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Revised budget offers transformational opportunity

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.

By forwarding this, Edwards tries to create panic – the loss of the health care safety net for many of the poor, oh no! – when it in fact that merely speeds up the timetable of the inevitable. No other state has an arrangement like this, and with Edwards forcing disastrously expensive and underperforming Medicaid expansion on the state that would complete picking up this entire population for coverage, these arrangements become superfluous, leading to open speculation within the Edwards Administration that the concept of charity hospitals soon will disappear entirely.

Republicans should recognize not only the hollowness of this threat to make them appear uncaring and to take away credit they assume for delivering jobs, but also that this offer represents a major opportunity to shrink state government by giving away largesse it never should have in the first place that soon will wither away on its own accord. Take it and don’t look back.

(It gets a bit more complicated than that, as to follow existing statute the legislature must authorize the closings and/or repeal the provision that puts the state on the hook for providing care to anyone under the 200 percent FPL level at a designated charity hospital. Unless it makes such changes, the savings cannot materialize.)

Edwards extended his draconian approach to the Taylor Opportunity Program for Scholars, reducing its funding by two-thirds to wipe out nearly a quarter of the deficit. By present law, this would boost the qualifying American College Test score for both new and continuing awardees to 26.

By doing this, he achieves what policy-makers should have pursued from the start: making TOPS into a true scholarship program instead of an entitlement program that disproportionately assisted mediocre users not from lower-income families. Offering the most generous college-assistance program in the country, this, as in the case of charity hospitals, fits neatly into the populist ethos of government directing resource redistribution to target certain beneficiaries, in this case not the poor but mostly the non-poor.

In this instance, Edwards tries the same tactic of instilling fear but with a another audience that benefits from populism, one that likely disproportionately votes for Republican legislators who in the main have said they wish to see cuts in spending. Just as with charity hospitals, with TOPS Edwards seeks to cordon off alternative considerations and force the conversation into dichotomies designed to elicit the feeling that the pain of making cuts in these areas exceeds that of tax increases.

While Republicans must recognize the tactic for what it is and expose Edwards’ tax-and-spend agenda by broadening the playing field for cuts – aided by other legislative maneuvers such as stripping statutory dedications – they also should recognize a good deal when they see it. As currently constructed, TOPS acts as nothing more than an entitlement like those that some defenders of TOPS often criticize, which, because current TOPS standards cause considerable waste both in terms of those dropping out of the program and higher education and in that it heavily subsidizes a service that citizens willingly would pay for, inefficiently uses taxpayer resources.

So when Republican state Rep. Cameron Henry, chairman of the House’s influential Appropriations Committee, mentions that he thinks the House can find other areas in which to make reductions to prop up TOPS, that demonstrates understanding that legislators should not buy into false choices presented by Edwards, but misunderstands the necessity of transforming TOPS away from its entitlement philosophy and additionally betrays the populist mentality that has gotten the state into a budget bind in the first place. Louisiana has a spending problem caused by its insistence on providing benefits to families and individuals that should be primarily their responsibility – in these cases, gathering resources to attain higher education (including aid from genuinely meritorious scholastic achievement) and not indiscriminately and inefficiently consuming health care.

Unfortunately, some legislation regarding TOPS that would become pertinent with the projected cuts largely would defeat its evolution away from acting as an entitlement. For example, SB 470 by state Sen. Blade Morrish would mean those at the much lower ACT levels still would qualify by rationing the amount given to each rather than pay for the entire amount. Not only does this allow it to continue as an entitlement, it would discourage higher performers from accepting awards as they could find more attractive deals elsewhere, diluting program outcomes even further.

Legislators need to go for Edwards’ funding level with TOPS as well, but not by changing statute that would move the program away from becoming a true scholarship program in the process. At a larger level, they must recognize what Edwards intends as a bludgeon to hike taxes really represents an opportunity to provide more impetus to the state’s slow process of eroding its populist political culture.

Louisiana has a spending problem because of populist tendencies. Policy-makers only solve the problem by tackling this underlying disease. Handing Edwards what he asks but not what he wants advances the cure.

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