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Public colleges are spared major cuts

By Jan Moller

BATON ROUGE — Gov. Bobby Jindal will recommend eliminating 4,000 state jobs and cutting the take-home pay for thousands of other state workers but plans to spare public colleges and private health care providers from significant cuts when his budget proposals are presented today.

The budget also will seek to cut state support for charity hospitals while increasing money for the TOPS college scholarship program, Jindal said.

Although the details of Jindal’s $24.9 billion plan will be presented to a joint meeting of the House and Senate budget committees, the governor provided a broad-stroke preview for members of the news media Thursday. The budget debate is expected to be the focal point of the two-month legislative session that gets under way April 25.

Although state revenues are on the upswing, Louisiana faces a $1.6 billion shortfall in the budget year that starts July 1 because of rising state costs of providing Medicaid services and the expiration of the federal economic stimulus program that pumped up health care and higher education programs the past two years.

To plug the gap, Jindal will propose about $1 billion in various cuts, savings and “efficiencies.” The rest of the shortfall will be made up mostly through $474 million in one-time revenue, including proceeds from the sale of state three state prisons and other assets. State financing for public schools would remain unchanged, Jindal said.

“We think this is the fiscally responsible path,” Jindal said, adding that he would veto any measures that seek to raise taxes or suspend existing tax breaks.

Public colleges and universities would get additional state dollars to make up for the loss of stimulus financing, and their budgets would remain flat next year when money from tuition increases is factored into the mix. That marks a significant shift from last fall, when colleges were bracing for cuts of as much as 35 percent of their state support.

Private doctors, hospitals and other providers that treat low-income Medicaid patients also would not see their rates reduced, nor would any Medicaid patients lose eligibility for services, Jindal said. But the Louisiana State University charity hospitals would see a 4.5 percent cut.

The federal government’s share of Louisiana’s Medicaid costs is projected to drop from 80 percent to 69 percent next year, which translates to a $429 million cost increase to the state if it wants to maintain the same levels of service. But part of that will be made up with $266 million in new federal money for hospitals that the state expects to receive through a loophole in the Medicaid program.

Although there will be much haggling about the details in the months ahead, the proposals outlined Thursday belie the idea that 2011-12 would be a budget “cliff” for state government where health care and higher education would take deep cuts.

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