For weeks, leaders of Louisiana’s colleges and universities and the state’s health care providers have been warning of the harm that would be inflicted if lawmakers didn’t raise the money needed to prevent deep cuts in the services they offer.
The House approved $664 million in higher taxes Thursday, and House leaders promptly said they would direct most of that money to the higher education institutions to eliminate their projected budget shortfall. College and university presidents just as promptly expressed their gratitude.
Now health care is on a limb by itself, for now anyway.
The decision by House leaders to fund higher education next year means that the state’s health care system is at least $200 million short of the money needed to keep providing the current level of service for patients.
That not only is putting at risk a health care system that already ranks among the worst in the country but also threatens the agreements Gov. Bobby Jindal made with private companies to manage Louisiana’s public hospitals.
Rupturing those deals would cause havoc with health care for poor children and their mothers, the developmentally disabled, the working poor who don’t have health insurance and the elderly living in state nursing homes — and that would cause a ripple effect throughout the entire health care system.
“The state and the governor had us enter into public-private partnerships with the understanding that the partnerships would not jeopardize the corpus of our institutions,” said David Callecod, president and chief executive officer of Lafayette General Health, which manages the largest hospital in Acadiana.
“If the funding does not come forward and that threatens the institutions, we’d all have to weigh the difficult decision whether to stay in.”
If enough state money is not found, Callecod said, the hospital operators could decide soon after the legislative session ends on June 11 to exercise their right to opt out of the agreements.
“We would not take that decision lightly,” he said.
As part of the overall $200 million shortfall for health care, the state needs $56 million to cover the health insurance and retirement costs of former employees at the LSU medical schools in Shreveport and New Orleans, as well as to pay for the continued upkeep of those institutions.
If that money isn’t found, those institutions could be saddled with such burdensome costs that they could file for bankruptcy, putting them on the path to losing their teaching accreditation, said Sen. Fred Mills, R-Breaux Bridge.
House Speaker Chuck Kleckley, R-Lake Charles, and Rep. Jim Fannin, R-Jonesboro, who chairs the Appropriations Committee, said they would use the $664 million to fully fund higher education when the panel meets on Monday to settle on the Legislature’s first draft of next year’s budget. Once passed in committee, the budget will be heard on the House floor on May 21. From there, the Senate would consider the budget.
Besides health care, legislators don’t yet have enough funding for the continued growth of K-12 public schools statewide or for the state’s museums and parks, which would close or have their hours reduced next year.
To be sure, as several legislators pointed out Friday, the legislative session won’t end until June 11, so they have another month to find the money for health care.
With the state Revenue Estimating Conference expected to meet in the coming days, officials might determine that tax collections will be higher than previously forecast. Jindal’s staff also might find more money one way or another.
“There’s a lot of the game to be played,” said Sen. David Heitmeier, D-New Orleans, who nonetheless said that as things stand now, “the cuts would be quite dramatic.”
Heitmeier and Rep. Walt Leger, D-New Orleans, said they favor shifting some of the public dollars away from higher education institutions to public health care.
A major issue for both of them is whether the state will fully fund the new hospital slated to open soon in New Orleans. That facility needs $33 million in state aid, Leger said. The $33 million would draw down another $55 million in federal aid for a total of $88 million.
“It’s imperative that New Orleans gets its funding,” said Mike Michot, a former state lawmaker who is now the executive director of the Public-Private Partner Alliance, which represents nine privately managed state hospitals.
Several Capitol insiders said they believe House leaders left health care alone on a limb to create pressure for the Legislature to expand Medicaid to cover the state’s 400,000 uninsured working poor — a proposal that Jindal and the Republican-controlled Legislature have rejected so far.
Kleckley is sponsoring House Concurrent Resolution 75, which would allow private hospitals to pool their dollars and use that money to attract additional federal Medicaid dollars to provide care for uninsured patients.
Capitol insiders also suggested that House leaders left health care unfunded to cause hospital and other health care lobbyists to rev up their considerable sway to pressure anti-tax lawmakers to approve more tax measures.
The health care lobbyists are promising to make their voices heard.
“We will continue to be at the Capitol for the rest of the session,” said Jonathan Chapman, executive director of the Louisiana Primary Care Association, which represents 30 community health centers that serve 300,000 mostly poor and uninsured patients per year.
The House Ways and Means Committee is scheduled to hear several tax measures on Monday, including House Bill 253 by state Rep. Jay Morris, R-Monroe, which would reduce the amount of excess federal itemized deductions taxpayers could claim to 80 percent of their value. The measure would raise $61 million per year.
Morris also is sponsoring House Bill 768, which would raise $231 million by eliminating tax breaks from 1 cent of the state sales tax. Legislative leaders decided not to hear his bill as planned on Thursday because it lacked the 70 votes needed in the 105-member House.
Rep. Joel Robideaux, R-Lafayette, the architect of the tax package voted on Thursday, told his colleagues as the day began that they faced a choice between continuing to grant generous tax breaks to businesses and providing the state aid needed for Louisiana’s colleges and universities, health care system and roads.
During most of the 11 votes on Thursday, 25 to 35 lawmakers did not heed Robideaux’s call that they trim tax breaks for businesses and also some higher-income individuals.
Most of them were Republicans, including Rep. Ray Garofalo, R-Chalmette; Rep. Paul Hollis, R-Covington; Rep. Mike Huval, R-Breaux Bridge; Rep. Barry Ivey, R-Baton Rouge; Rep. Joe Lopinto, R-Metairie; Rep. Sherman Mack, R-Livingston; Rep. Kevin Pearson, R-Slidell; and Rep. Rogers Pope, R-Denham Springs.
Several Democrats also voted consistently against the big-money tax measures, including Rep. Neil Abramson, D-New Orleans; Rep. Robert Johnson, D-Marksville; Rep. Stephen Ortego, D-Carencro; and Rep. Sam Jones, D-Franklin.
Now that the House has taken the first crack at raising taxes, attention will shift to the Senate, which could raise more money by amending any of the 11 tax bills passed by the House on Thursday.
“Now it’s time for the Senate to step up to the plate and get the rest of it done,” said Sen. Sherri Buffington, R-Shreveport.
Follow Tyler Bridges on Twitter @TegBridges. For more coverage of the State Capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politicsblog/.