Now that Louisiana’s Republican-run Legislature has gotten Democratic Gov. John Bel Edwards to cry uncle, it needn’t break his arm.
Edwards made a substantial, if not humiliating, concession when announcing his planned Feb. 13-23 special session agenda to address budgetary shortfalls. He has suggested that the formal call will advance cuts to state spending, propose dipping into the state's rainy day fund and, while leaving room for fee increases, won't allow for hiking taxes.
That’s a far cry from his rhetoric a year ago when he said shuttered hospitals would turn away the sick, children with disabilities would find their ventilators turned off, and he might ax college football unless the Legislature agreed to more taxes, but without much emphasis on cutting the budget. After a regular and two special sessions, Edwards complained the $1.5 billion raised still fell $320 million short, then castigated legislators for the disappearance in two years of $1 billion in new sales taxes.
Regardless of the missed target, hospitals remained open, ventilators kept running, and crowds witnessed collegiate gridiron action on Saturdays. Then came one, then another, $300 million-plus budget deficit. In the upcoming special session, the governor suggests using $119 million from the state’s rainy day fund and budget cuts to balance the books.
In short, with this call, Edwards admitted to the bluster behind his previous claims and has curbed, at least temporarily, his desire to grow government beyond the rainy day fund’s $119 million contribution. However, during the upcoming session, a number of GOP representatives want to fight even that expansion, reasonably arguing that this use of one-time money serves as a crutch to keep government artificially inflated.
Instead, Republicans interested in fiscal discipline should allow some use of rainy-day money as an incentive to induce smarter government. Reforms in health care spending and targeted fee hikes can do the trick.
Currently, Louisiana charity hospitals deliver free care to anybody from a household below the 200 percent federal poverty Level. By changing the law to reduce this figure to 138 percent, the state saves $17 million over the remaining four months of the fiscal year.
Also, Louisiana Medicaid levies no co-payments for certain services, drugs, and emergency room visits. Charging the federally-allowed maximums over the last third of FY 2017 would raise at least $30 million— and likely more since this fee would discourage ER visitation for trivial reasons, meaning no wasted payments by the state to providers.
Finally, for years, the state has paid nursing homes for empty beds. Changing the law to abolish this largess will save a few more million dollars for the remainder of FY 2017.
With such legislation, Republicans who want right-sized government could offer at least $50 million to close the deficit. They should bargain with Edwards, telling him they would permit withdrawing $70 million from the rainy day fund if he agrees to sign their reforms into law. And they have the leverage to extract this concession, for it takes just a third of a chamber’s members to block use of the fund. Best of all, such changes would continue producing fiscal benefits into the future.
Rather than categorically deny use of the rainy day fund, fiscally conservative lawmakers should make Edwards continue, despite his ideological inclinations, to dance to their tune. That would serves to slim Louisiana's governmental obesity.