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LA demographic shifts demand changing current budget

The Census Bureau estimates that the population of Louisiana relatively is aging, as over the past few years the state actually increased in number older people coming into the state while the number of younger continue to decline. The policy consequences of this need addressing now, but it is questionable whether Gov. Kathleen Blanco and the Louisiana Legislature will do so properly.

The appropriations bill for operating expenses, HB 1, is shaping up to take flights of fancy from this reality. Blanco, for example, wants to add roughly 1,000 new bureaucratic jobs in state government, even though the state has lost population and these demographics suggest more losses on the way. Simultaneously, she wants to enact little in the way of meaningful tax reduction, precisely the solution to entice younger, productive workers to come to the state or remain living in it.

Without that happening, a disproportionate share of Louisiana’s population will comprise of older citizens, and the biggest impact as a result of that trend historically has been greater demand on health care services, the state’s largest expenditure after education. This strengthens the argument for moving away from health care policy based upon institutional solutions to that stressing more individual choice involving home- and community-based solutions, because these are cheaper and better tailored to individual needs as opposed to the one-size-fits-all institutional approach.

Yet Louisiana has shown a striking reluctance to make this commonsensical shift. This legislative session, progress already has been made on SB 1, a bill that actually continues the state’s emphasis on money going to institutions rather than following people in regards to indigent health care. At the same time, no movement has occurred on bills like SB 98 which would create many more opportunities to shift spending to home- and community-based care.

It’s that time during the session where these kinds of matters start getting resolved. Today HB 1 is being debated in the House, and a Senate Committee is scheduled to take up SB 98. Altering the former to remove spending counterintuitive to census forecasts to enable more tax relief, while approving the latter will show that Blanco and the Legislature take seriously this demographic warning. If they don’t, massive fiscal pain lies ahead for Louisiana because as each year passes, population shifts will make costs continue to escalate while revenues will grow more slowly, if at all.

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