Proposed state budget calls for few cuts, lots of restructuring

Gov. Bobby Jindal's administration proposed a lean, $25 billion state budget today for the 2012-13 fiscal year that contains little in the way of fat or surpluses but manages to plug a projected $900 million revenue shortfall without making drastic cuts to any single department or state agency.

Higher education—which has already suffered a $50 million mid-year cut—emerges relatively unscathed in the proposed budget; and the hugely successful TOPS program, which provides tuition assistance to students attending state colleges and universities, would be fully funded.

Instead, the cuts come largely from the elimination of nearly 6,400 positions from state government, as well as from significant restructurings to state programs and agencies, most notably an overhaul of the state pension fund. On the revenue side, the budget calls for using a variety of one-time funds to balance the books.
Commissioner of Administration Paul Rainwater unveiled the executive budget to the Joint Legislative Budget Committee at the State Capitol today.

While the budget proposal at first glance is good news to higher ed institutions, it assumes state colleges and universities will raise fees and tuition in order to meet their revenue projections, a fact lawmakers were quick to point out. It also leaves in question whether institutions like the Pennington Biomedical Research Center, which is under the LSU System but has no students on whom it can levy fees and tuition increases, will get the revenue it needs to maintain current operating levels.

Higher education will also lose more positions than any other state agency—2,837 of the proposed 6,371. But Rainwater says most of those positions are unfilled and that "only a couple" of actual jobs will be cut from the state colleges and universities.

Much of Rainwater's presentation to the Legislature focused on restructurings of state agencies and departments. One of the biggest and most controversial is the overhaul of one of the four state retirement systems, LASERS, which is contributing to a massive debt. Lawmakers wanted to know why LASERS alone was singled out, and why state employees are being asked to increase their contributions to the system from 8% to 11%.

"We're basically taxing our state workers," says Rep. James Armes, D-Leesville.

Other savings in the proposed budget come from changes to the Department of Health and Hospitals. The state's new Medicaid program is gradually being introduced this year and will change health-care delivery for the poor. The administration says the new system is more efficient and cost-effective. It will also result in the elimination of more than 1,500 positions from DHH.

The Executive Summary of the Budget provides a thorough overview of the administration's plan for the next fiscal year but still leaves out many details about specific programs in specific parishes. There were a few inclusions of projects and programs in the Capital Region. Among them:

• The Department of Transportation and Development will implement a Streamlining Commission recommendation to eliminate the White Castle ferry, which carries between 150 and 200 vehicles a day. Estimated savings are $800,000 a year.

• Nearly $379,000 will be cut from the Capital Area Human Services District within the Department of Health and Hospitals.

• More than $433 million and five positions will be cut from the budget of Jetson Correctional Institute as part of a restructuring within the Office of Juvenile Justice, which is moving to a new, more efficient model of juvenile rehabilitation.