Curb Edwards legacy to close looming cliff

Some federal government relief on the issue of Medicaid, as well as some overdue diligence in the program, could help Louisiana to address tightening budget conditions.

Last week the state’s Revenue Estimating Conference essentially reaffirmed projections for the next few fiscal years. With tax cuts coming unless the Legislature lengthens the duration of the sales taxes to roll off, revenues are projected essentially to remain flat for fiscal years 2028-30. That means unless the Legislature reduces spending and/or consents to use of the Budget Stabilization Fund at least in FY27, the general fund budget may go into deficit given the impact of price inflation.

Use of the BSF may not be all that bad, as it sits at a near-record amount, but legislators can’t use it two years running. Happily, final budget production last year by the federal government invites reductions in Medicaid spending, and as does better diligence by states.

As previously noted, reforms encapsulated in that budget process will give the states strong incentive to cut back on this spending by the federal government limiting extra payments to states to encourage reimbursement rates for Medicaid to be only at the same level as for Medicare. They also create disincentives to levy taxes on providers that are used as a device to grab more federal dollars, which if applied to Louisiana would make the presumed deficit a bit worse independently of the fewer dollars spent on Medicaid because of lower rates.

But the state has to help itself, and over the past several years Louisiana has offended among the worst in refusing to do this, at least up until 2024. Research shows that since 2019, under the most plausible take-up rate (the proportion of Medicaid expansion-eligible clients who do enroll in it), the state has one of the highest rates of ineligible recipients, a shocking 62 percent, with in that period the stunning highest per capita upwards change (nearly doubling) of all the states, in that final term of Democrat former Gov. John Bel Edwards who practically begged anybody and everybody to sign up except the obviously wealthy.

Worse, this includes even the first year of unwinding after the artificial inflation of roles during the pandemic period. Not all of this comprised people flat-out ineligible for Medicaid; many eligible under regular Medicaid likely were misclassified as expansion-eligible, and given the perverse incentive that the expansion population receives a 90 percent federal match while those with lower incomes and sicker receive get matched about 25 percent lower in Louisiana, states pay less by carelessness in categorizing recipients.

In part, that explains why Louisiana in 2024 paid out only an estimated $90 million extra. But if all of the ineligibles were otherwise qualified in no way – and remember the winding-down already largely had been accomplished by the end of that period who were all ineligible under regular standards – it would have been closer to $250 million. It’s not difficult for that figure to be zero – several states managed that, and neighboring Oklahoma had a misclassification rate of only one percent.

 Using data for the upcoming 2028 rate equalization assuming Louisiana will make up two percent of the total Medicaid population nationally and its having a (among the highest of states) regular reimbursement rate of 65 percent (it varies among states), the state with great diligence in eligibility determinations could save $600 million annually by then. That would solve for and then some any predicted budgetary shortfall. It’s low-hanging policy fruit and should be pursued.

Coming Medicaid reimbursement changes good for LA

The good news is the alleged bad news about Medicaid changes is good news for Louisianans.

One reform encapsulated in last year’s One Big Beautiful Bill knocks out a loophole that disfavored Medicare patients over those on Medicaid, increased the number of less-valuable interventions, and distorted private sector pricing. At the tail end of the Democrat Pres. Barack Obama Administration to encourage greater Medicaid enrollment including sucking in states to accept expansion (which Louisiana foolishly followed), the federal government began subsidizing state Medicaid plans to boost rates. Often, states reimbursed at rates below commercial charges and even Medicare’s, which could reduce the supply of providers that would lower the amount of care to the Medicaid population.

This wealth transfer from federal taxpayers to states also was supplemented in most states by allowing them to levy provider taxes and have straight-up government appropriations count as matching monies. These policies facilitated boosting of spending on Medicaid to prop up rates to commercial levels, which could be double or more Medicaid rates. For example, for Louisiana’s managed care organizations that provide insurance for almost all of the non-waiver Medicaid population – the vast majority of Medicaid clients – for hospitals all of state-directed payments, provider taxes, and (for Louisiana State University Health Sciences Center New Orleans) intergovernmental transfers are used to peg Medicaid rates at or near commercial rates.

