Monday, March 28, 2016

Monday, March 28, 2016

Congress should help Louisiana on Medicaid; Hollywood South goes south; Medicaid bears brunt of latest cuts; Changes loom for capital outlay

Congress should help Louisiana on Medicaid

When Louisiana extends Medicaid coverage later this year to an estimated 400,000 low-income adults, the federal government will pay the full cost of coverage only through December before the state has to start paying a small share. While Medicaid expansion remains an excellent deal for state taxpayers, the Times-Picayune editorial page says Congress should make it an even better one by allowing Louisiana and other late-adopting states to get the same three years of 100 percent federal financing that was given to states that adopted expansion earlier.


Louisiana’s delegation should fight for the state to get the money. U.S. Rep. Cedric Richmond, a New Orleans Democrat, introduced the president’s proposal last week. But Majority Whip Steve Scalise, a Republican from Jefferson, has said the bill likely is doomed. That shouldn’t be the case. Rep. Scalise and the other Republican members of Louisiana’s congressional delegation should help Rep. Richmond move the legislation — despite how they feel about the president’s health care act. As majority whip, Rep. Scalise is in a particularly strong position to help Louisiana. Leaders in the Republican-controlled state Legislature should see the benefit of the extra money and push the congressional delegation to get behind the measure. If nothing else, they should see that the state needs the funding to take some pressure off the budget, which at this point is $750 million short for the budget year that starts in July.


Hollywood South goes south

When state government began offering financial subsidies to film and TV productions located in Louisiana, the long-term goal was to create an industry that could stand on its own without support from taxpayers. But as Tyler Bridges reported in The Advocate on Sunday, that goal remains far from reality after more than $1.5 billion has been lavished on the industry. It turns out that even a temporary tweak to the film program has been enough to derail the gravy train.


Louisiana’s film and television industry — popularly known as Hollywood South because of the large number of movies and shows filmed here over the past decade — has suffered a sharp downturn since mid-2015. Industry officials are blaming a law passed a year ago by the state Legislature and signed into law by Gov. Bobby Jindal — a law that aimed to control ballooning costs for a generous incentive program that independent analysts say has not provided much bang for the buck. Other factors behind the slump include ever-sweeter subsidies offered by California, the industry’s natural home; competition from cap-free Georgia, a regional rival; and a weakening of the Canadian dollar, which has made it cheaper to film in Toronto, Vancouver and Montreal.


Despite the slowdown, Louisiana is still on track to pay $180 million in credits this fiscal year, which is the annual cap established by the Legislature last year that expires in 2018.


Medicaid bears brunt of latest cuts
The remaining $70 million gap in the current-year budget will be filled with cuts to Louisiana’s Medicaid program, Gov. John Bel Edwards announced just before state government closed down for the three-day Easter weekend. The cuts were necessary because the Legislature failed to completely close a $950 million mid-year shortfall that was caused largely by slumping energy prices and the failure of last year’s Legislature to budget for all of the state’s projected expenses. As The Advocate’s Elizabeth Crisp reports, the cuts mean colleges and universities won’t have to absorb any additional reductions in the three remaining months of the fiscal year as originally feared.


On the chopping block: $10.3 million in rates paid to companies that run the state’s Medicaid managed care program; $6.9 million in contracts with private health care providers who oversee public hospitals; $1.9 million in contracts; and $500,000 for a program that serves medically fragile children. The department also expects to save $10.4 million by making hospital payments under a better Medicaid expansion federal match rate; $10 million in administrative efficiencies; and $30 million from expenses that have come in below earlier projections.


Changes loom for capital outlay

While the state operating budget typically draws the most scrutiny from the media and policy advocates, many legislators have been known to pay closer attention to the annual capital construction bill, which allocates money for state and local construction projects. The capital outlay bill has also been a vehicle for governors to wrangle votes on controversial bills by giving or withholding support for local projects that are near and dear to individual legislators. But with the state trapped in a historic budget crunch, Gov. John Bel Edwards is proposing to overhaul the capital outlay process by steering money away from local projects into road maintenance and other long-neglected state needs. Jim Beam of the Lake Charles American-Press:


Governors have the final authority to decide which projects are forwarded to the State Bond Commission for funding, and they have often used the system to get favorable votes from lawmakers. Edwards definitely isn’t currying any favor with his decision. Edwards said he plans to use $80 million of the funds that will be saved on bridges and highways, which have a $12 billion backlog. Other savings will help catch up on some of the $2 billion in maintenance needed at state colleges and universities. Rest assured, the legislators who sponsored the projects Edwards is removing from the bill (House Bill 2) aren’t going to be happy. But you knew the action was significant when it drew praise from state Treasurer John Kennedy, an Edwards critic.


The Advocate’s Mark Ballard reports on how the news went down with Baton Rouge-area legislators:


What Edwards told the capital region delegation — he was a member this time last year — that he would focus capital outlay dollars on finishing what’s been started, repairing existing state buildings — universities alone have a $2 billion deferred maintenance backlog — and on highway construction. There will be no new buildings. That’s fine for (Rep. Steve) Carter because the capital region’s top needs are all about easing traffic congestion. And it’s OK for state Rep. Kenny Havard, R-St. Francisville. As chairman of the House Transportation, Highways and Public Works Committee, Havard juggles hundreds of requests for state money to pay for transportation projects. Having a little extra cash from capital outlay is welcome.


Number of the Day

61 – Number of applications for film credits received by the Louisiana Department of Economic Development so far this fiscal year, down from 138 in the 2014-15 budget cycle. (Source: The Advocate via LED)