Monday, April 15, 2024

Edwards restores health care funding, reduces retirement debt payments in budget

by BIZ Magazine

By Julie O’Donoghue, Louisiana Illuminator

Gov. John Bel Edwards on Thursday added back $100 million for state health care programs and $7.5 million early childhood education that had mostly been removed in the final, chaotic minutes of the Louisiana Legislature’s annual session earlier this month

The Democratic governor found the money to do so by reducing $125 million put toward early public employee and state retirement debt payments, a move that will likely frustrate Republican lawmakers. 

The changes – which Edwards made through line-item vetoes to budget legislation – were expected. For example, the Democratic governor had been saying for weeks that he intended to restore the funding for health care.

But the governor’s adjustments are still likely to rankle conservatives, who fought for weeks to get extra money put toward retirement debt.  They blocked legislative leaders’ plans to spend hundreds of millions of dollars in extra state funding until they were assured larger debt payments would be implemented. 

Now, the governor has cut the size of the debt payments that conservatives had prioritized to ensure the health department — one of the top targets for conservatives’ criticism — receives more money. 

“I just believe that $100 million could be absorbed within LDH’s budget,” said House Conservative Caucus Chairman Jack McFarland, R-Jonesboro. “I think it sends a terrible message to taxpayers.” 

Health care funding restored

The Edwards administration said the loss of $100 million in health care funding would have been catastrophic for services. The reduction could result in a total loss of $400 million to $700 million because state health care dollars are used to draw down large amounts of federal funding. 

Specifically, the governor’s staff said mental health services, hospitals and nursing homes could have taken a financial hit if the $100 million reduction had stayed in place. 

Republican legislative leaders removed the money from the state’s health care plan with almost no public discussion about what a cut of that size might mean. Most lawmakers weren’t aware the money had been taken out until just minutes before they were asked to vote on the annual budget plan at the end of the legislative session

Hospital leaders, health department staff and even the governor himself also said they were blindsided by the funding reduction when the budget passed June 8.

“I thought it was a joke to be honest with you,” Louisiana Health Secretary Stephen Russo said at a public hearing last week about his initial reaction to the funding loss.  

Republican House leaders have pushed back on the notion that the $100 million loss would have required cuts to services. The Louisiana Department of Health’s budget is massive — approximately $20 billion overall — and many believe the agency should have been able to absorb the funding reduction.

Even with $100 million less, the health department’s budget would still have grown in the next budget cycle by over $140 million compared with the current fiscal year. So it’s hard to understand why the impact to services would be so significant, conservatives said. 

“I’m disappointed,” Rep. Jerome “Zee” Zeringue, R-Houma, said about Edwards’ changes .“The benefit to the retirement program for the teachers and state employees is reduced, but LDH is doing quite well.”

Some of the health department’s budget growth can be attributed to decisions legislators have made, however.

Lawmakers have ensured nursing home compensation automatically goes up every other year, for example. They have also increased rates paid to certain health care providers,  including companies that place aides in people’s homes, which has cost the state more money. 

Not all Republicans were unhappy about the governor’s vetoes either. 

“I just really applaud him for doing that,” Sen. Fred Mills, R-Parks, said of Edwards’ budget changes. “These health care cuts would have been devastating.”

More early childhood education slots retained 

Edwards also added back funding for retaining early childhood education slots with his veto pen.

With the expiration of approximately $200 million in funding for these programs, Louisiana was expected to lose 16,000 early childhood education seats in the coming school year. Lawmakers had backfilled that loss of money by about $44 million, and Edwards added $7.5 million more to make sure these programs can continue to serve more kids.

The total amount of funding saved for these programs will now be $51.5 million.

Veto unlikely?

Legislators have the option to overturn the governor’s vetoes through an override session that would be held in mid-July.

But it’s not clear how popular taking money away from health care services and early childhood programming would be with the lawmakers. Two-thirds of legislators in both chambers would have to vote to overrule the governor, a high bar even with controversial measures.

Several legislators have said a veto session might be likely because of bills other than the budget plan. Edwards is expected to veto three bills that place restrictions on transgender and gay youth which lawmakers passed overwhelmingly. Those actions could trigger a return to Baton Rouge next month.

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