Public healthcare to absorb $70 mil in cuts, Higher Ed spared

Paul Murphy examines the issue.

NEW ORLEANS - Louisiana Governor John Bel Edwards warned additional state budget cuts would be painful.

Thursday, he announced public health care would shoulder the burden of $70 million in spending reductions, needed to balance this year's state budget.

That's the size of the budget shortfall for the current fiscal year even after Legislature raised $1.26 billion in temporary and permanent taxes during a special session earlier this month.

"These cuts certainly are not easy to make, but they will help finish out, our responsibility to the people of Louisiana this year to balance our budget and to prioritize a more stable government going forward for our citizens," Edwards said.

Here's how the state department of health and hospitals will absorb the cuts: $30 million will come from savings associated with lower-than-expected Medicaid spending; another $30 million from a 1.5 percent cut in DHH contracts, including the public private partnerships at state hospitals; and another $10 million in department efficiencies ordered by the Edwards administration.

University Medical Center's private operator LCMC-Health said the 1.5 percent cut to its contract amounts to about $6.4 million over the next three months.

The hospital released a statement which read in part, "The State and legislators had to make difficult decisions to find a solution to the budget deficit. A $6.4 million cut is significant, but it is a better outcome than the previously proposed cut which would have been catastrophic." 

Sen. Wesley Bishop, D-New Orleans maintains that cuts are not the answer to the state's budget woes.

"The whole process itself is something I think they need to take a look at," Bishop said. "The fact that whenever we're short on money we always look at higher education and healthcare is something that's unfortunate."

Higher education was spared in this round of cuts.

But, earlier this year, colleges and universities were forced to absorb a $28 million dollars hit because of a funding shortfall in TOPS, a state scholarships program for Louisiana residents.

"I'm glad that higher education didn't take any cuts this particular time, but to be quite candid, the last 7 to 8 years, they were the ones that were primarily hit," Bishop said.

Southern University of New Orleans Chancellor Victor Ukpolo said additional reductions to his school, on top of a more than 60-percent cut in state general fund spending in recent years would have caused layoffs and furloughs on campus.

"It's been very, very difficult for the last 8 years," Ukpolo said. "We've been trying to just keep the University open. Our backs are against the wall, 100%."

None of the new cuts address the expected $750 million dollar budget deficit for the next state fiscal year beginning July 1.

"There is still a lot of work to be done," said Edwards who has talked about the possibility of a second special session following the ongoing regular session of the state legislature.

Sen. Bishop supports the idea.

"I think we've cut as much as we can possibly cut," Bishop said. "What I would like to see is one, doing away with as many exemptions as we can and only keeping the ones that are the most important ones and then raising the revenue that's necessary."


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