Louisiana’s credit rating still in flux
A new fiscal year is underway, undergirded by a package of budget and revenue bills that aim to keep state government solvent until July 2016. But as the AP’s Melinda Deslatte reports, the next big question is whether it all will be enough to allay concerns by credit rating agencies, whose reports determine how much it will cost Louisiana to borrow money for infrastructure and other needs.
News of whether Louisiana made enough progress to escape a lowering of its credit rating should come by late July or early August, as the state readies for its next round of borrowing through a bond sale to investors. Ratings from the credit agencies help determine interest rates. A drop in a state’s credit rating raises interest costs, making it more expensive to borrow money. In February, two national rating agencies — Moody’s Investors Service and Standard & Poor’s Rating Services — moved the state from a “stable” to “negative” credit outlook even after state officials sought to reassure them about Louisiana’s financial condition.The rating agencies raised concerns about the short-term patches Jindal and lawmakers have used to balance the budget, maneuvers that have created annual budget shortfalls.
American-Press: License all day cares
The death last month of a toddler who was left unattended in a sweltering van has brought fresh attention to the haphazard way Louisiana regulates child-care services – and the fact that providers who care for six or fewer children are not regulated at all. The Lake Charles American-Press says that should change, even if it ends up costing more money.
We are not trying to indict any one place or any one group, but we want to promote an idea that has been needed for a long time now. This is not about the businesses — this is about the children. Keeping them in safe environments and out of harm’s way should be first and foremost in any conversation on the subject. This may seem like another instance of big brother watching over us, or big government getting involved in private industry, but there are certain things that trump such concerns. The care of our children is clearly one of them.
Auditor has no idea whether Bayou Health saved money
A new state audit says it’s hard to tell for sure whether Gov. Bobby Jindal’s signature health care achievement – the privatized Bayou Health plan for Medicaid recipients – is saving the state any money. But this much is clear: The overall cost of the Medicaid program has continued to grow in recent years, despite Louisiana’s refusal to extend coverage to low-income adults. The Advocate’s Marsha Shuler has the story:
The auditor said that based on raw data, total Medicaid spending during the period scrutinized increased by more than $1.2 billion, or 19 percent, from $6.35 billion to $7.57 billion. The privatized Bayou Health component of Medicaid grew by 13 percent, indicating the program “may be saving the state money by curbing cost growth,” the auditor said. The auditor recommended that the state health agency work with the Legislature to determine whether an independent actuary should be hired to determine if Bayou Health is saving the state money when compared with traditional Medicaid.
New fiscal year; new budget fixes will be needed
With the start of a new fiscal year, The Advocate’s editorial board reminds readers that the budget deal crafted by lawmakers is only a temporary fix to the state’s long-term fiscal problems, and that Louisiana’s next chief executive will need to work with the Legislature to confect a long-term solution. The newspaper suggests that will mean new cuts to popular programs on top of the cuts that have been made in the last seven years.
Major candidates for governor have promised a special session early in 2016 to deal with the underlying fiscal problems of the state. But it’s important for context to understand that these problems didn’t start with Jindal’s budget proposal back in the spring. Another good point: It’s not as if government has grown that much with this year’s revenue increases. Why not? Because the several new taxes and the trimming of exemptions and credits only filled part of the hole. Legislative leaders were faced with a $1.6 billion shortfall, and that’s a huge proportion of the general fund that does not include things like federal funds and other restricted spending. That is true enough, but the underlying problem is that cuts in popular programs — cuts that the elected members were reluctant to make this year — will be necessary to reduce significantly the built-in costs of government.
Number of the Day
19 – Growth, in percent, of overall spending in the Medicaid program during the past six years. (Source: Louisiana Legislative Auditor)