proposes using caches of money from a tobacco lawsuit settlement to fund $120 million for TOPS.

“I have spoken with a good number of the members of the Legislature, and each senator and representative has expressed concern over how this budget has been cobbled together,” noted Rep. Thomas Carmody, R-Shreveport, in a statement.

Carmody and other conservatives are just now catching on? Five years of mid-year budget cuts have cut state support for colleges and universities, which used to be a top economic development priority for conservative lawmakers and interest groups. Carmody and others voiced concern over TOPS because it has a political constituency in the GOP suburbs, but their fear is for the years after fiscal 2014, for the one-time money will have to be replaced with money from the general fund eventually.

Our concern is more immediate: The ways that Jindal’s budget uses asset sales and a bewildering array of shifts of money from one fund to another may reach new levels in this budget. But the new budget’s structural deficiencies almost guarantee more midyear budget cuts, and cannot be called “balanced” in any broader sense of the term.

Louisiana’s finances have not been shattered by national recession, but local incompetence: Jindal recklessly cut state income taxes and made other giveaways in the fiscal 2009 budget, with oil prices high and hurricane recovery spending fueling tax revenues.

Those mistakes that echoed through the years, for which Nichols is the messenger — and for legislators who enacted the tax cuts and have declined opportunities to raise revenues through tax increases or repealing tax exemptions.

If Carmody and others want to criticize, they can find fault with Nichols’ expedients to meet the crisis, but should not be shocked that Peter is light in the wallet. Many legislators are willing accomplices to the robbery.

Comments

1) Comment by ScotB - 03/12/2013

Louisiana is closer than ever to balancing its budget in the sense that it gets back in federal dollars about what it pays now - $1.02 for every dollar it sends to the feds. So, it is still marginally a net "taker". It once compared to Mississippi prior to Jindal's economic development and budget reform efforts. Mississippi gets back $2.73 for every dollar it sends to Washington. It is better we learn to stand on our own because Washington is way overdue for some serious fiscal reform and you can be sure it is coming! For comparison, Texas gets 91 cents back for every dollar it send to the federal government.

2) Comment by Dawson - 03/11/2013

Man, if a government program like tops benefits white people that pay taxes we should definitely get rid of it. What was the government thinking? I am all for TOPS going away, if you want to go to school then pay for it or get a private scholarship. Just make sure if you take a government subsidized TOPS program away you take ALL government subsidized scholarship programs away. Get the government out of education and the world would be a better and more educated place.

3) Comment by InPVille - 03/11/2013

@agagent: What is the matter? You don't like people supporting your position if they cite another source than the one you used? The way I look at it, more and varied sources saying the same thing is to be preferred in making an argument.

4) Comment by agagent - 03/11/2013

Anyway, I would be more inclined to believe the article than a liberal clown.

5) Comment by 8point6 - 03/11/2013

@agagent, InPVille, [e-mail]; This is "our views" opinion. I take it with a grain of salt, just like the comments from my "progressive" friends. They can't see the forest for the trees.

6) Comment by agagent - 03/11/2013

The article I referenced was written in 2010, after Obamacare was passed. It was talking about data from 10 years prior. Redclown would have to use the same data for the figures to match. So much for your “got you” moment.

7) Comment by agagent - 03/11/2013

So what. That statement does not change the fact that the federal government has assisted the funding of our state hospitals for 12 years and now that funding is being reduced by a provision in Obamacare . . . . and you blame Jindal for a reduction in funding coming from Obama and the Democrats.

8) Comment by InPVille - 03/10/2013

@agagent: "Five states (New York, California, Texas, Louisiana and New Jersey) receive nearly half of all DSH funds" -[**]- @postscript56: "agagent - Your numbers have been thoroughly debunked by RODEOCLOWN" -[ **]- The above figure from agagent's source is fairly close. According to the following Congressional Research Service Report to Congress: http://www.fas.org/sgp/crs/misc/R42865.pdf For 2011 in millions of dollars a total of 11,278 millions were allotted. CA $1096.3 million, LA $732 million, NY $1606.4 million, NJ $643.8 million, TX $956.3 million. This comes to 44.64% of the total allotted. For 2010 the percentages comes to 44.47% according to CRS. When 10% of states receive that high of a percentage of the total, it is a pretty high disproportionate share of a disproportionate share. Even in terms of population the five states only have 27.63% of the total population in the 50 states.

