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NEWS

FOR IMMEDIATE RELEASE
May 11, 2012
Contact: Michael DiResto, 225-342-7000

Commissioner Rainwater outlines practical impact of House budget actions

BATON ROUGE – Commissioner of Administration Paul Rainwater released the following statement outlining the practical impact of House actions on the budget bill (HB 1), which passed after being amended to direct the Commissioner to make $267 million in additional cuts:

“These $267 million in reductions mandated by the Geymann and Henry Amendment and adopted by the House will have to be made to operations and services, and are in addition to the reductions already made to HB 1 when it was amended in House Appropriations Committee with language that said, in effect, ‘the Commissioner shall cut another $43 million from the budget,’ without specifying where those cuts should be made.
 
“The departments with the following largest amounts of discretionary General Fund dollars in their budgets will face the greatest reductions: Higher Education ($938 million) Department of Health and Hospitals ($644 million) LSU’s Health Care Services Division (Interagency Transfer from DHH: $163 million) Department of Education ($115 million) Office of Juvenile Justice ($98 million) Department of Children and Family Services ($75 million) Department of Corrections ($56 million).
 
“Based on these numbers, Higher Education should expect to take a reduction of approximately $133 million.  This reduction is in addition to the $50 million reduction to Higher Education made in the House Appropriations committee, and the $21 million reduction resulting from the first ‘Commissioner shall’ amendment added in the Appropriations committee.  These reductions combined result in more than $200 million in cuts to Higher Education.

“Similarly, healthcare services (DHH and HCSD) should expect to receive a reduction in General Funds of approximately $100 million, which will result in a total reduction of approximately $350 million due to loss of matching dollars.  This reduction is in addition to the $57 million in reductions already made in committee, and the $21 million reduction resulting from the first ‘Commissioner shall’ amendment added in committee.  These reductions combined result in more than $500 million in total cuts to healthcare services with the loss of matching dollars.

“Although, this amendment suggests general categories like ‘enhancements, vacant positions, travel, supplies, acquisitions, and contracts,’ these categories of expenditures have already been reduced to a point that you cannot achieve the savings indicated in the amendment.

‘For instance, most of the vacancies being targeted by this amendment are already unfunded, or not funded by General Fund, therefore this amendment double counts these saving.

“Furthermore, most of the ‘enhancements’ are not actually increases, but instances of using General Fund to continue critical operations that were previously funded by other means of finance.

“The amendment also suggests reducing $16 million through a 2-day furlough for state workers.  These are one-time savings, which essentially equates to replacing one source of one-time revenue with another.

“The amendment calls for cutting $75 million in contract costs in the upcoming fiscal year – an 80 percent reduction in the statewide annual expenditure for professional services contracts funded by the General Fund.  More than half of the professional service contract costs contained in the budget are from DHH contracts.  The reductions would jeopardize Medicaid payment processing as well as the Medicaid Eligibility Data System.  These cuts would also impact the Department of Education’s student achievement testing through LEAP, as well as medical and rehabilitation services at the Department of Corrections.

“Finally, to the extent that the amendment makes $70.7 million in across-the-board 10 percent cuts to statutory dedications to replace General Fund, this step essentially does what the authors claim to oppose.”

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