The Louisiana House approved a $24.3 billion operating budget for next fiscal year that funds higher education but still leaves health care short.
On a vote of 65-37 — five shy of the tally needed to override should Gov. Bobby Jindal veto — House members Thursday sent the government spending plan to the state Senate, where changes are expected, particularly in light of the business community’s opposition to many of the revenue-raising measures on which House Bill 1 relies.
The budget cut state government services by about $600 million and raised revenues by a similar amount. State parks, museums and prisons lost money, as did some agriculture inspection programs and efforts to spur voter registration.
House Appropriations Committee Chairman Jim Fannin acknowledged that the bill comes up short — by about $150 million — of providing for the $1 billion in services listed as necessary by legislators.
“This body has prioritized the essential needs of this state. … We have kept our essential services,” Fannin said, adding that he fully expects the Senate to find the money needed.
“I look forward to working with the Senate members to get a budget where it needs to be on the revenue side,” said Senate Finance Committee Chairman Jack Donahue, whose panel will start working at 1 p.m. Monday. HB1 officially will be entered on the Senate’s agenda at 4 p.m.
“Either we have to come up with more revenue or accept the cuts that the House has sent over. I don’t want to see health care take these cuts,” Donahue said. “I think we’ll take up the tax bills at the end of next week.”
Rep. John Bel Edwards, head of the House Democratic Caucus and a candidate for governor, asked his colleagues to vote against the budget, saying health care has not been adequately funded under the bill. “It’s not good enough,” Edwards said.
“This budget does not fully address the problems with our privatized charity hospitals, cuts to public schools or the needs of nursing home residents,” said Rep. Ted James, D-Baton Rouge, who voted against the bill.
Fannin, R-Jonesboro, started the day by telling his colleagues that they did yeoman’s work in trying times to fill a $1.6 billion gap between expenses and revenues. The budget proposal received from Jindal in February had significant cuts across the board for the fiscal year that begins July 1.
But with a combination of spending cuts and revenue-raising measures, much of those cuts were not as deep as first feared.
In the House’s version of the budget, Fannin said legislators were able to mitigate the worst of those cuts and find funding for higher education and public schools.
“This has been the legislative process at its best,” Fannin told his colleagues.
The House found about $615 million from a proposed rise in the tax on a pack of cigarettes and from rolling back some tax exemptions and credits. The business community argues the changes in tax programs amount to a tax increase for them.
A political action committee for the chemical industry is running radio ads around the state attacking one of the tax measures, and lawmakers say some of their districts have been hit with robocalls criticizing their tax votes.
Also, some of the measures don’t follow the guidelines set by Jindal to offset tax increases with comparable tax reductions.
Gov. Jindal said in a prepared statement: “We appreciate the House’s hard work moving the budget through the process today. We look forward to continuing to work with the Legislature as the budget now moves to the Senate.”
Additionally, money was found from premiums received from a sale of bonds a couple of weeks ago and from overcollections last year that were not used.
Under House rules, the state budget bill has no “one time” money — dollars used this year but unavailable for next year. But the budget includes $439.7 million that won’t be available next year, which means if unchanged, the next governor will need to replace those revenues in his first budget.
State Rep. Bret Geymann, the Lake Charles Republican for whom the rule is named, voted against the budget because of the way the “one-time money” rule was interpreted.
Almost immediately as debate began, Democrats started pointing out that the money was still short for LSU medical schools, which carry unexpected costs from privatizing the state’s charity hospitals.
Fannin said the priority was to fund colleges and universities, as well as funding for the state’s public schools.
The private firms contracted by LSU to administer the state’s charity hospitals would receive less money than needed to provide the same level of care, particularly in the costs for treating patients who can’t pay and don’t have insurance.
Also, the privatization deals require the LSU medical schools in New Orleans and Shreveport to pay for pensions and other “legacy” costs. The medical schools say the additional costs endangers their economic viability.
The House spent about an hour debating another effort to expand the Medicaid rolls to include about 300,000 people who make too much money to qualify for the state-run health insurance plan but too little to buy their own coverage on the private market.
Edwards said that if Louisiana joined that key part of President Barack Obama’s Affordable Care Act, the state would save $52 million that could be directed to the private administrators contracted to run the state’s charity hospitals.
Democrats have tried multiple times over the past few years to expand Medicaid. The House shot down the effort on a vote of 41-56, then approved the budget for the state Department of Health and Hospitals.
Tears welled in the eyes of Fannin as representative after representative congratulated him. It was the last budget bill to be presented by Fannin, who is term-limited.
Tyler Bridges, of The Advocate Capitol news bureau, and The Associated Press contributed to this report. The Legislative Fiscal Office analysis of the state budget bill is available at http://lfo.louisiana.gov/files/publications/HB%201%20Engrossed_LFO%20 Report.pdf.