Brown Bag Lunch #5: Louisiana's Budget — Giving It All Away

Brown Bag Lunch #5 centered on Louisiana's recurring budget problems. Jan Moller of the Louisiana Budget Project and Representative Katrina Jackson of Monroe were the speakers. Both made the case that the state's budget problems are self-inflicted wounds that are the result of run-away tax expenditure policy.

Mr. Moller maintains that the policy dates back to the initial attempts to undo the impact of the voter-approved Stelly Plan. Rep. Jackson says that at least one-third of the state's budget problems can be traced directly to tax expenditure policies initiated by the Jindal administration. She also makes the case that it is irresponsible to be making cuts in essential state services without knowing the true cost of the state's tax expenditure program — that is, those programs through which the state waives and exempts taxes, or rebates tax dollars to companies and individuals.

In the first video from the event, Mr. Moller makes the basic case that the seemingly endless string of budget shortfalls are problems governor and lawmakers created themselves.


In the second segment of his talk, Mr. Moller says that the state's budget problems will get worse before they get better and that a combination of external and internal forces might force, at the very least, a cost-benefit analysis of the 464 tax exemptions the state has on its books. Those exemptions cost state government $4.8 Billion every year.



Representative Katrina Jackson is the author of HB-1104 which would require that agencies and departments administering state tax breaks, incentives, exemptions, and rebates, provide annual reports on the fiscal and economic impact of those tax expenditures. She said her bill brings transparency and accountability to an area of the state budget where none currently exists.



Representative Jackson said the purpose of HB-1104 is to bring the same kind of transparency and fiscal responsibility to tax expenditures as is applied to line items in the state budget. She agrees with the Louisiana Department of Revenue and the Legislative Auditor that tax expenditures are every bit as real expenditures of state dollars as are line items. There needs to be the same level of accountability applied to those expenditures. They must deliver a return to the state on those investments.



On Tuesday, the Revenue Estimating Conference announced that the state will experience another revenue shortfall in the current fiscal year that ends on June 30. The hole is estimated to be just under $300 million. Cuts in programs will have to be enacted in order for the Governor and Legislature to comply with their constitutional mandate to keep the budget in balance.

Greenstein Officially Replaces Levine as Jindal's Healthcare Hack

Bruce Greenstein replaced Alan Levine as Bobby Jindal's Secretary of the Department of Health & Hospitals (DHH) in 2010, but it wasn't until the second week of 2012 that Greenstein succeeded Levine as Jindal's partisan hack on healthcare.

The official coming out event in Greenstein's transition from technocrat to political operative was Greenstein's full-out attack on the Louisiana Budget Project (LBP) for their having pointed out the obvious — namely, that there are a lot of jobs tied to the state's $7 billion Medicaid program.

In a statement to Gannett's Capitol Buruea, Greenstein went ballistic.

"It's a fallacy to say reductions in Medicaid rates impact the economy," Greenstein said. "The liberal Louisiana Budget Project is simply making the same tired case for raising taxes and maintaining the status quo that has gotten us 49th in health outcomes.

It's not clear what about the LBP report so upset Greenstein. After all, the LBP report only echoes claims being made by the Louisiana Hospital Association (LHA) for a number of years, dating back to the period before Greenstein's arrival at DHH.

In reports the LHA issued in 2009 and 2011 on the economic impact of hospitals and healthcare in Louisiana, the LHA quantified the number of hospital jobs tied to Medicaid spending by region and by member hospitals.

In 2009, when the Jindal/Levine regime was threatening cuts of $300 million or more due to budget deficits caused primarily by the repeal of portions of the Stelly Plan, the LHA detailed the importance of Medicaid to hospital and healthcare employment by region and by hospital in a report entitled "Hospitals: Economic Agents in the Louisiana Economy" (PDF).

Included in both reports is information on the size of the healthcare segment in Louisiana — more than 250,000 workers employed in more than 11,000 locations, with an annual aggregate payroll in excess of $8 billion.

The LHA 2009 report declares, "The payroll of the healthcare sector in Louisiana is larger than the payroll of any other industrial classification in the state."

The LHA's 2011 report, "Hospitals and the Louisiana Economy, 2011" (PDF), makes the Medicaid/jobs link explicit and detailed: "In Louisiana, approximately 19% of net revenues are Medicaid- related. Medicaid-related expenditures lead to the creation of 47,483 jobs with personal earnings of $1.8 billion." (Page 6 of the 44-page PDF).

The LBP declaring that there is a link between Medicaid spending and job creation, then, is not radical or liberal. It is just a restatement of established fact made so by the industry that has first-hand knowledge of the impact of that funding — the hospital industry.

Sure, the LHA has a lot of skins in the game but that didn't seem to be a concern when Jindal, the Louisiana Oil & Gas Association (LOGA) and their cronies were whipping up the anti-moratorium hysteria back in the summer of 2010.

Greenstein's claim that there is no connection between jobs and the flow of more than $7 billion through the state's economy in the form of Medicaid-paid healthcare delivery is ludicrous on its face. In effect, he's arguing that there is no connection between the revenue that hospitals, clinics and doctors have and the number of people they employ.

That's not a fallacy. That's a delusion.