Thousands of college students could lose scholarships they get from Louisiana’s popular Taylor Opportunity Program for Students and state-funded health clinics could be shuttered, if lawmakers are unable to find another way to fill the looming $750 million budget shortfall.
The state budget is still several weeks away from being finalized, but Gov. John Bel Edwards’ administration offered insight into the latest maneuvering with a presentation Tuesday on the latest version of its proposal for the budget that begins July 1. Edwards, who later described the outlook and cuts involved as “very nasty,” has been pushing for lawmakers to agree to raise additional revenue in a second special session later this year.
“I wish I had better news, but I don’t,” said Edwards, a Democrat who took office Jan. 11. “We’re going to live in the real world.”
Among the most significant cuts the state faces: A $408.7 million reduction in state funding for the state Department of Health and Human Services that could force private hospital partners to cancel their public contracts and a $183 million hit to TOPS scholarships.
About 17,400 students would receive TOPS under the new scenario — down from more than 51,000 students in the current year.
Under the current policy that would be implemented under a TOPS shortfall, awards would go largely based on student test scores, with some set aside for students based on financial need.
Monty Sullivan, president of the Louisiana Community and Technical College System, said no community college students would get the award under the proposed change. “We have students who perform and have earned the right to that award,” he said.
TOPS was created as an incentive for Louisiana high schoolers to stay in the state for college and as a pathway for students who otherwise would not be able to afford to stay in school after they finish the 12th grade. Under the current standards, students have to earn at least a 2.5 GPA on an outlined high school curriculum and score at least a 20 on the standardized ACT test. TOPS generally covers tuition but doesn’t include fees and other costs of attending college.
Under Edwards’ proposal, TOPS would get about $110 million in the coming year — about a third of the $300 million projected to fully fund the program. More than half of that money would come through tobacco settlement dollars that must go toward TOPS, while the state budget would foot $50 million toward the program’s costs.
According to Edwards’ administration, such a change would largely limit the program to students who make 26 and higher on the ACT exam, with a few recipients who score 25.
Bills at the State Capitol this session seek to rein in TOPS costs through other methods, including limiting the size of awards but keeping thresholds lower.
Other cutbacks the latest plan identifies: Higher education would take a $46.1 million hit; Corrections would be cut $34.1 million; the judicial branch would face a $15.9 million cut; and the legislative budget would be slashed $7.3 million.
“There was one guy who could do the loaves and fishes trick. It ain’t me,” Edwards told legislators during a rare appearance before the House Appropriations Committee.
The state Legislature, during a special session earlier this year, agreed to several tax hikes, including raising the state’s sales tax. The effort reduced the shortfall from more than $2 billion to its current $750 million estimate. Under state law, legislators can’t raise taxes during this year’s regular session, which ends June 6.
Edwards hasn’t revealed specifics, but he has indicated he would like to call lawmakers back into special session shortly after the regular ends this summer.
“Make no mistake, we need additional revenue,” Edwards said.
He told legislators Tuesday that he’d be calling one, “as soon as we can. As soon as we know what we need and as soon as we can be successful.”
He also told the budget panel that he is looking to a newly formed task force to craft more long-range solutions.
“We need a tax structure that produces revenue that is stable and predictable,” Edwards said.
The plan he offered up Tuesday had to be balanced based on projected revenue available and can’t be contingent on any money that may be raised in a second special session.
Edwards noted that DHH still would generate a savings of about $184 million through the expansion of Medicaid under the federal Affordable Care Act. Edwards signed an executive order to expand Medicaid shortly after taking office, and the expansion is supposed to take effect July 1.
Edwards said the state would have to come up with $70 million more to keep hospital agreements in Bogalusa, Houma, Alexandria and Lake Charles. It largely would be up to the public-private partners to determine what services are cut, and leaders cautioned that they are still working through the process.
“We don’t want any of this to happen,” DHH Secretary Dr. Rebekah Gee said. “We’re relying on you all to come back and raise money in another special session.”
House Appropriations Chairman Cameron Henry, R-Metairie, repeatedly stressed that he would like to see the Legislature better prioritize its funding. He also said he wanted to see the budget task force’s recommendations that are due to the Legislature in September.
“We have the ability to fully fund TOPS if we choose,” he said. “It comes down to priorities amongst everyone.”
He also said he expects changes from Edwards’ proposal.
“There could be some other cuts throughout,” Henry said. “We could maneuver some things around.”
Other legislators also pressed for long-range budget solutions beyond raising taxes.
“A lot of us believe that we need to look at the structural things we are doing wrong and fix those first and see where we come out on the revenue side,” Rep. John Schroder, R-Covington, said.
Edwards said the gravity of the situation led him to present his own budget recommendation and answer legislators questions, breaking from a tradition of administrations sending surrogates to handle such presentations.
“Hard decisions have to be made and there are critically important institutions that aren’t going to be funded well, and I don’t want to hide up here while other people go out and deliver that news,” he said. “I want to make the case of why we need a second special session and additional revenue.”