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Wednesday, November 14, 2018



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Estimate of Louisiana's budget shortfall drops to $600M

Estimate of Louisiana's budget shortfall drops to $600M

BATON ROUGE, La. (AP) — The price tag for Louisiana's budget shortfall next year has dropped to $600 million.

Gov. John Bel Edwards' chief financial adviser, Commissioner of Administration Jay Dardenne, told state senators Monday that a gap once pegged at $750 million is lower for the financial year that begins July 1.

The reduction, Dardenne told the Senate Finance Committee, is largely due to changed estimates of how many people will use existing Medicaid services and to projected savings from a planned Medicaid program expansion. Under an expansion, the Edwards administration says Louisiana can take advantage of enhanced federal financing rates for health services the state currently provides for the poor and uninsured.

Sen. Sharon Hewitt, R-Slidell, questioned the wide swings in health financing estimates, saying it made her "uncomfortable."

"It kind of blows my mind, to be honest, that things could change that fast," she said.

Dardenne said the shortfall figure could continue to fluctuate as the Edwards administration looks for ways to trim spending and take advantage of other financing sources.

To close the $600 million hole, the Democratic governor is proposing cuts across most agencies, to the TOPS college tuition program and to safety net health services for the poor. He is also seeking a special session in June to consider tax changes that could lessen the cuts.

Senators questioned Edwards' proposal to only provide about one-third of the approximately $300 million needed to fully cover tuition costs for all eligible students. Another $185 million, Dardenne said, would be needed to fully fund the program.

"TOPS is taking a major hit in the budget. We don't like it any more than you do," Dardenne said.

But he pushed back against suggestions from House Appropriations Committee Chairman Cameron Henry, R-Metairie, that other parts of the budget could be reduced to shift more money to TOPS.

"I can't tell you there's $185 million in responsible cuts that could be made in order to fund TOPS," Dardenne told senators, who won't craft their version of next year's budget until the House first completes its work.

The House Appropriations Committee is expected to unveil its proposal to balance next year's budget within two weeks.

Dardenne said the administration doesn't believe some budget-balancing ideas he has heard from House members are viable.

He said possibly delaying a payment to Medicaid providers to push it into another budget year would be "a very irresponsible fiscal act." And he said talk of turning over Medicaid programs for the elderly and people with developmental disabilities to managed-care companies could have long-term savings, but not in the upcoming financial year.

Sen. Conrad Appel, R-Metairie, said he wanted to see more of a long-term vision from the Edwards administration about ratcheting down state spending.

"We need the governor to present a strategy," he said.
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Follow Melinda Deslatte on Twitter at http://twitter.com/melindadeslatte. Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.