Governor Jindal proposes new Louisiana budget

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February 28, 2013

Louisiana

By Phil Sletten

BATON ROUGE, Louisiana: Louisiana Governor Bobby Jindal (R) proposed his Executive Budget for fiscal year 2013-2014. In the proposal, the governor's office downplayed the major changes to the tax code, noting that they were revenue neutral and emphasizing that taxes were not increased. The proposal caught a significant amount of attention for its use of "one-time" funds to balance the budget.[1]

In total, Jindal and his budget officers had to close a roughly $1.3 billion budget deficit.[2] To do this, the budget uses $424 million in revenue from sources that are only valid for this budget, and thus cannot be sustained into the next budget, to continue funding higher education. Jindal's proposal calls for a $75 million increase in tuition fees as well as the use of one-time money to cover short-term costs. The budget also relies on $781 million in savings from privatizing eight of the Louisiana State University system's ten hospitals. Only five agreements have been announced, and none of those are final yet.[3]

The budget proposal also seeks to sell state assets and earn $47 million. Jindal administration officials argue that the state has a smaller footprint now than in past years, and many of these properties would be used more efficiently in the private sector. Budget officers also noted that buyers had been identified already for most of these properties.[4] At least one property listed was slated for sale in last year's budget as well, but was not sold.[5]

The budget cuts nearly all state agencies, with particularly deep cuts in the Executive Department, the Secretary of State's office, the Attorney General's office, public safety services, and the Department of Economic Development. Louisiana State University's health care services are cut by over 90 percent, corresponding with the privatization of hospital services.[5][6] In terms of jobs, this budget calls for shedding just over 10,000 employees from state government, with the majority of those coming from the state's health care services.[7] Only the Department of Corrections and the Department of Natural Resources would receive more funds this year than in the last, if this proposal were to become law.[6]

Many lawmakers expressed concern about the proposed budget's affect on state services, especially health care services to the poor. Changes in Medicaid and the near elimination of funds for most of the LSU hospital system have made some lawmakers, especially Democrats, concerned about the implications of the budget for state services.[5][3] On the other side of the political spectrum, the "fiscal hawks," a group of mostly Republican House members pushing for more responsible budgeting practices through the Louisiana Budget Reform Campaign. The group, which has not gained any followers in the Louisiana State Senate, released an analysis critical of the proposed budget's revenue sources.[8]

A new state budget must be approved by the legislature before June 6, 2013.[9]

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