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October 28, 2010Gov. Bobby Jindal stripped $107 million in state spending Friday to close a budget deficit, hitting higher education and health care with the heaviest cuts and saying agency chiefs shouldn’t complain about the reductions.
Among the cuts, parish health clinics will lose dollars and staff, a state-run group home for the developmentally disabled will be shuttered in Terrebonne Parish and 300 health care workers will lose their jobs.
Public colleges will lay off dozens of employees and shrink student scholarship offers. Prescriptions to Medicaid patients will be further limited.
The governor’s executive order came after the Joint Legislative Committee on the Budget accepted the latest budget figures accounting for the deficit.
Higher education took one-third of the cuts, about $35 million, with the bulk hitting the LSU System. The state Department of Health and Hospitals must cut $21 million to help eliminate the deficit – and another $50 million to account for a separate shortfall in the state Medicaid program. A $12 million cut hit the social services department.
Jindal said he expects college administrators and state agency chiefs to “do more with less,” and he charged them to show “real leadership” in continuing services while facing shrinking budgets. He particularly singled out public colleges, suggesting they need to reduce their administrative costs and provide students with a better educational value.
“We need to deliver more services even while spending fewer dollars. We don’t need whining, we don’t need complaining. We need leaders to provide vision,” Jindal said at a news conference.
Several agencies, like the social services department, found other sources to replace lost state dollars. Colleges plan to offset some cuts with increased tuition.
Departments said they won’t fill vacant jobs and will limit travel, overtime and supplies. The Office of Juvenile Justice saw a drop in re-offenders, so the savings allowed the agency to absorb its cut without reducing services.
The LSU System said it will cut spending on its animal disease lab and shut down the top two floors of a new research building at its Pennington Biomedical Research Center. The Southern University System said it will lay off 36 employees.
The health department’s cuts are among the most extensive, partly because it had an internal shortfall to close on top of its share of the deficit cuts – but also because the loss of state dollars will cost the department federal matching money. DHH officials said the cuts will grow to $155 million when lost federal matching cash is included.
Health and Hospitals Secretary Bruce Greenstein said hospitals, doctors and other health providers who care for the poor, elderly and disabled through Louisiana’s Medicaid program will be paid less. Health care providers say such rate cuts chase doctors and others from the Medicaid program, limiting the care those patients can receive.
Adult Medicaid patients will be limited to four prescriptions a month, down from five, though doctors can request an override of the limit.
The public health unit in New Orleans will be closed. Private contractors will be hired to run four group homes for the developmentally disabled in Leesville, instead of the state. Funding to regional human services districts that provide outpatient mental health and addictive disorder treatment services will be cut.
The deficit is from the budget year that ended in June. Officials blamed lower-than-projected corporate tax revenue.
The state isn’t allowed to deficit-spend, so Jindal had to rebalance this year’s $25.5 billion budget to account for the problem of the last budget year. For a midyear deficit, the governor is able to cut up to 3 percent for each “budget unit” without legislative approval.
Jindal’s handling of the cuts irritated some lawmakers.
They complained that Jindal announced the cut amounts by agency only two hours after his top budget adviser, Commissioner of Administration Paul Rainwater, told lawmakers that he couldn’t detail the reductions to them and didn’t have a complete plan devised.
“Don’t blindside us. This has been the repeated approach of this administration, to give us generalities,” said Sen. Karen Carter Peterson, D-New Orleans.
After news of the governor’s announcement trickled down to the budget hearing, Peterson asked for “a public apology for blatantly being lied to” by the administration.
The deficit – which comes even after three rounds of cuts and adjustments last year – is the latest in a series of budget troubles for the state, which is bracing for a $1.6 billion shortfall for the fiscal year starting July 1, preparing for a lawsuit that could add a $200 million shortfall and still coping with a series of budget cuts in the last two years.
“This is just the beginning,” Rainwater warned.
