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Wednesday, November 14, 2018



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Jindal proposes cuts, patchwork financing to close deficit

Jindal proposes cuts, patchwork financing to close deficit

BATON ROUGE, La. (AP) — Gov. Bobby Jindal proposed Wednesday to cut $150 million across agencies, tap into the state "rainy day" fund and use piecemeal financing to close a $487 million budget deficit, his final budget rebalancing plan before he leaves office in January.

Public colleges, which have taken several rounds of deep reductions during Jindal's tenure, would be shielded from the cuts. The state health department, however, would have to shrink its state spending by $130 million.

To make the numbers work, the plan relies on money that hasn't yet arrived in the state treasury. It includes one-time fixes that won't be available next year. And it strips money the health department earmarked to close a financing gap in Louisiana's Medicaid program to instead use elsewhere, leaving the Medicaid problem for Jindal's successor to solve.

The governor's top budget adviser, Commissioner of Administration Stafford Palmieri, unveiled a broad overview of the plan to rebalance the $25 billion budget for the 2014-15 fiscal year that began July 1.

"We are making reductions that are going to present the budget to the next administration in a good posture so that they can come in after the election and be able to pick up the ball for (next year) and start making decisions," Palmieri said.

Jindal, who dropped out of the presidential race Tuesday, is term-limited. Voters will choose Louisiana's next governor in Saturday's election, which is a runoff between Democrat John Bel Edwards and Republican David Vitter.

Lawmakers on the House and Senate budget committee — who have to approve parts of Jindal's proposal before they can take effect — were to consider the recommendations Friday, when more details were presented.

Use of $28 million from the state "rainy day" fund, as Jindal proposes, would require support from the full Legislature through a mailed ballot by mid-December.

Palmieri said agencies don't expect to lay off workers to shrink their spending as required, but won't be able to fill vacant jobs. Spending on non-essential travel, supplies and other items will remain frozen, to generate savings.

The plan assumes Louisiana would bring in more money than initially projected for a tax amnesty program, and uses $4 million from a recent legal settlement with Transocean, the owner of the offshore drilling rig involved in BP's 2010 Gulf of Mexico oil spill.

While public colleges would be spared, the agency that provides public health care services would take a hit.
Department of Health and Hospitals Secretary Kathy Kliebert said nearly all the $130 million reduction can be managed without cuts to services, with savings expected from an anti-fraud initiative in the Medicaid program for the poor. If the savings don't show up, however, the agency would have to slash services.

Jindal's plan also would redirect all the money Kliebert had intended to plug an internal gap in the Medicaid program to instead deal with the state's overall deficit. The Medicaid shortfall — which could reach hundreds of millions of dollars — would be left to the next governor.

"We will have to address the internal needs with the new administration," Kliebert said.

Jindal has had to close midyear deficits each of his eight years in office.

Most of the deficit this time, about $370 million, emerged when Louisiana's income forecasting panel downgraded its projections for the current budget year, to account for declining oil prices and lower-than-expected business tax collections. Another gap is from last year, when the state overspent its general tax collections by $117 million.

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