NEW ORLEANS, LA (WVUE) - The latest financial crisis at the state capitol is daunting, to say the least. A shortfall of at least $1.4 billion is forecast for the new fiscal year that begins on July 1, and public health care services are being considered for steep cuts.
"We need to make sure that we protect Louisiana residents and our health care dollars," said State Sen. David Heitmeier, D-New Orleans.
Heitmeier is Chairman of the Senate Health and Welfare Committee.
The Jindal Administration asked the Department of Health and Hospitals to look at trimming between $200 and $250 million in its budget. But the fallout would be much worse than that amount because of the impact on matching federal dollars the state receives.
"So right now it's about a 38-cents to 62-cents for the federal government, so when you're talking about $250 million, you're talking over $750 million dollars in total impact," said Heitmeier.
He said the actual financial effect would be something felt throughout the state's economy.
"That really equates to over, almost a billion dollar of total impact, so that will not only have just a health care cut, but that will have an economic impact for health care in general when you talk about taking a billion dollars out of the economy," said Heitmeier.
"It really doubles the impact on people and programs," said State Rep. Wesley Bishop, D-New Orleans.
Bishop calls the level of cuts being considered for the state's health care system appalling.
"People are going to suffer, you never cut that amount of money without it hurting people, and without it hurting programs and it's unfortunate, it seems as if we always try to balance our budget on the most vulnerable people in our society," said Rep. Bishop.
DHH would not provide specifics of which areas of health care could see less funding. But Heitmeier said some programs tied to the Medicaid Program which provides insurance to the poor are not optional like the federal Medicaid "Disproportionate Share Hospital" payments known as "DSH."
"DSH is a billion dollar optional program, adult pharmacy is another optional program, but those are so vital to the services of the Louisiana people that just eliminating that is just not foreseeable," Heitmeier stated.
"We have a lot of people who fall through the cracks, everybody knows folks in their family that doesn't have insurance," said Bishop.
Heitmeier said as the legislature tries to avoid deep cuts everything has to be on the table, including expenses tax credits the state has been doling out.
"You keeping that right now saying that we have over $8 billion dollars on the books as far as tax credits, so what are the ones that are non-performing, that are not creating jobs?" he said.
And Rep. Bishop said he is not opposed to a special session to look for ways to avoid some of the cuts state government faces.
"To get up there, try to put our heads together to try to figure out a better way to deal with it because this obviously isn't the best way to deal with it," he said.
"This is all taking place right now because of the price of oil," said Heitmeier.
State government gets substantial revenues from the oil and gas industry. Still, budget problems have been persistent in the state for years.
Gov. Bobby Jindal is firmly against any new taxes to increase state revenues. Jindal is expected to present his proposed budget for the new fiscal year in February.