Jindal Administration Unveils Budget Cuts; $50 million More Sliced from Higher Education

BATON ROUGE–-Saying the administration was trying to reduce the impact of budget cuts to higher education and health care, Commissioner of Administration Paul Rainwater on Friday outlined $251.3 million in reductions to meet a mid-year budget deficit.

Rainwater laid out a series of cuts to state agencies that include $50 million in reductions to higher education and $62 million to the Department of Health and Hospitals.

Specific reduction amounts to the state’s five higher education systems are expected late Friday.  Cut plans are due to be submitted to the Board of Regents by December 29th.

“We need to act today in order for departments to cut,” Rainwater told the Joint Legislative Committee on the Budget.

Rainwater said Governor Bobby Jindal, using his executive powers, has ordered state agencies to absorb a 5 percent cut to lessen spending reductions to higher education and health care.  If the reductions had not been made, Rainwater said, colleges and universities would have had to suffer even higher reductions—$62 million for higher ed and $101million for health and hospitals.

“We’re going to work with Dr. Purcell (Higher Education Commissioner James Purcell) to make sure TOPS is protected and students are protected,” Rainwater told committee members.  And he said, Purcell and the Regents would give individual higher education systems their specific reduction targets.

Higher Education cuts were mitigated by $62 million that is being diverted to the State General Fund as the result of a recently-approved constitutional amendment.

Rainwater also said health care agencies, including public hospitals, would be “tweaking” their budgets to see if additional cuts could be made.

“We’re going to every agency line by line, program by program, dollar-by-dollar in order to see if we can be more effective do more with less,” Jindal told reporters Thursday night.

The governor, by law, has 30 days to present the Legislature with a balanced budget proposal for the state’s $25.3 billion spending plan, but Jindal said he didn’t want to wait that long.

“We’ve already got a hiring freeze in place that has already saved millions of dollars,” Jindal said. “We’re going to be working with legislators to get the plan done.”

The Revenue Estimating Committee threw the governor a curveball Wednesday when it said the state needed to make an additional $198 million in immediate cuts. Jindal said he is hopeful that number would decline by the time the fiscal year ends July 1.  The $251 million figure represents additional expenses includes $43 necessary to cover a hole in funding for the state’s K-12 public schools.

“We’re assuming the worst-case numbers of the two sets of numbers that was presented,” he said. “Go ahead and make those reductions starting tomorrow on top of the hiring freeze that’s already in place.”

The budget rebalancing is needed in the current fiscal year that ends June 30 to account for a downward revision in the state’s income forecast. The state’s revenue projection panel dropped its forecast this week, saying Louisiana is collecting fewer dollars than expected in personal income and severance taxes.