As election looms, Shreveport promising higher pay

You can tell it’s election season in Shreveport when pay raises for all coexists with a budget that looks as if it’s running on fumes.

Last week, the Republican Mayor Tom Arceneaux Administration presented a preliminary piece of the city’s 2027 budget. After having previously announced a round of pay hikes concentrating on public safety commencing before the next budget cycle, here comes another. Actually, two.

One will focus on issues of salary compression, which occurs when starting wages creep upwards without periodic adjustments to salary for existing employees, meaning relatively speaking green employees make more than seasoned. As well, Arceneaux’s last budget unwisely hiked city pay at the lowest levels to a minimum wage of $15 per hour, exacerbating the compression as well as inducing budgetary strain with millions of dollars in new recurring costs.

Landrieu next LA vanity presidential aspirant

Don’t look now, but it looks like Louisiana has another vanity project running for president, this time in the form of Democrat former Lt. Gov. and New Orleans Mayor Mitch Landrieu.

The state occasionally experiences a credible politician (meaning not Prisoner #28213-034) taking a Quixotic stab at the country’s top office. Republican former Gov. Bobby Jindal’s attempt for 2016 falls outside this category, because he would have had a real chance after beginning a populist turn in the last couple of years of his governorship had not the most unimpeachably conservative populist of all time GOP Pres. Donald Trump trumped Jindal and other competitive Republicans with his outsider and semi-celebrity status. He was, for a while, a serious candidate.

Jindal actually had a really good shot for the nomination in 2012, but demurred. Instead, that year Louisiana sent forth a former GOP governor as a novelty candidate, Buddy Roemer. He got sucked into this idea that a major party could form on a temporary basis and make someone like him competitive. Of course it didn’t happen.

Spin detracts from fixing Caddo jail overcrowding

Political spin reaches its full rotational velocity during election season, as comments about the overcrowded Caddo Correctional Center illustrate that distract from the fact this problem stems from prosecutorial choices, not from law enforcement.

No, it’s not so much that burgeoning Shreveport police arrests keep the CCC “bursting at the seams,” although obviously that volume is a significant contributor without which it wouldn’t have the opportunity to inflate. That statement comes from Wayne Smith, Shreveport Police Department chief, whose boss Republican Mayor Tom Arceneaux this fall faces spirited competition to retain his job. The more Smith talks up SPD vigilance, the more it pats Arceneaux’s back as the election looms.

Yet Smith could ramp up arrests even more and it wouldn’t be a crowding problem, according to a 2023 report of the Caddo Parish Criminal Justice Task Force. It discovered a 40 percent growth in the pretrial population even as arrests declined from 2012 to 2022. It saw as the cause the median bail amount rising over 2.5 times, explained by an increase in felony arrests, from 2014 to 2022, and a 144 percent increase in days from a court case’s opening to its disposition, thought to be a result of staffing shortages which delay transmission of case materials.

BC budget subject to stormy weather ahead

Bossier City put forth a solid 2027 budget, despite a few dark clouds ahead, and perhaps a bit too optimistic.

This week, the City Council held a budget information session, where Chief Administrative Office Shane Cheatham presented it publicly. The plan concentrated on maintaining core services and continuation of existing ones with a 3.71 percent bump upwards in general fund spending to nearly $86 million. As it is, that increase is driven almost entirely by a predicted rise in sales tax collections.

Which might flash one sign of trouble. It forecasts that property tax revenues actually suffer a tiny decline, meaning resales of property would increase at the margin at best and bring little in the way of new higher valued property into service. In other words, this indicates stagnation economically with little upward movement in population.

