Jindal & Levine: Ideology and Ambition Are About to Take Louisiana Off a Cliff

We know with certainty that President Barack Obama's American Recovery and Reinvestment Act has saved one job in Louisiana: Bobby Jindal's.

While talking the typical Republican anti-stimulus line, Jindal took the money, laundered it through various state departments and agencies, then flew around the state with big images of checks handing the federal money out as if he had printed it himself in Baton Rouge. To top it off, he ordered the Department of Transportation and Development not to identify those projects that were funded with stimulus dollars.

Most importantly, though, the stimulus dollars put off the reckoning where Jindal's national political preening will collide with the state's fiscal reality. Those federal dollars have allowed Jindal to continue his 'no new taxes' happy talk in the face of declining state revenues and growing human need. Those dollars allowed him to put off (for a year, any way) draconian cuts in higher education that alarmed even some of those who once believed he had the smarts and the skills to effectively lead the state through tough budget times.

The Jindal reckoning will begin in earnest tomorrow when the Revenue Estimating Conference will produce their official estimate of the size of the hole in the state's current fiscal year budget. The hole has been estimated to be between $200 million and $400 million. Coming this late in the fiscal year, trying to cut his way out of this hole probably is not doable.

Whatever the size of the hole, it will begin to pull apart the budgetary house of cards that Jindal has tried to confect with his 2010-12 budget, which proposes to tap a series of one-time money sources to fix what is a systemic budget problem. Whatever funds he and his legislative allies agree to pull forward into this year to fill this latest hole will create a larger hole in the budget for next year now under consideration.

Things will get really scary after that because those federal stimulus dollars will begin to run out in the next fiscal year, sending Jindal and his allies into next year's election year legislative cycle with a huge projected shortfall and little likelihood of federal stimulus dollars being available to cushion the blow thanks to Jindal's Republican congressional friends.

Louisiana's much talked about fiscal cliff is straight ahead. The effective result of Jindal continuing to rule out revenue increases would be to step on the gas. Judging by the way Jindal and his health secretary are approaching healthcare, early indications are that ideology will trump pragmatism. Louisiana appears headed over the cliff.

Healthcare: Ignoring the New Reality on the Ground

The Jindal administration's immediate responses to the Affordable Care Act becoming law were ideologically driven. Jindal himself pressured Democratic Attorney General Buddy Caldwell to join 13 Republican states attorneys general in a lawsuit challenging the constitutionality of the new law. DHH Secretary Alan Levine said the new law would force the Jindal administration to close most of the LSU Hospital System possibly as soon as next year (as it plans to do any way). Jindal is a little confused about what is actually in the new law.

The Affordable Care Act will provide tax credits to more than 50,000 Louisiana small businesses to provide health insurance to their employees. The Act will provide access to affordable health insurance to hundreds of thousands of working Louisiana adults who cannot afford coverage now by helping to pay for that coverage. By September, it will offer adult Louisiana residents who have been denied coverage due to pre-existing conditions access to affordable care through a high-risk pool that will stay in existence until 2014 when the state insurance exchanges and the ban on insurance companies denying adults coverage due to pre-existing conditions takes effect. The Act already bans insurance companies from denying coverage to children with pre-existing conditions. It will bring affordable coverage to nearly 400,000 low income Louisiana residents through expansion of Medicaid eligibility. And it will require that all health screenings be free to patients regardless of the type of coverage they have — private insurance, Medicare, or Medicaid.

The Louisiana Department of Insurance is working to make sure that Louisiana is ready to reap the benefits of the law that Jindal is trying to undermine.

The reason Jindal most likely opposes the Act (other than the fact that it was passed by a Democratic Congress and signed into law by a Democratic President) is the fact that the state will have to pick up ten percent of the tab for the newly eligible Medicaid patients. Face it, that will require new revenue and Jindal is all about not going that route. His political ambitions are built upon that anti-tax foundation.

Levine, on the other hand, has been chomping at the bit to start closing LSU hospitals since Jindal appointed him in 2004. He scrambled to get a Medicaid waiver approved by the Bush administration just before Christmas of that year. But, the Bushies were too busy trying to find new work to even bother looking at Levine's last ditch effort. It became a dead letter when the Obama administration took over, relying as it did on privatization of services, installation of a private managed care gatekeeper, and turning W.O. Moss Regional Medical Center in Lake Charles into an outpatient clinic.

But, the most transparent display of the administration's intent played out in Baton Rouge and New Orleans and the fate of the two LSU hospitals there. The flooding of New Orleans after the levees failed in the wake of Hurricane Katrina knocked out The Reverend Avery Alexander ('Big Charity') LSU Hospital there. Governor Kathleen Blanco provided funding for the initial work of planning and developing a new hospital there to be built adjacent to a new Veterans Administration hospital. Governor Blanco also managed to get similar planning and development money approved for new LSU hospitals in Baton Rouge and Pineville to replace aging facilities there.

With the arrival of the Jindal administration, the Pineville hospital was dead. The LSU hospital in New Orleans, though, was too big to ignore and played too important a role in healthcare delivery in the Crescent City. Earl K. Long in Baton Rouge was another matter.

