La. Senate backs spending plan for state surplus

La. Senate backs spending plan for $113M state surplus, plan at odds with House GOP

Associated Press

BATON ROUGE, La. (AP) -- The Louisiana Senate on Monday backed a plan to use a $113 million state surplus to fill a gap in this year's Medicaid program, rather than repay the state's "rainy day" fund.

That proposal, approved 38-1, is at odds with the position of a group of conservative House Republicans who say the dollars should replenish the Budget Stabilization Fund as current law requires.

The disagreement involves a budget bill that makes changes to the current state spending plan for the fiscal year that ends June 30. The proposal heads back to the House and will be part of ongoing negotiations over a package of budget bills to finance state government operations for the current and next fiscal years.

The legislative session must end Thursday.

Under current law, any surplus money left over from the 2011-12 fiscal year, up to $205 million, is required to replenish the rainy day fund, which was tapped to address a previous deficit.

The Senate bill would repeal that provision, which had been reached as part of a budget deal last year between the House and Senate in order to get House backing to use the rainy day fund. House Republicans said they never would have agreed to support the final budget without the provision to repay the rainy day fund.

Since that budget deal was struck, Congress cut Louisiana's federal Medicaid financing, blowing a hole in this year's health care budget.

Gov. Bobby Jindal addressed only part of the budget hole after the congressional change was announced in July — and pushed to use the surplus to balance the rest, letting the issue linger for months as the fiscal year wound down.

The Senate proposal would follow Jindal's request, with supporters saying the state can't remove that much money from health care services with only one month remaining in the budget year.

The budget bill also includes dollars to fill gaps in this year's public school financing formula and a reworking of education spending to address a recent Louisiana Supreme Court ruling on the state's voucher program that declared it unconstitutional to pay for vouchers through the public school formula.

Also in the bill is upfront lease payment money from privatization deals for several LSU-run hospitals that care for the poor and uninsured. Those dollars will be used to cover a current year shortfall in funding to the hospital system.

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