9) Comment by agagent - 03/10/2013

Louisiana's total direct revenue increased to $18.9 billion in 2010 and to 20.4 billion in 2011. Check the post on why state hospitals are losing $79.3 million in federal DHS funds for the coming year. It is a part of Obamacare and the reductions will continue until 2020. There are other reductions in federal funding too.

10) Comment by postscript56 - 03/10/2013

agagent - Your numbers have been thoroughly debunked by RODEOCLOWN posting on another article. But here you are still posting these fabricated numbers. rgerald - I could enlighten you as to the legitimate authority of taxation and the needful expenditure of tax dollars, but frankly I don't care if you wallow in your radical ignorance.

11) Comment by GardenVariety - 03/10/2013

News flash, RGW (MC Hackney) and Agagent (DJ Superfluous), Jindal's all in favor of government overreach and spending, as long as it benefits himself, his sycophants, and his donors. He's figured out which political affiliation and alliances would help him reap the greatest power with the least responsibility. He's certainly no libertarian, fiscal conservative, or defender of the republic. And his authoritarian tendencies betray a sizable anti- democracy streak. If Huey Long was LA's Mussolini, Jindal is its Stalin. (BTW: agagent x 9 = 0)

12) Comment by InPVille - 03/10/2013

http://www.treasury.state.la.us/Lists/SiteArticlesByCat/DispForm_Single.aspx?List=c023d63e-ac65-439d-af97-da71d8688dff&ID=721 -[**]- How Real is the Medicaid Crisis? By State Treasurer John Kennedy - - - Last spring the Legislature increased the state's Medicaid budget by $788 million. Don't take my word for it. According to the Legislative Fiscal Office, "Prior year actual expenditures for Medicaid indicate total actual expenditures of $6.64 B in FY 12. Based on these actuals, the Medical Vendor Payments appropriation reflects an overall increase of $788.3 M, or approximately 11.9%, from FY 12." (Fiscal Highlights, Fiscal Year 2012 - 2013, Legislative Fiscal Office, p. 92.) So why is there a funding crisis? One answer, according to some, is that Congress recently eliminated the temporary extra Medicaid money it was giving us because of the hurricanes. Worst case, this will result in a loss of $860 million, including the state match. However, a look at the historical spending in Louisiana's Medicaid Program reveals a startling fact: 92% of the reduction in this year's Medicaid budget caused by the recent loss of federal funds could be absorbed by going back to last year's budget. That's correct: this year's Medicaid budget is $788 million, or 12%, more than last year's budget. $107 million alone of the increase "is based on an inflation factor of 4.4%, and not growth in the number of actual Medicaid recipients." (Fiscal Highlights, p. 29). Go back to last year's level of spending and the current shortfall caused by the recent loss of federal funds is only $68 million. Here's what Louisiana taxpayers have spent on Medicaid for each of the past six years: Fiscal Yr. 2007-08 $5.9 billion/1.17 million enrollees -- -- Fiscal Yr. 2008-09 $6.4 billion/1.23 million enrollees -- -- Fiscal Yr. 2009-10 $6.6 billion/1.30 million enrollees -- -- Fiscal Yr. 2010-11 $6.8 billion/1.34 million enrollees -- -- Fiscal Yr. 2011-12 $6.6 billion/1.20 million enrollees -- -- Fiscal Yr. 2012-13 $7.4 billion/1.25 million enrollees (Source: DHH Annual Medicaid Reports; Fiscal Highlights.) http://new.dhh.louisiana.gov/index.cfm/newsroom/detail/1699

13) Comment by agagent - 03/10/2013

The writer should know the facts: Louisiana’s biggest loss of revenue is from the reduction in federal funds, For 12 years Louisiana has received federal DSH funds to support state hospitals (long before Jindal) and, through a provision in Obamacare, those payments will be reduced each year until 2020. Federal officials say Louisiana must pay a higher share of Medicaid, so the state government must take money from other programs to fund Medicaid . . . the facts.

