State budget shortfall at $963 milliion
BATON ROUGE, La. — Lawmakers were told Friday that Louisiana’s budget shortfall for next year is $963 million, in their first detailed glimpse of the problems they’ll face in crafting the state’s next set of spending plans.
The figure, outlined by Gov. Bobby Jindal’s budget advisers, is the gap between state government’s projected income and the costs to continue all its existing programs and services and account for inflationary growth in the 2013-14 budget year that begins July 1.
Barry Dussé, director of the Office of Planning and Budget, described the estimate as the “cost of doing tomorrow what you are doing today.”
He said more than one-third of the gap, about $355 million, was tied to a drop in federal Medicaid financing that also created a deficit this year after Congress made the cut.
Another $250 million involves the loss of one-time dollars that Jindal and lawmakers used to pay for continuing programs, nearly all of it for health care services.
Meanwhile, the cost of Louisiana’s free college scholarship program, called TOPS, will jump another $28 million next year on top of its $172 million current price tag, and the costs of the state’s pharmacy program for Medicaid recipients is expected to grow by $71 million, Dussé said.
Another slice of the shortfall, at least $164 million, includes inflation costs, merit raises for state employees and other items that lawmakers haven’t necessarily funded in recent years.
Senate Finance Committee Chairman Jack Donahue, R-Mandeville, said the state can’t afford to pay for some of the inflationary growth, like raises for state employees and increased retirement costs. So, he said the shortfall in balancing next year’s budget won’t be the full $963 million.
But he added, “It’s still going to be a big number.”
Commissioner of Administration Kristy Nichols, the governor’s top budget adviser, said the Jindal administration is talking with state agencies about ways to make programs more efficient, coordinate and improve product purchasing and shrink costs.
“We certainly are anticipating balancing the budget without raising taxes,” Nichols said.
That will mean new budget cuts to programs and services. Areas most vulnerable to slashing are health care and public colleges.
This year’s budget stands at $25 billion. Since 2008, the state has made repeated rounds of cuts to services, laid off workers and closed state-run facilities to close continuing budget shortfalls that have cropped up year after year.
After lawmakers wrapped up their work on the current year’s spending plans, Congress reduced Louisiana’s Medicaid funding rate.
In response, the Jindal administration has made deep health care cuts, largely to the LSU-run public hospital system that care for the poor and uninsured and that train many of Louisiana’s medical professionals. LSU leaders and the governor’s health secretary want to move more of the patient care and training programs to private health care facilities.
Sen. Ed Murray, D-New Orleans, said the changes to the LSU health care network need to take into account next year’s looming budget problem.
“I want to make sure that as we are crafting plans to limp through the remainder of this year we won’t have to come back and start over from scratch to make further reductions,” he said.
By MELINDA DESLATTE