Thursday, February 12, 2015

Thursday, February 12, 2015

Inheriting a mess; An economic teaching moment; Credit rating imperiled; and Rally for ER services

 

Inheriting a mess

First Politico. Then the New York Times. And now The Associated Press comes with the longest and most in-depth look yet at Louisiana’s structurally deficient state budget. Melinda Deslatte’s article takes us through the state’s use of patchwork “one-time” financing to plug holes and the deep stack of bills that awaits the next governor, but fails to get anything resembling a mea culpa from the man who is chiefly responsible.

 

As for Jindal, he said in a recent interview that the shortfall isn’t his fault, and he dodged any talk of his temporary fixes. “The shortfall next year is almost entirely due to the declining revenues, and the vast majority of that is due to falling oil prices,” he said. The numbers, however, don’t back up the governor’s explanation.

 

An economic teaching moment
The recent announcement by Sasol that it was delaying its proposed $14 billion gas-to-liquids factory near Lake Charles is the latest evidence that Louisiana’s policy of throwing money at corporations in an effort to score economic development “wins” is not always a sound long-term strategy. As LBP’s Steve Spires notes in a guest column for The Advocate, the money we spend on corporate incentives comes at a cost.

 

Policymakers should stop asking themselves how much tax money it will take to lure the next factory to Louisiana and start asking how they can make Louisiana more attractive to investment by modernizing our infrastructure, improving training programs and making sure everyone has access to great schools and hospitals. Right now, we aren’t on the right path. Louisiana has cut state support for higher education faster and farther than any other state since the start of the Great Recession, with more cuts on the way. Professors are leaving, degree programs eliminated and students being asked to pay more for less.

 

Credit rating imperiled
Louisiana’s ongoing financial problems have not escaped notice from the credit agencies, as Moody’s issued a “credit negative” report last week and is considering a downgrade to the state’s credit rating. Such a move would worsen the state’s financial picture by raising the state’s borrowing costs.

 

In an effort to stave off the downgrade, Gov. Bobby Jindal will personally speak to the ratings agency today. The AP reports that Jindal’s personal involvement follows a Wednesday conference call with the agency that involved the governor’s chief budget officer, state Treasurer John Kennedy and the chairs of the House and Senate budget committees.

 

“We all argued strenuously to give the Legislature a chance to correct our problem,” Kennedy said. “Obviously, we want to avoid this (downgrade). Number one, it will cost taxpayers more interest, and number two, it will be a blow to our status.”

 

Rally for ER services

The announced closure of the only emergency room serving the heart of Louisiana’s capital city brought a broad coalition of policymakers and community leaders to the steps of the state Capitol on Wednesday.

 

Speakers, including former Louisiana Department of Health and Hospitals Secretary David Hood, suggested one way to keep the ER open would be to expand Medicaid under the federal Affordable Care Act. Gov. Bobby Jindal has joined other Southern and conservative governors in refusing to do that and isn’t likely to back down from that position. Hood said expanding Medicaid coverage would ensure health care providers are reimbursed for treating the vast majority of 700,000 Louisianans who have no health insurance.

 

But the CEO of Baton Rouge General told the Baton Rouge Business Report’s Stephanie Riegel that the public outcry would have no effect on the hospital’s decision to close.

 

“We respect the community dialogue taking place and appreciate the community’s desire to have access to ER services,” he said. “Sadly, that time has passed for Baton Rouge General—as we have long championed this discussion.” In a press release issued today by Baton Rouge General, the hospital says it is undertaking “extensive community education and staff engagement efforts to help ensure an effective transition” as it moves forward with the ER closure.

 

Number of the Day

 

$112,332,088 – Net profit of Our Lady of the Lake Regional Medical Center in fiscal year ending June 30, 2013 (Source: GuideStar)