All the fretting about a $100 million last-minute reduction that only increases Louisiana Department of Health spending by $146 million for next fiscal year, as Republican state Sen. Sharon Hewitt suggests, is unwarranted and no corrective should be in the offing.
This week, a couple of Senate panels met unanticipatedly in the aftermath of the regular session’s close to sort out the line item in the general appropriations bill HB 1 triggering this, an insertion which caught by surprise legislators and Democrat Gov. John Bel Edwards. The latter warbled about how he would do everything he could, including casting a line item veto on it, to prevent the roughly half-percent decrease it pared, while a number of state senators listened with furrowed brows as allegedly how, when considering leveraged federal funds involved, this really meant an over $700 million loss in budget authority.
Of course, that figure was scare tactics reminiscent of what Edwards threatened would happen in 2016 when trying to muscle through a sales tax increase still haunting the state, that without taking more from the citizenry people with disabilities would be left to beg on street corners, grandparents would be kicked out of nursing homes, and, by the way, college football would cease. Unfortunately, many, including Republicans who should have known better, bought it hook, line, and sinker, then and now.
Not Hewitt this time, who noted, “I don’t believe we are accurate enough in our ability to forecast to be wringing our hands over $100 million.” She’s right, given the wide variance expected in Medicaid disenrollment costs and the impact of disenrollment that could have the former that could be adjusted to go lower and the latter almost certainly underestimated in money saved from getting ineligible people off the books, as well as the considering the consistent overshooting in the last couple years of forecasts of nursing dollars paid out on waiver services because of a nursing shortage caused by overreaction to the Wuhan coronavirus pandemic that jacked market rates sky high, leaving fewer nurses wanting to work for waiver clients – an imbalance the department can’t correct because by law it continuously must shovel more money to overutilized nursing homes.
Naturally, Edwards takes any chance to grab dollars from the people where he can in trying to redistribute these to suit his ideological and power-building needs, so his first instinct will be to cast a line item veto of the curbed $100 million – but then he’ll have to find other items to strike to match. That may not be so easy.
He could veto bills that have tax breaks or additional costs or paying off judgments, but he already has signed a number of these into law or many don’t add or subtract much or don’t take effect until after this budget year. In fact, the two biggest items out there still needing disposition ironically are authored by GOP state Rep. Tanner Magee, who helped lead the charge to bust the state’s spending cap, totaling $41.5 million. Adding in all others, including of his political allies, gets barely over half the needed sum.
That means he has to cut $50-100 million in line items in HB 1, but that also isn’t easy because those zero out entire programs. For example, it has only $31 million or so total in local expenditures. Transfers are allowed, but only within the same department, so that wouldn’t help in this instance. And a preamble statement already forces a $95 million cut government-wide.
But the easiest, and in policy terms wisest, course would be to make the cuts within the department. The most salutary and obvious would be to lop off Medicaid expansion. The last published figures – which with disenrollment wouldn’t be much more than what will come next year – showed it cost Louisianans $451 million, servicing a population where a third to half of recipients already had insurance and others had access to plenty of other government benefits leaving them with an ability to pay for health insurance, if only they would choose to do so. But being that fiscal albatross is Edwards’ pride and joy, don’t look for this solution not only to the problem but also to enable the increasing of waiver nursing rates and leaving some change for future budgetary downdrafts estimated to slice revenues by nearly $1.5 billion over the next three years.
Instead, expect a combination of all of the above – excising the $100 million deduction line item, kayoing a few bills, issuing a few HB 1 line item vetoes, and expecting some efficiencies in health care spending. That combination will conclude as another lost opportunity to bring more sanity to state spending and empowerment to its people.
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