Who's Protecting Higher Education?

by Pearson Cross

While Amendments 1 and 2 will shield some health care providers from the budgetary whims of Gov. Jindal, they could make higher ed even more vulnerable to cuts.

Nov. 4 promises to be a busy day. In addition to electing a veritable herd of congressional representatives, district attorneys, judges, marshals, aldermen and school board members - roughly 4,400 candidates running for 2,400 offices - Louisianans will also be asked to vote on something likely to be a good deal more lasting than a mere elected official: 14 amendments to the Louisiana Constitution.

The 14 amendments on which voters will decide this Nov. 4 were passed in the 2013 and 2014 legislative sessions by a two-thirds majority of both houses. They must now pass a statewide referendum to take their place in the Constitution alongside the 175 amendments previously passed by voters to the 1974 Louisiana Constitution, which replaced the 1921 Constitution bulging, at the end, with 521 amendments of its own. The question of the advisability of passing yet more amendments to add to a growing constitution, or whether each amendment would solve a constitutional problem (or create another one) is left to the voters, who have, it must be admitted, little experience in complicated constitutional questions, although a great deal in voting "yes" or "no" on amendments. The public debate surrounding the advisability of adopting each amendment will not be aided or enlightened by the plenitude of political advertisements certain to accompany the more contentious offerings. The most contentious and debated amendment in this election cycle will be Amendment 1 and its companion, Amendment 2, which are prompted by the Jindal administration's penchant for playing fast and loose with state dollars, from whatever source acquired.

Amendment 1 seeks to protect a fee currently charged to health care providers. Today, nursing homes, community pharmacies and emergency care centers that care for low-income patients are assessed a fee that is then used by the state to "draw down" additional federal dollars to help pay for uncompensated or under-compensated care. By design, this enlarged pool of private and federal dollars is intended to be returned to those providers who paid the fee, thereby paying for the care given to those unable to pay for services. Amendment 2 is similar, creating, in the absence of one, a "Hospital Stabilization Fund" that would allow hospitals providing care to low-income patients to benefit from matching federal dollars. As with Amendment 1, providers would ideally receive more money back than they initially put into the fund.

Despite opposition from the Jindal administration, both House Bills 533 and 532, which were to become Constitutional Amendments 1 and 2, passed overwhelmingly, receiving the support of 89 percent of the Senate and 92 percent of the House in the first case, and 86 percent of the Senate and 94 percent of the House in the second. Their passage as constitutional amendments prevented a certain veto from the Jindal administration, because state law does not allow the governor a veto over constitutional amendments, only acts of the Legislature.

In operation, Amendments 1 and 2 would alter (or create) these funds, remaking them as "constitutional funds." Once given constitutional status, these funds would then be protected against use for purposes other than the one for which they were created. This stratagem seeks to thwart the aims of money-hungry state administrators, or, more to the point, Bobby Jindal, who, engaged in a desperate and continual effort to balance the budget without raising taxes, has routinely swept funds such as this into the state's general fund for use in areas unrelated to their origination or design. State health care operators, understandably upset about this diversion of their money, have besieged their local legislators for relief. That relief has come in the form of Amendments 1 and 2.

As lagniappe, the legislators added an additional provision to Amendment 1 that guarantees providers retain a floor reimbursement level from the state, tying the return to "average Medicaid Program rates established for Fiscal Year 2013-2014." Although it is, in theory, possible for future governors to reduce these payments in times of budget stress, there are a number of conditions surrounding any such reduction, specifically that the reduction does not "exceed the average reduction of those made...for other providers," and "the reduction is consented to in writing by two-thirds of the elected members of each house... ." Given the power of the health care lobby it is unlikely that two-thirds of the Legislature would find sufficient backbone to oppose them and lower the remuneration rates once set in place.

The Jindal administration opposes Amendments 1 and 2 for the simple reason that they reduce the flexibility of the administration to address budget shortfalls and exigencies. The budget crises of recent years, which were brought on by the economic downturn as well as some over-zealous but bi-partisan tax cuts, led to reduced spending in many areas funded by state government, but most especially health care and higher education. This crisis has been exacerbated by the Jindal administration whose opposition to new taxes, or even the renewal of existing taxes as in the case of the 4-cent cigarette tax, is legendary.

What Jindal's budgetary intransigence has produced is the infamous "fund sweep," where the department of administration reviews the budgets of state government departments, institutions, commissions and related operations to find enough money to keep state government going, albeit with painful cuts.

No supplicant's plea has deterred Kristy Nichols, Jindal's commissioner of administration and the most recent and ardent architect of the inelegant and cobbled-together budgets typifying the Jindal era, from her task. What has resulted from this repeated scramble for funds is that entities with powerful friends have sought protection. That protection for nursing homes, intermediate care facilities, community pharmacies and hospitals has come, at least partly, in the form of Constitutional Amendments 1 and 2.

Left quite unprotected, however, are the state's four university systems, which find themselves nearly alone in the state's general fund, wholly dependent on year-to-year tax revenues to maintain even level funding.

This singular exposure does not bode well for their collective economic future. While university officials understand the motivation that led to the creation of Constitutional Amendments 1 and 2, they are certainly wondering what the effect will be on already straitened state budgets. Perhaps they too need a constitutional amendment?

Dr. Pearson Cross is an associate professor in the Political Science Department at UL Lafayette. He holds a Ph.D. from Brandeis University (1997), and his principal areas of teaching are state and local politics, Southern and Louisiana politics. Contact him at [email protected].