Early on, Jindal made it clear that his administration was willing to go ahead with plans for a new teaching hospital in New Orleans but that it would not go along with plans for a new LSU hospital in Baton Rouge. There was a quid pro quo of trading the Jindal administration's backing  new hospital in New Orleans in exchange for LSU not only acquiescing to the closing of Earl K. Long but coming up with some alternate plan to deliver something resembling the services offered at that hospital. It was something along the lines of, "Nice hospital you want there in New Orleans; it would be a shame if anything happened to it, wouldn't it?"

LSU Vice President Fred Cerise made this clear in a recent Times-Picayune article in which he said that LSU had entered into a deal with Our Lady of the Lake Medical Center because the Jindal administration had made it clear that it would not build a new LSU hospital in Baton Rouge. Cerise also revealed that, as a result of the deal, the cost of providing care to Medicaid patients in the Baton Rouge area will actually be higher than it was to provide the care at Earl K. Long.

So, here is a specific example of Jindal forcing a privatization deal, ostensibly under the guise of saving the state money (big deficit driven by Medicaid, remember?), yet the bottom line result of the deal will be to increase the cost of the Medicaid program in the very region where the deal will be executed. In short, Jindal's ideological bias against the public sector trumped the fiscal interests of the state by driving up the long-term costs of the Medicaid program.

Jindal opposes the Affordable Care Act, in part, because it will increase state spending on the Medicaid program. Yet, as the LSU deal with Our Lady of the Lake demonstrates, he is perfectly willing to drive up the costs of that program in order to serve his own interests.

Whatever ideological basis Jindal has for wanting to shutter the LSU hospital system, passage of the Affordable Care Act makes it a bad idea. Why? Because of the influx of new healthcare dollars into Louisiana and the expanded access to affordable coverage than nearly 1 million Louisiana citizens will have as a result of the new law. If anything, Louisiana will need more — not less — healthcare delivery capacity — in order to serve these newly insured people. From a practical standpoint, closing the LSU hospitals will swamp existing facilities with patients that they are not prepared to handle.

This has the potential to be a nightmare scenario in Baton Rouge because of the LSU/OLOL deal. Baton Rouge General's Mid City Campus and Lane Memorial Hospital opposed the deal partially out of fear that their facilities are closer to north Baton Rouge would be the most likely destination for Medicaid patients and the uninsured rather than OLOL's campus on the south side of the parish. Those hospitals will not be getting the higher rates of Medicaid reimbursements Levine and DHH have promised OLOL.

That's OK with Jindal and Levine, though, as it let's them advance towards their goal of closing the state's public hospital system. Again, ideology trumping the best interests of the state, the community, even elements of the private sector, and all of this despite a massive influx of new federal healthcare dollars via tax credits and appropriations.

Higher Education: Budget Hole Sets The GRAD Trap

Jindal's objection to revenue increases does not extend to college students and their families. In something of a surprise, in his executive budget for this year, Jindal did not propose to cut funding for higher education. He might have learned something from last year's intervention at the Mansion by four of his predecessors, but the more likely case is that he did not want to risk further embarrassment had he gone ahead with the cuts.

Instead, Jindal offered higher education a deal, telling the colleges that if they raised their graduation rates and he would let them raise tuition up to 10 percent per year without having to seek the approval of the Legislature. Two bills in the Legislature seek to turn the deal into law — HB 1171 and SB 570.

The deal won widespread praise as a sign of Jindal's new-found appreciation for the value of higher education. The goodwill evaporated as soon as the new budget hole surfaced and colleges and universities were ordered to prepare cuts in order to do their part to fill the hole.

Coming this late in the fiscal year, eight figure budget cuts would have a devastating impact on campuses across the state. Some schools would cancel summer classes and order months-long furloughs (that is, no paychecks) for faculty, support staff and administrators.

Jindal has proposed borrowing from his 2010-11 budget house of cards to help fill the new hole, the depth of which we will learn tomorrow.

At best, Jindal's proposed solution to this year's budget problems would be to push back the cuts into the next fiscal year.

The real impact, though, would be to render the GRAD useless. The impetus for the deal was that Louisiana college students take longer to graduate than do students in other states. The GRAD bills would require the schools to work to get students to pick up the pace. One way they might do that is by attending summer classes. That will not be an option of schools have to cancel those classes because of budget cuts.

So, if some version of the GRAD bills becomes law, the state's colleges and universities could have the prospect of the ability to raise their tuition dangled before them, but (because of continuing budget cuts) not have the means to achieve the benchmarks they need in order to actually gain that freedom.

This will all be made worse next year when, in all likelihood, the current round of Recovery Act support for higher education will dry up — unless Jindal's Republican Congressional friends have yet another conversion experience on federal spending.

So, flash forward to 2011. Higher education will continue to be at the mercy of the Legislature for tuition increases, be facing another round of steep budget cuts because Jindal (seeking re-election based on his "Louisiana Way") won't consider taxes or revenue enhancements not called "tuition increases", and a loss of millions of dollars of federal stimulus money.

Driving off that cliff might not inflict the same human toll as driving off the healthcare cliff, but crippling higher education with deeper cuts than have already been inflicted will damage the economic prospects of our young people and our state for decades to come.

All of this because Bobby Jindal wants to be the Republican nominee for president some day. Really, this is not about Louisiana; it's all about him.