Edwards: Hospitals, LSU football in danger

Published 7:00 am Saturday, February 13, 2016

Thursday evening, Gov. John Bel Edwards laid out some grim economic news for Louisianans.

Edwards announced that rather than a three-quarter-of-a-billion-dollar shortfall, the state’s actual deficit for this fiscal year is likely to be closer to $1 billion, and the next shortfall for fiscal year 2017 may be $2 billion.

“And because the Louisiana Constitution does not allow us to fix either of these budget deficits in the regular legislative session this year, we have just three weeks, starting this Sunday, to make the changes we need,” he said.

Edwards has given lawmakers a list of 36 suggestions. The suggestions include deep cuts into every from college football programs to tax hikes. Tax hikes have traditionally been out of the question to the state’s conservative lawmakers and Edwards’ predecessor, Gov. Bobby Jindal. But Edwards said in no uncertain terms, now is the time for higher taxes.

“(W)e’re paying out more in credits and refunds to corporations this year than we are collecting from them in taxes. This is not sound financial policy,” he said.

Edwards said that for the past eight years, the governor and the legislature cut spending, and more cuts won’t solve the problem now. In fact, he argued, more cuts could do more harm than good.

“I want you to understand that, if left unresolved — if the legislature does not choose a way to raise additional dollars to strengthen the budget — very soon, we will face unimaginable cuts to vital state services,” he said.

Edwards pointed to health care in particular as one area that could not withstand budget cuts. In fact, the governor said that if the state does not find new revenue for the hospital system, Our Lady of the Angels Hospital in Bogalusa may have to shut its doors.

“Our health care system is on the verge of imploding,” he said. “The Department of Health and Hospitals is already facing severe cuts. And without new revenue, those cuts will be catastrophic. With larger cuts looming next year, safety net hospitals will close, starting in places like Lake Charles, Alexandria and Bogalusa.”

Such a move would be a sharp blow to the local economy and it would likely put residents who depend on nearby medical care at a disadvantage.

Besides healthcare, Edwards said cuts would come to higher education and agriculture extension offices, too.

“As I mentioned earlier, if the legislature fails to act and we are forced to proceed with these cuts, the LSU Ag Center and parish extension offices in every parish, and Pennington Biomedical Research Center will close by April 1 and the LSU main campus in Baton Rouge will run out of money after April 30, as will the Health Sciences Center in Shreveport and LSU Eunice,” he said. “There is no money left for payroll after those dates. The Southern University System, and University of Louisiana System, and the Louisiana Community and Technical College System are in the same boat: without legislators approving new revenue this special session, some campuses will be forced to declare financial bankruptcy, which would include massive layoffs and the cancellation of classes.”

Edwards said if this were to happen, that would put the kibosh on college football next fall.

Even two-year colleges would be hurt, he added. The governor said at present, community colleges at preparing to layoff 1,200 employees.

Edwards said in order to offset such measures, lawmakers must agree to statewide hiring freezes, a reduction in state contracts, dipping into the rainy day fund and some of the BP settlement money. But, he said, tax hikes — some of which may be temporary — must be part of the solution.

“These proposals include further reducing tax credits, suspending corporate tax deductions, and adding one penny of sales tax to our state’s four cent sales tax. I am proposing this penny as a bridge that will give us time to stabilize and restructure our state’s tax code. When that restructuring is complete, this penny sales tax will be removed,” the governor said. “As a part of this restructuring, I am also proposing an increase in alcohol and cigarette taxes.”

Lawmakers will return to Baton Rouge Sunday evening to begin crafting a fix to the state’s budget deficit. State Rep. Malinda White, who is a Democrat and represents Bogalusa, said she’s prepared to raise taxes if necessary.

“Nobody likes taxes, but what (former Gov. Bobby Jindal) did, did not work, and that’s obvious,” White said, last week. “I don’t think it should be a party issue. It has to be a matter of survival for Louisiana.”

However, Republican lawmakers may not be convinced more taxes are the answer.

State Treasurer John Kennedy released a statement that said, “It is clear to me that we have a spending problem. We should not burden our hardworking families with higher taxes. When the state is spending $1 million to install statues at LSU Medical Center instead of training doctors, it’s clear that our priorities are distorted.”

Kennedy is currently a candidate for U.S. Senate. He followed Edwards’ address Thursday and provided the official Republican Party response and rebuttal.