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Sunday, November 11, 2018



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Public colleges get $18M cut in Edwards deficit-closing plan

Public colleges get $18M cut in Edwards deficit-closing plan

BATON ROUGE, La. (AP) — College campuses that escaped cuts after years of financial slashing are once again on the chopping block, with Gov. John Bel Edwards planning an $18 million reduction to higher education to help close a state budget deficit.

The cut, which equals about 2 percent of colleges' general state financing, is contained in a package of budget adjustments sought by the governor to offset a more than $300 million gap left from the last fiscal year.

Edwards is proposing to reshuffle some financing, tap into available pots of money and make cuts. The largest piece of the plan involves delaying $152 million in payments to health providers that care for Medicaid patients. The payments will be shifted into the next fiscal year.

Legislative leaders were briefed on the proposal ahead of a Friday presentation to the joint House and Senate budget committee. All but $36 million of the cuts can be made without legislative approval.

Senate President John Alario, R-Westwego, said the deficit-closing plan is "not going to cause any devastation to higher education and health care."

"It certainly eases the pain in the distribution of it," Alario said.

House Appropriations Chairman Cameron Henry, R-Metairie, said more debate was needed about individual parts of the plan.

Statewide elected officials would be spared cuts, as would the transportation, prisons and tourism agencies. Reductions would hit the education, veterans affairs and public safety departments, along with the governor's executive department.

After all the reshuffling, the health department would take a net state cut of $12 million, a less than 1 percent hit to its state financing — and would postpone $152 million in payments to service providers in the Medicaid program.

Former Gov. Bobby Jindal pushed back a similar payment last year to close a budget gap. The Jindal administration tried to describe the maneuver as an "anti-fraud" initiative, but the delay was criticized as a gimmick to avoid making tough financial decisions.

Edwards and lawmakers had planned to get the payments back on track — paying 13 months of Medicaid bills in one year — but that idea will be scrapped.

"I think members would obviously prefer to get that Jindal payment over with," Henry said. "With the cuts we have before us, it's probably an option that members may be getting a little bit more comfortable with. But I think some more conversation needs to be had."

The deficit is from the budget year that ended June 30, when state income fell below projections. Further shortfalls are expected in the current 2016-17 budget year, because tax collections and other sources of state revenue aren't coming in as expected.

The governor's chief budget adviser, Commissioner of Administration Jay Dardenne, asked the Bond Commission's staff on Thursday to look into whether a state debt refinancing could help Louisiana save money.

Dardenne said the Edwards administration hasn't decided if it will pursue the maneuver. Henry resisted the idea, saying the state needs to start working on long-term structural fixes and the "expenditure problem."

Louisiana refinanced debt earlier this year to generate $82 million in quick cash for the budget. The decision added long-term costs to state debt repayment. At the time, the state's financial adviser recommended against doing the same maneuver again.

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