Covering Louisiana

Mar 10, 2011 7:01 PM by Press Release

Gov. Jindals Budget for Higher Ed, K-12, Health Care

BATON ROUGE - Today, Governor Bobby Jindal said he is submitting a budget for the upcoming fiscal year that does not raise taxes, protects higher education funding, protects K-12 education funding, protects health care funding and reduces the use of one-time money. The Governor held a mediaavailability today to outline his Executive Budget that will formally be submitted to the Legislature tomorrow, March 11.

Governor Jindal said, "Our budget is the next critical step in our work to Build a Better Louisiana for our Children, as we work to keep our economy growing and create even more jobs and opportunity in our state. There will be those who say we need to cut more and there will be those who say we need to cut less. The bottom line is this budget protects critical services like health care, higher education and k-12 education, while not raising taxes on our people and our businesses,

"There will be those who do not want to see one single government job or program lost. They will be the ones who want to raise taxes. We have already seen the ideas about hospital taxes, increasing taxes on natural gas drilling, raising taxes by delaying tax cuts, and maybe we will even have a Twinkie tax before the session is over. I will save you the trouble of asking us if we will support those proposals - the answer will be flatly, no.

"We know many families are still hurting and struggling through tough economic times. Adding to their financial burdens would be one of the worst things we could do. Our top priority is to ensure Louisiana is a land of tremendous opportunity so that no one has to leave our state to pursue their dreams. That's why we have a budget that makes us live within our means and right-sizes state government to a more sustainable size that will serve our people better by keeping our economy growing and creating more jobs."

1. No Tax Increases. Cutting The Size Of Government
The budget includes countless initiatives, department by department, using a host of strategies - including reorganization, consolidation, collaboration, privatization, modernization, and policy innovation - to strategically reduce spending while transforming government to do more with less. Major reduction and savings areas include:

· Department-by-department strategic reductions to the existing operating budget: Approx. $410 million

· Reductions across the executive branch by annualizing FY 11 midyear cuts: Approx. $110 million

· Reducing more than 4,000 fulltime positions across the executive branch: Approx. $96 million

· Protecting MFP total funding at more than $3.3 billion, but not funding certain increases anticipated at continuation, such as state employee "merit" raises; absorbing inflationary costs, with reductions to others: Approx. $200 million

· Reducing projected General Fund increases at continuation through funding efficiencies: Approx. $225 million

Overall, the FY 12 Executive Budget proposes total funding of $24.9 billion, a decrease of $1.1 billion, or 4.3 percent, compared to the FY 11 total existing operating budget of $26 billion.

2. Protecting Higher Education Funding
Due to the loss of ARRA funding for higher education, the Governor's Executive Budget replaces it with increases in state funding and self-generated revenue. After replacing ARRA, and if TOPS or changes in hospital funding are not counted, then there is no change in funding for higher education.

The FY 12 budget provides $82.5 million in funding, which includes $39.9 million in additional new funds, plus $92 million from a proposed constitutional amendment, bringing the total funding for TOPS to $174.5 million. The necessary increases are also included in case the Legislature passes the Governor's proposals to provide more tuition flexibility to universities.

3. Protecting K-12 Education Funding.
Governor Jindal said his budget continues to protect K-12 education funding in the FY 12 budget. This means the MFP will increase from $3.31 billion in FY11 to $3.38 billion in FY 12.

While funding to other programs has been reduced by 26 percent over the last three years, funding for the state's MFP - the state's largest allocation of education funding - has increased by 6.2 percent, from $3.12 billion in FY2008 to $3.31 billion in FY11. From FY08 to FY 11, the state's appropriated student count allocation increased from $4,735 to $5,038 per student, representing a 6.4 percent increase. Taking into account the new dollars committed to the MFP in this budget, the MFP will have increased by 8.2 percent since FY 08.

4. Protecting Health Care Funding.
The Governor said the FY 12 budget proposes no cuts in Medicaid private provider rates, no reductions in eligibility and no elimination of services.

Additionally, the Governor said to offset the decrease of $130.6 million as a result of the DSH Audit Rule, $35.6 million in General Fund is provided to the 10 LSU state hospitals, as well as $62.4 million from the Upper Payment Limit (UPL) Program and $30 million in savings from the Low Income Needy Collaboration (INC) UPL model. The reduction in all General Fund revenue sources provided to the hospitals is 4.5 percent.

In the FY 12 budget, the state will have successfully paid off two disallowances from the federal government - one related to Medicare Upper Payment Limit (UPL) payments in the nursing home program and one related to disproportionate share hospital (DSH) payments to LSU hospitals.

The nursing homes disallowance was related to payments made to non-state government owned nursing homes as part of an intergovernmental transfer between the state and these homes between 1999 and 2001 that CMS ruled were improper. That nursing home UPL disallowance of $121.8 million has been settled and was paid in full effective Dec. 31, 2010. The DSH disallowance was related to alleged overpayments made by DHH to the LSU Health Care Services Division (LSU-HCDS) between 1996 and 2007. An appeal by the state of the DSH Disallowance was denied late last calendar year and the state has been ordered to pay $239 million. By the end of this fiscal year, CMS will have recouped approximately $96 million from Medicaid. The FY 12 proposed budget pays out the remainder of the outstanding DSH disallowance.

5. Reducing The Use Of One-Time Money
One-time money utilized in the current fiscal year - including ARRA funding, amnesty proceeds, and other funds - totaled $1.6 billion. To help bridge the gap and mitigate reductions to vulnerable services like higher education and health care, the Governor's budget does utilize one-time dollars in the upcoming fiscal year, but significantly less than before. The breakdown includes:

* One-time revenues for recurring expenses: $474 million

* Recurring revenues used for one-time expenses: $57 million

* Net total of one-time revenues for recurring expenses: $417 million

The amount of one-time revenue used for recurring expenditures in the proposed budget will be considerably less than the $800 million used in the last budget approved prior to the start of the Jindal administration (FY 08), and more than $1 billion less than the amount used in the current fiscal year. Importantly, this amount is also roughly the same as the projected year-to-year increase in General Fund revenue from the Revenue Estimating Conference's official forecasts between FY 12 and FY 13.

The Governor emphasized that this plan represents not only a bridge past the state's current fiscal challenges but a responsible approach that prepares the state for future fiscal years and an improving economy, while also protecting higher education and health care.

»Comments

»Topics in this article

Top Videos

1 2 3 4

Most Popular