Posted: Aug 7, 2010 9:53 AM
Source: Associated Press
Louisiana stands to receive more than $400 million in new health care and education aid from a pending $26 billion stimulus bill in Congress, but lawmakers and lobbyists sizing up the cash may be disappointed if they're angling for new spending plans.
The money will help to fill gaps in the state's health care budget and provide relief to local school districts.
However, it isn't expected to reverse cuts that were already enacted in the fiscal year that began July 1, and state Sen. Mike Michot, chairman of the Senate Finance Committee, said Friday that the dollars that could be used in the state's $25.5 billion budget are spoken for already.
Michot, R-Lafayette, said the money will help with some short-term gaps.
"It's a bright spot. Money is money. Help with the budget is definitely help. We'll take any help that we can get at this point," he said.
The dollars are contained in a bill approved by the U.S. Senate this week and expected to get final passage from the House early next week.
Based on estimates from state and federal officials, the bill provides about $510 million for Louisiana, but a $106 million slice duplicates other federal dollars Louisiana had been slated to receive so the net gain for the state is $404 million.
Of that, $147 million is earmarked for education. The state Department of Education said the dollars will flow directly to local school districts for their programs and can't be used to finance statewide education programs or other department initiatives that were cut this year.
Meanwhile, Michot said debt payments and an expected midyear deficit likely will eat up most - if not all - of the new $257 million that will flow into the state's Medicaid program from the legislation.
State lawmakers wrote this year's budget tapping into $90 million the Department of Health and Hospitals had planned to use to begin paying off a debt it owes the federal government to reimburse Medicaid money federal officials say was misspent years ago. Lawmakers required in the budget that if the state received additional money for the Medicaid program, the $90 million would return to DHH to be used for the debt payments, the first of which is due in January.
"There's a claim on that money," said DHH Interim Secretary Tony Keck.
The remaining $167 million likely will be needed to fill a deficit in the Medicaid program, Keck said.
The economic climate has pushed more people onto Medicaid rolls, and patients are using the program's services more. The health department will have an updated Medicaid forecast in November to determine the size of the problem.
Michot said he's been told the Medicaid deficit could be as high as $200 million, absorbing all the remaining federal money and still requiring cuts. Keck said the federal money shouldn't be spent until DHH has its November forecast.
"Planning to spend that money before we know what's right around the corner is not a smart thing to do," Keck said.
Even as it appeared the health care money could be already spoken for, the Louisiana Hospital Association was pushing lawmakers and Gov. Bobby Jindal to use the dollars to undo recent rate cuts to private health care providers that took effect this month.
That idea was immediately rejected Friday by the Jindal administration. A spokesman for the governor said Jindal wouldn't support any proposals that will boost spending this year and worsen
budget problems next year.
"Given the higher utilization we're seeing in Medicaid spending, uncertainty due to the federal moratorium on deepwater drilling, and given the last couple years of midyear budget cuts, it would be shortsighted to increase spending at this time," Jindal spokesman Kyle Plotkin said in an e-mail.