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20.5.08

Some LA education spending likely to merit retention

As noted yesterday, Louisiana House budget-trimming excised $52 million in state spending (matched with $131 million of federal matching reductions) in health care which can be handled if done properly. The remainder of the $70 million reduction mainly lies in the area of education, and those expenditures perhaps should stay.

The Senate Finance Committee began to lay the groundwork for this chamber’s dealing with HB 1, the bill that directs state operational spending in most areas, taking testimony from Commissioner of Administration Angèle Davis who asked that most of the cut money be restored. Almost simultaneously at different venues, other state officials and interest groups were tossing out their own views about the impact of these cuts.

Some was self-serving piffle. Nursing home interests, who complained about how their reimbursement rates might not increase as much as they would like that would remain among the lower in the nation, of course conveniently forgot to mention that per capita spending on Louisiana nursing homes is about the highest in the nation and the state has almost the most excess capacity. These inefficient drags on the Louisiana taxpayer (which hopefully will be rectified as the state moves away from its institutional bias in provision to one modeled on community-based care) were created as the industry for decades successfully lobbied for the vast bulk of state money to be spent on long-terms care (so that now 85 percent of its revenues come from that source) and it blithely expects that gravy train to continue to make up for its poor forecasting.

Other defenses were much more reasonable. Education officials pointed out how funds reductions would hamper strides to improve education quality in the state, from pre-kindergarten through graduate schools (although marred somewhat by some fantastically stupid remarks about gun control on campuses, but that’s another story). If done right, the payoff for these could merit the expense.

Most intriguingly, however, is that part of the cuts seems to put on the back burner Gov. Bobby Jindal’s most ambitious goal concerning universities – realigning funding on the basis of performance indicators. Not surprisingly, higher education wants to have funding continue at the present level – matching the “formula” computed from the average of its Southern peers – without having any mechanism for accountability which is the purpose of the indicators.

Making things even more interesting is that subtle planned budget changes may run the state afoul of the provision that caps state spending increases at the same rate personal individual income growth rises, strengthening the original case of the House that it wanted to reduce spending to curb reliance on “one-time” funds sources for recurring expenditures. Jindal’s budget was well under that figure but contemplated moves could change that, such as plans to appropriate $307.1 million into a “megafund” to attract large employers but shifting up to $100 million out if that remains on Oct. 1 for other purposes could bump up against the cap. In light of this, Davis admitted some budget cutting may have to stay.

House desires and spending cap realities argue that the Senate won’t do a whole lot of restoration to the budget. Where it does happen, probably it will happen mostly in the area of education, and towards the more basic levels. Regardless, dealing with the budget to date also is notable for something else: it’s ahead of the typical schedule by a couple of weeks. One can dream therefore that its debate will be deliberative – especially on the conference committee end where often decisions about what to keep, throw out, and even add have been made in less than a day – meaning some extra rationality may be injected into a process that typically largely, if not totally, lacks it.

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