14) Comment by agagent - 03/10/2013

It is not difficult for the editorial writer to learn that Louisiana tax revenues are increasing: from $4.1 billion in 2009 to $4.8 billion in 2011.

15) Comment by gary - 03/10/2013

Ah yes, rgeraldwallace riding in to rescue "the wanna be choice" for leader of the "party of stupid". The only government types that are getting rich in Louisiana is his handpicked yes men - like Tim Barfield.

16) Comment by [e-mail] - 03/10/2013

Recklessly cut taxes? Cutting taxes, curtailing state payouts, cutting state payrolls, and using less taxpayer money is what any Governor should be doing. A nanny state is what you want, one in which the government types get rich and the little worker ant people get poorer. Like the Federal government is doing now.

17) Comment by KilgoreTrout - 03/10/2013

Another of Bobby Jindal’s “chickens” roosted Thursday. According to a story in the Baton Rouge Business Report’s Daily Report a Federal Judge in Baton Rouge handed the state of Louisiana a bill for $239 Million. Unlike a state court judgment, Federal court judgments can be enforced against the state by seizing funds in state bank account to satisfy the judgment. Some of Medicaid over-payments by the Feds occurred on Bobby Jindal’s watch as Secretary of the La. Department of Health and Hospitals. Bobby is credited with fixing the fiscal problems that existed when he took over DHH. Part of the fix appears to have been spending Federal funds that did not belong to the state. In any case, it is appropriate that Jindal now will have to repay the Feds for his mistake. The only problem is that it is the citizens of Louisiana who, once again, will suffer as a result of Bobby’s ineptitude. How many more chickens will come home to roost before Bobby’s leaves our state forever?

18) Comment by KilgoreTrout - 03/10/2013

Bobby Jindal, In an email message to his “friends” was this startling statement: “The folks in Washington could take a page out of our playbook in Louisiana and make government live within its means instead of taking money out of the private sector economy to grow government.” In other words, Bobby is suggesting that the people at the U.S. Capitol emulate, fiscally, what he has done at the Louisiana Capitol. Here’s what Jindal has done in Louisiana: – The per capita state debt has reached an all-time record. – The state is within striking distance of the constitutional “cap” on total debt. – The current state budget has a $278 Million hole in it because Jindal budgeted funds that never materialized. – The proposed budget for FY14 has a $1.2 Billion shortfall and is balanced using one-time and fictitious revenues. – The Unfunded liability is the state pension systems has grown by over $6 Billion. Unfortunately, it appears that the “folks in Washington” have already borrowed Louisiana’s playbook. The primary difference between Louisiana and D.C. is that they print money; we imagine it. Folks, you just cannot make this stuff up. Bobby actually wrote the above quoted statement.

19) Comment by KilgoreTrout - 03/10/2013

After Bobby Jindal and the leges used fiscal gimmicks to declare the state budget balanced for the last 5 years the chickens have come home to roost. After millions of dollars in mid-year budget cuts in December, 2012, up to $278 Million more may have to cut before June 30. The shortfall results from budgeting revenues that were highly unlikely to materialize. It’s interesting that Jindal is even using some of the same revenues that didn’t materialize in the current fiscal year to balance the budget for FY14. One of those is the sale of the old insurance building property next to the State Capitol. Not only has the property not sold, but the revenues projected are higher than the appraisals. It’s the same for other properties around the state. Even in Louisiana, the state cannot spend the same money twice. Either there will be a shortfall in the current year’s budget or in the FY14 budget. Jindal makes a mockery of the intent of state constitution which requires a balanced budget. A majority of the leges are equally at fault because they voted for this fraud. Such accounting gimmickry makes as much sense as us mullets balancing our personal budgets based on the proceeds from winning the Powerball. It’s time to stop these fiscal games that only serve to harm the citizens of our state by denying them needed services. Jindal will not stop deceiving us; it’s up the leges to bring some sanity to our state budget. Ironically (or hypocritically) it’s the same sanity that Jindal claims is needed at the Federal level.

20) Comment by postscript56 - 03/10/2013

I think agagent is a secret "plant." It's his job to disseminate the message posing as John Q. Public.

