Last week, Louisiana’s Commissioner of Higher
Education Joseph Rallo echoed
a remark investigated
on several occasions in this space and which provides an alternative
formulation in how to deal with the state’s schizophrenic Taylor Opportunity
Program for Students currently under budgetary fire.
TOPS, with its extraordinarily mediocre standards,
does not operate as a true scholarship program because of that but instead
mimics an entitlement. For that reason, it features a high default
rate and uses taxpayer dollars inefficiently. Modest enrollment increases
over the years since its institutionalization almost two decades ago and
substantial tuition increases that brought up Louisiana from close to the
bottom of senior institution average tuition among the states about
a dozen places, although still lagging the national average by over $1,500
annually, have swelled TOPS’ cost, making it a target to cut in times of
budgetary stress.
Democrat Gov. John Bel Edwards has
proposed that – not as a sincere means to cut the cost of government but as
a cudgel to scare lawmakers into a tax hike. As currently defined in statute,
that reduction would have the effect of raising dramatically TOPS’ standards
and, as touted in this space, would have the beneficial impact of making it a
genuine scholarship program, eliminating most of its inefficiency in resource
use.
Because it goes against the grain of Louisiana’s political
culture, more than ever legislative Republicans should take the budget
deal Democrat Gov. John
Bel Edwards has offered.
In his fiscal year 2017 budget version 2.0,
Edwards performed some considerable slashing to erase a projected nearly $800
million shortfall from current spending levels. In doing so, it picked up a
particular Janus-like quality: both a serious document and a political one,
designed to accomplish Edwards’ long-term goal of growing government through
tax increases, in that it concentrates cutting in areas that challenge the
prevailing populism still a part of the state’s ethos.
A little over half of reductions came in health
care, centered on the possibility of “closing” four of the nine charity
hospitals still in the state’s portfolio. More precisely, that would mean the
state dissolves contracts with operators that pay them above Medicaid rates for
care delivered to individuals with family incomes of less than 200 percent of
the federal poverty level.
Louisiana
need not abandon the idea of asking Medicaid patients for some
reimbursement to arrest wildly increasing costs, but must design the program with
an understanding of the inculcated culture of poverty in order to make it
effective.
The insurance industry for decades has designed coverage
where a user of health care makes small payments at the time of service, but
only recently has that crossed over from private to government insuring. The goal
remains the same regardless of sector: create a disincentive for the consumer
to access health care frivolously while lowering the insurer’s exposure
slightly. With that in mind, legislators
filed a number of bills for the regular session of the Louisiana
Legislature, requirements in Medicaid co-payments both to put a dent the huge
cost increases coming from program expansion and to inspire increased personal
responsibility from clients.
However, in the case of public-backed insurance,
unlike with private insurance where overuse turns back the inefficiency onto
the ratepayer utilizing the service with an increase in premiums, the exposure
falls on the taxpayer, not the user who pays little or no taxes. Thus, policy-makers
eye the co-payment requirement not just as a method to connect the client’s
demand to the cost of the service in the hopes of limiting consumption for
trivial reasons or in inefficient ways, but also as a way to raise some funds
to ameliorate the impact of the transfer of wealth forced to fund the program.
Louisiana’s Department of Corrections might want to
rethink its budgetary poormouthing strategy, especially when there exist realistic
solutions to cuts costs that take only the political will to implement.
Last week, Secretary of Corrections Jimmy LeBlanc –
the only holdover selected by Gov. John Bel Edwards to
continue in the same cabinet job from former Gov. Bobby
Jindal – testified
to a House of Representatives panel that a projected cut of 10 percent in his
department’s budget would lead to any or all of closing prisons, releasing
prisoners early, or cutting across the board. He described the aftermath of
this as potentially deleterious to both public safety and prisoners, calling it
“dangerous.”
While policy-makers always should go alert in
judging validity of information when hearing such drastic claims – LeBlanc threw
out numbers such as releasing over 5,000 of the state’s over 37,000
incarcerated about equally distributed between state and local facilities and
closing five of the state’s nine prisons to make up
the roughly $65 million – even milder protestations would draw some
deserved skepticism given the recent controversy over some suspicious personnel
practices in DOC. Former Louisiana State Penitentiary head Burl Cain, a former business
partner of LeBlanc’s, and one of his relatives engaged
in wasteful, if not fraudulent, practices apparently legal only because of the
exceptional laxness of internal DOC policies. Additionally, Cain will
receive extensive retirement benefits that in a minor way would have alleviated
the contemplated budget cut.