Edwards: 'We need additional revenue' as next year's budget proposes $792M in cuts

Edwards: 'We need additional revenue' as next year's budget proposes $792M in cuts

BATON ROUGE, LA (WAFB) - The governor's updated budget proposal for the next fiscal year features $792 million in cuts as part of an effort to balance the state budget and eliminate the shortfall.

Gov. John Bel Edwards appeared in the House Appropriations Committee Tuesday morning, outlining the amended budget which takes into account the revenue measures passed during the special session.

"When you're short the way we're short, you just can't do it all," he said. "Make no mistake, we need additional revenue."

Under the governor's proposal, the Department of Health and Hospitals would see a 12.3 percent cut, which amounts to about $409 million. As a result, the state could be forced to cut off funding to four of the state's public-private hospitals, which treat the uninsured. Without funding, they could be forced to shut down.

The four hospitals to lose funding under the plan are located in Lake Charles, Bogalusa, Houma, and Alexandria.

The state-funded hospitals in five other cities would all see a 3 percent budget cut, but would retain their state partnership. Those hospitals are located in Monroe, Lafayette, Baton Rouge, Shreveport, and New Orleans. That includes Our Lady of the Lake in Baton Rouge.

The proposed hospital cuts received negative feedback from many House members.

"We're cutting some hospitals by 3 percent and were cutting others by 100 percent. Do you realize how unfair that sounds?" asked Rep. Beryl Amedee, R-Houma.

"I don't know why you wouldn't make a hospital a priority, but I promise you the House thinks it is and we're going to budget accordingly," said Rep. Cameron Henry, R-Metairie, who chairs the appropriations committee.

Several other agencies are facing large cuts. Higher education would see a 6.1 percent reduction, which amounts to $46.1 million. Corrections and local housing would see a $34.1 million cut. Meanwhile, the Department of Education would see a $52.4 million reduction.

There was some good news. Edwards told the committee that Medicaid expansion will bring in a projected $184 million in savings next year. The governor proposed putting $50 million of that toward funding TOPS.

Combined with the $60 million from the tobacco settlement that is automatically assigned to TOPS, the total TOPS budget for fiscal year 2016-2017 under this proposal would be $110 million. That is $183 million short of the amount needed to fully fund TOPS.

As a result of the shortfall, the Louisiana Office of Student Financial Assistance (LOSFA) estimates that students would need to score at least 26 on the ACT to require for TOPS. For reference, the average ACT score in Louisiana last year was just above 19.

If that rule was applied at this time, the head of LOSFA told the committee that only about 17,400 students would receive TOPS next year, down from more than 51,000 this year.

There are some bills currently working their way through the Senate that would alter how TOPS is distributed. One bill would allow everyone to keep receiving the scholarship, they would simply share an across-the-board cut. The governor has supported such a measure.

During the hearing, some Republicans proposed reducing the budgets of other departments and transferring that money to the TOPS fund. Edwards objected to that idea, suggesting that other agencies were already facing their own burden to fix the budget. He instead called for another special session to raise more revenue and reduce cuts.

Some Republicans are uneasy about another special session and whether anything can be accomplished.

"There is definitely not an appetite that I know of to do that any time soon if ever again, I think members are comfortable looking at exemptions and credits," Henry said.

Upon being asked, Edwards said if he had to make a decision at this point, the second special session would start on June 7, which is the day after the regular session ends. Still, no official decision has been made.

The budget is now in the hands of the legislators, who can modify it as they see fit.

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