21) Comment by dday198 - 03/10/2013

mouth full for agagent

22) Comment by gary - 03/10/2013

Whoa, agagent hogging all the comments. brguy: you are spot on. The folks up in Shreveport (capital of east tegas) need to take a close look at Rep Carmondy - he must of just fell off the turnip truck - he seems concerned all of a sudden our state is in a jam. Don't worry Rep Carmondy our guv is gonna take care of it - trust him!

23) Comment by brguy - 03/10/2013

Thank you Advocate for yet another editorial that sharply exposes the Jindal reign for the debacle that it clearly has become. This governor has inflicted systemic harm upon the state and its citizenry that will take generations to rectify. And all because of his unfounded aspirations for national political office.

24) Comment by agagent - 03/09/2013

"Some states rely more heavily than others on DSH as a way to increase state revenue. By qualifying more services and providers as DSH-eligible, states are able to share the costs of providing health care services with the federal government. Within the first 10 years of the program, some states emerged as aggressive users of the DSH program. Five states (New York, California, Texas, Louisiana and New Jersey) receive nearly half of all DSH funds . DSH doesn’t just cover the cost of care for those who are unable to pay. It also fills the gap between the cost of care and what providers are paid by Medicaid to deliver that care. Public hospitals, which tend to serve a larger percent of persons on public health insurance (up to 70 percent of their patients), are particularly reliant on DSH funds because Medicaid pays providers at a lower rate than private insurers do."--Health Affairs (October 15th, 2010)

25) Comment by agagent - 03/09/2013

"BATON ROUGE—Today, the Louisiana Division of Administration and the Louisiana Department of Health and Hospitals outlined a plan to address the budget shortfall resulting from Congress's action that resulted in a decrease to the state's disaster-recovery Federal Medical Assistance Percentage (FMAP) rate from 71.92 percent to a projected 65.51 percent - the rate represents the lowest reimbursement rate Louisiana has had in more than 25 years. For Fiscal Year 2013, the decrease equates to a total impact of approximately $859.2 million, which equates to approximately $287.1 million in state general funds."--Bayou Health (July 13, 2012)

26) Comment by GardenVariety - 03/09/2013

agagent x 5 = 0

27) Comment by agagent - 03/09/2013

Louisiana’s Medicaid costs are unrestricted. The estimated Medicaid shortfall for the fiscal year which began on July 1, 2012 was $859 million. The rest of the budget was cut to fund Medicaid. That has been a familiar theme in recent years. Mid-year Medicaid deficits are filled by cutting the unprotected part of the budget, which is primarily higher education and health and hospital. Out of control Medicaid costs . . . Brought to you by the Democrats in Washington.

28) Comment by agagent - 03/09/2013

Obamacare reduced federal payments to "Disproportionate Share Hospitals" (hospitals which serve the poor) by some $45 billion. These cuts were enacted in Obamacare, and Louisiana state hospitals are just receiving their share of the Obamacare cuts. As usual, The Advocate blames Jindal for problems created by the Democrats in Washington.

29) Comment by agagent - 03/09/2013

"This layoff is being proposed because LSU Health Care Services Division has received a reduction to their Disproportionate Share Hospital Program payments from the Louisiana Department of Health and Hospitals for state fiscal year 2013. This reduction is part of the implementation plan by DHH to respond to the decrease in federal funding in the Medicaid program. The LSU Health Care Services Division was originally notified of the need to decrease state match in the DSH program by $79.3 million in state general fund from the amount appropriated to DHH by the legislature as match for LSU."--Lallie Kemp Medical Center, General Notice of Impending Layoff

30) Comment by agagent - 03/09/2013

The state GDP has increased dramatically, indicating a growing state economy. It was $202 billion in 2009, $232 billion in 2010, and $247 billion in 2011. The State of Louisiana will receive increasing revenue when it allows businesses to grow. Louisiana’s unemployment rate is 5.5% as compared to a 7.7% national unemployment rate.

31) Comment by agagent - 03/09/2013

The Advocate failed to report the facts. The biggest revenue losses were the hundreds of millions of dollars in reduced payments from the federal government. After a one year slump in 2009, direct revenue to the state quickly rebounded to $18.9 billion in 2010 and to $21.4 billion in 2011, which is higher than direct revenue before the recession.