Landry housing plan should reduce LA homelessness

The Republican Gov. Jeff Landry Administration came up aces with its recently released plan to use federal housing funds in a way that actually mitigates homelessness in Louisiana.

Each year, the federal Department of Housing and Urban Development doles out grants to states to provide housing. States and local governments have established panels to recommend to HUD proposals from various lead agencies willing to coordinate spending, in Louisiana’s case, historically around $100 million combined annually.  Until this year for many years, these defaulted to a nonprofit agency called UNITY of Greater New Orleans and another outside of New Orleans, the Louisiana Balance of State Continuum of Care.

But those agencies followed a flawed worldview of optimal housing policy, and its distributional planes reflected that, where primarily the homeless were to be given permanent housing as a “solution” to homelessness, even as research has shown that approach is less effective than steering policy to make any housing most often transitional, as the large majority of homeless are that way because of behavioral issues they must solve that enable them to exit homelessness. The GOP Pres. Donald Trump Administration last year directed HUD to embrace the latter, a more effective strategy in how it distributed these grants.

Cassidy blame exercise confirms unfitness

There’s more reason than ever for Louisianans to remind Republican Sen. Bill Cassidy not to let the door hit him out the way out of the Senate with his intemperate remarks made recently about increasing numbers of measles cases in the country and health care policy under GOP Pres. Donald Trump.

At a conference sponsored by a politics website, Cassidy blamed Trump and specifically his appointee as Secretary of Health and Human Services Robert F. Kennedy for the increase, already in annual terms the highest number in over a quarter-century. He said messaging was to blame, as HHS under Kennedy has shifted departmental communications away from unabashed stumping for vaccinations to one of seeking advice from trusted health care providers.

 

He called this an effort to “undermine faith” in vaccines generally and also claimed to have had his faith undermined by his voting to advance Kennedy’s nomination for the post in early 2025 only to have this rhetoric about vaccination develop. Cassidy lost the Republican primary for reelection this spring in part because Trump backed likely winner this fall Republican Rep. Julia Letlow, after Cassidy had flip-flopped to vote to convict Trump on questionable impeachment charges as well as had backed large-scale Democrat spending legislation.

Cut inefficiency from Medicaid autism spending

Late to the party, Louisiana needs to go after sketchy Medicaid autism treatment and diagnoses aggressively.

Starting a few months into the second term of Republican Pres. Donald Trump, the federal government began reviews of select state Medicaid spending on treating autism, specifically applied behavioral analysis outlays. It found massive fraud in Minnesota leading to legal action, and across it and three other states extrapolated a disturbing pattern of rapidly escalating expenses capped off by some $200 million improperly paid and another $400 million in incorrect billings.

The Democrat Pres. Barack Obama Administration pushed through a rule mandating Medicaid coverage of autism not long after diagnosis guidelines were relaxed that qualified far more children so that those even slightly eccentric-acting qualified. This resulted in a near-quintupling of autism diagnoses since the turn of the century so that now over one in three children receive it, while in eight states that provide specific data on autism Medicaid spending costs sextupled to $2.2 billion in just a few years.

Reelection driving Shreveport new spending choices

Take a look at what Shreveport elected officials stump for in increased spending and you can tell it’s an election year.

Last week, Republican Mayor Tom Areceneaux announced, because of presumed higher sales tax collections from a data center siting in the city, that he would put into the budget, and start it a month before the next fiscal year (after the general election but before the runoff), pay raises and other potential bonuses for public. He thought for police the cost for around a 5 percent bump plus things like recruitment bonuses and for other achievements that could push it towards 8 percent plus a 6 percent firefighter raise would end up in the neighborhood of $7 million annually.

In essence, Arceneaux basically declares that the data center – apparently more its construction than operation as he indicated he saw this pop upwards would last only four or five years, or about the time a second term of his would end – will add 4 percent more sales tax revenues for a sustained period. Yet that asks for some optimistic math.