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Budget Troubles Overflow Before Runoff

Despite  the administration's efforts to keep the lid on the simmering story of the state’s budget anguish through election season, some of the details are boiling over.

“Whoever ends up becoming the next governor’s going to have a mess to clean up,” says Steve Spires, policy analyst with the Louisiana Budget Project. He adds that healthcare is one of the biggest messes.

“We’ve been trying to find these short term solutions, whether it’s up-front lease payments with privatization, whether it’s trying to raid different pots of money. We don’t have a sustainable way to fund health care.”

Louisiana’s Department of Health and Hospitals has admitted it’s more than a half billion dollars in the red for the current fiscal year. That number does not include $189-million the feds want returned, due to disallowances from the LSU hospital privatization deals. In addition, LSU is suing to dissolve its north Louisiana partnership, adding to the overall fiscal uncertainty.

What about Medicaid expansion under the Affordable Care Act, you ask?

“You look at other states, they’re saving tens of millions of dollars with Medicaid expansion,” Spires says.

Yet Louisiana’s Legislative Fiscal Office just issued an opinion on the plan put forth by House Speaker Chuck Kleckley, during the session this past spring. It would have the Louisiana Hospital Association put up the state match for Medicaid expansion. The LFO says HCR 75 is flawed and won’t save the state much money at all.

Spires disagrees, saying it would help solve the problem most hospitals face now, having to eat the costs of treating the uninsured.

“Patients who right now don’t have a payment source, they would have a payment source,” Spires explains. “And each hospital – whether it was one of the Charity partner privatizations, whether it was community hospital, you know, any hospital -- when they saw that patient would get paid.”

The magnitude of the problem may become clearer as soon as the week of the November 21st runoff election. The Revenue Estimating Conference meets Monday, November 16th, to adjust the state’s income forecast. It will undoubtedly be reduced, as oil has been trading at nearly $20 per barrel below the official state price projection. And the Joint Legislative Budget Committee meets Friday, November 20th, to acknowledge the total anticipated shortfall.