Analysis: Jindal budget includes shaky financing plans for health services, public colleges



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BATON ROUGE, Louisiana — Louisiana's public college leaders and health care providers have been left as beggars by Gov. Bobby Jindal's budget proposal.

The Republican governor's $24.6 billion budget for the 2015-16 fiscal year is balanced on an uncertain set of premises, many of which require separate legislative approvals and none of which appear to have been greased for passage ahead of time.

Jindal and lawmakers are grappling with a $1.6 billion budget shortfall next year, so they need to drum up new sources of cash if they want to continue paying for many of the state's programs and services in the fiscal year that begins July 1.

Millions for higher education and health care services in the governor's recommended spending plan rely on Jindal's proposal to shrink spending on tax credit programs: $372 million for colleges and $154 million for health care. The state dollars are assumed to draw down additional federal Medicaid match, driving up the health care funding tied to the tax credit scale-back to $407 million.

The problem for campuses, health care providers and the students and patients who rely on them is that a significant slice of the proposal is opposed by business groups whose bottom line would take a heavy hit.

If higher education officials, health care leaders and their allies want the dollars, they're left to try to persuade lawmakers to vote against the wishes of businesses in their communities and industry lobbying groups that donate heavily to political campaigns. Or they have to come up with somewhere else to get money when the legislative session begins April 13.

"Clearly they've pitted groups against groups, and I think that's concerning obviously. It does draw the question are these really long-term solutions? It raises a lot of question on our part about the sustainability of any of this," said Paul Salles, president of the Louisiana Hospital Association.

Commissioner of Higher Education Joseph Rallo tried to downplay the conflict, saying the business community needs colleges to succeed, because companies need an educated workforce to fill their jobs.

"From my perspective, there is no tension between ourselves and the business community with respect to how things should be funded. We're trying to get to the same point. They're attracting the companies, and we're trying to prepare the graduates," Rallo said.

College systems are in a more precarious position than health care services in Jindal's budget proposal.

Even with the tax credit rewrite, higher education remains $211 million short of what it receives from the state this year. College officials will need to plead with lawmakers to raise fees, sell property or find other ways to drum up cash to pay for their campuses next year.

The Jindal administration offered lawmakers a list of money-generating ideas that aren't included in the budget and said it's willing to negotiate on other proposals. Higher education officials also are offering their own ideas.

Health care will be looking for new revenue concepts as well.

Even after assuming the uncertain financing from the tax credit rewrite, Jindal's budget still contains cuts to health care programs and services, like closure of a program that pays hospitals for the care of premature, low-birth-weight babies.

Meanwhile, private operators of the state-owned hospitals previously run by LSU asked for $142 million more than Jindal proposed to spend on them for care of the poor and uninsured.

Gregory Feirn, CEO of LCMC Health, which runs the state-owned hospital in New Orleans, said the requests made by the hospital managers "represented the bare bones of what is required to deliver care to the people of Louisiana."

Jindal administration leaders say they want to protect higher education and health care from steep cuts as much as possible.

But the governor has philosophical restrictions that limit lawmakers' options, most importantly his refusal to agree to anything that national anti-tax activist Grover Norquist considers a tax increase.

That leaves higher education officials and health care providers trying to craft solutions that meet Jindal's criteria, pitch them to lawmakers and make it all fit together before a final version of the budget is written in June.


EDITOR'S NOTE: Melinda Deslatte covers the Louisiana Capitol for The Associated Press.

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