Thursday, May 14, 2015

Thursday, May 14, 2015

Colleges vs. hospitals: budget uncertainty continues; Medicaid expansion slouches towards Bethlehem; More on those higher education cuts and; L.A. ahead of La. in minimum wage debate

Colleges vs. hospitals: budget uncertainty continues

The House Appropriations Committee has approved next year’s funding for Louisiana colleges and universities at the same level as this year while health care advocates continue to make their case that funding Louisiana’s health care infrastructure is just as important. Neither budget priority has cleared its final hurdle however, and as Jim Beam reports, there are plenty of unknowns as the budget process continues.

 

The House last week passed what it thought were new revenues totaling $664 million. The latest count has that down to $650 million, still short of the nearly $1 billion needed to deal with a projected $1.6 billion deficit for the budget year beginning July 1.  Other bills are on the House calendar that could raise the additional $350 million needed to reach the $1 billion goal. However, Rep. Joel Robideaux, R-Lafayette, and chairman of the House Ways and Means Committee, told The Advocate late Tuesday he isn’t planning to approve any more major revenue-raisers than the 11 that passed the House a week ago.    The Revenue Estimating Conference meets today and everyone is hoping it will find that tax revenues are higher than expected.    Meanwhile, there could be a court challenge to most of the money raised by the House. The Louisiana Association of Business and Industry believes about $550 million of the $650 million approved last week doesn’t meet what it considers to be a twothirds (70-vote) requirement.

 

Health care advocates have plenty to be concerned about. The budget as it currently stands is insufficient to fund needed services, including the privatized charity hospital system:

 

The poor can’t afford health care insurance, many thousands of disabled citizens have been on waiting lists for services for many years and the elderly can’t always provide for their needs.    The charity hospitals that Gov. Bobby Jindal’s administration privatized are seeking additional funding. A spokesman for the group told The Advocate if money isn’t found they could decide after the legislative session to opt out of the agreements.   The new University Medical Center in New Orleans needs $33 million in state funding to draw $55 million more in federal funding. It is taking over the former New Orleans Charity Hospital operations.   LSU medical schools in New Orleans and Shreveport need $56 million in order to pay health insurance and retirement costs of former employees of the schools who lost jobs under privatization. The costs were unexpected.    If the House doesn’t provide more revenues for the health care budget, the challenge will fall to the Senate.

 

Medicaid expansion slouches towards Bethlehem

Louisiana moved a little closer to extending health coverage to low-income adults this week, when the House unanimously approved a financing mechanism for Medicaid expansion.  HCR 75 by House Speaker Chuck Kleckley and Speaker Pro Tem Walt Leger allows certain hospitals to put up money through an assessment that would be used as the state’s match of the federal Medicaid program. But as Marsha Shuler of the Advocate explains,

 

Under the resolution, Medicaid coverage expansion would have to occur prior to April 2016 in order for the assessment to be triggered. A new governor takes office in January 2016. Kleckley said the measure provides the financing mechanism for the state’s hospitals to pool their dollars together and pull down matching federal funds “to take care of some of our health care needs in the state.” The hospital dollars also will free up $100 million to $200 million in state general fund dollars for other budget needs, Kleckley said. “These are real dollars we can save in the state general fund,” he said.

 

Shuler cites the Louisiana Hospital Association as having more detailed plans for the generated funds:

 

Earlier, Louisiana Hospital Association President Paul Salles said the extra hospital dollars would be used to draw down federal funds to cover the Medicaid expansion costs. “This legislation is a commitment, a significant commitment by hospitals to be a part of the health care solution in Louisiana,” he said.

 

More on those higher education cuts

The Washington Post gives a national perspective on the Center on Budget and Policy Priorities’ report on higher education funding – which found that Louisiana has cut more on a per-student basis than any other state since the recession started in 2008. While Louisiana may fare the worst, other states aren’t doing so well either.

 

Spending per student remains below—in some cases well below—pre-recession levels in 47 states, reflecting years of cuts to public colleges and universities that have yet to be undone, the Center on Budget and Policy Priorities notes in a new report. Schools have responded by cutting programs and staff and raising tuition. Where funding has risen, it hasn’t covered the losses. “Even though there have been recent increases in per-student funding, those increases haven’t been significant enough to make up for past-year cuts,” says lead author Michael Mitchell. State higher education spending per student, adjusted for inflation, is down 20 percent—or $1,805—between the 2008 and 2015 fiscal years, according to the report. Tuition, meanwhile, is up 29 percent, or $2,068, on average.

 

L.A. ahead of La. in minimum wage debate
The city of Los Angeles is the latest to join the national trend of raising the minimum wage, as a city council committee agreed to raise wages to $15 per hour by 2020. As the Los Angeles Times reports, the measure now moves to the entire council.

 

The decision marked a major stride toward boosting pay across Los Angeles, where city leaders have broadly agreed that some kind of increase is needed to lift workers out of poverty amid soaring rents and stagnant wages.”This is perhaps the greatest shift of wealth in the history of this city,” said Councilman Gil Cedillo, who sits on the committee. L.A. is following in the footsteps of cities such as Seattle and San Francisco. If approved, the plan would fall short of the across-the-board, faster increase to $15 that unions and their allies had initially pressed for.

“It’s not what workers in Los Angeles need,” said Laphonza Butler, a leader of the Raise the Wage Coalition and president of the Service Employees International Union California. “But it is a far cry from where we were.”

 

Louisiana still has no state minimum wage, having rejected several attempts to set a state minimum wage and raise it above the current federal $7.25 per hour. Up for debate this session is HB 677 by Rep. Marcus Hunter of Monroe which establishes a state minimum wage of $7.25 an hour and raises the wages of tipped employees to that same level by 2017. It has not yet been scheduled to be heard by the House Committee on Labor and Industrial Relations.

 

Number of the Day
$200 million: General fund dollars that could potentially be freed up by creating the Hospital Stabilization Fund (Source: The Advocate)