Yesterday, Louisiana House Speaker Jim Tucker accomplished two things at a Capitol press conference wherein he broke sharply with Gov. Bobby Jindal on budgetary matters; he struck a blow for the fiscal discipline that many of Jindal’s detractors have pined for from the governor, and he served notice that he’ll be going out in a blaze of glory after he’s term-limited out of the House this year.
From the Times-Picayune’s article on Tucker’s comments come some rays of sunshine…
“The reality is, this budget still has a lot more cuts left in it,” Tucker said, adding that he doesn’t think the votes are there in the House to sell three state prisons or to raise college tuition and fees by $98 million, as Jindal is advocating.
Tucker also took a shot at the much-maligned plan to build a $1.2 billion replacement for Charity Hospital in New Orleans the governor is pushing, saying that the current plan to bond out some $425 million of the total needs to be reworked.
Jindal’s plan to privatize the three state prisons has essentially face-planted at the legislature. Democrats can’t stand it because it would turn state employees into private-sector employees, and Republicans don’t like it because they see selling those prisons as a quick-fix solution which, over the long haul, could put the state in a position of ultimately increasing costs. While in general prison privatization can work, the only way it will do so is if that privatization creates a market that allows the state to shop among competing entities in placing inmates – using factors like cost, security and rehabilitation rates as metrics for proper placement. Jindal’s plan doesn’t particularly further that end, and as such while it would raise money this year and serve to reduce the number of state employees (which desperately needs to be done) it’s not a winning plan for legislators to sign on to.
“The House would prefer to make cuts as opposed to selling the prisons,” Tucker said, adding that said many House conservatives view the prison plan as “tantamount to borrowing our way out of the (budget) problem.”
Tucker’s view on the proposed tuition increase at Louisiana public colleges reflects the angst of many House members who face re-election this fall; those members know that parents of college students will be cranky about higher tuition costs amid runaway price increases for food and gasoline. In the long term, his stance is probably the wrong one, as Louisiana’s tuition rates are far too low in comparison with other states. This has two effects; first, it puts the taxpayer on the hook for too much tuition for too many students who don’t earn degrees – as in, 62 percent of the public college population who fail to graduate in six years. And second, by too closely regulating tuition at the state legislature Louisiana is denying its colleges and universities the freedom to chart the courses which make sense for them and their students. Too much command and control and too little liberty and competition has made for poor results in Louisiana’s higher education.
That notwithstanding, his general direction is the right one. Louisiana’s budget is too large for its economy to sustain. Tuition increases, while perhaps being good policy for other reasons, do not resolve the spending issue – they merely paper it over.
Some of the speaker’s other comments are heartwarming indeed…
- Tucker said he is “very confident” about getting a two-thirds majority vote for his bill to merge the Southern University at New Orleans with the University of New Orleans. Although the bill faces strong opposition from the Southern University System and the majority of black lawmakers, Tucker said opposition within the Louisiana Legislative Black Caucus is not unanimous.
- The speaker said the state’s tight financial situation means there likely won’t be room for legislative earmarks in this year’s budget bill. In most years members of the House and Senate set aside anywhere from $20 million to $60 million in “member amendments” for pet projects in their districts.
- Tucker raised questions about $300 million in state financing that has long been set aside to help pay for the New Orleans teaching hospital, and said the Legislature might look to shift unspent hurricane-recovery money into the project instead of relying on state bond financing.
- Tucker said he’s been told that $225 million of the state’s share still needs to be borrowed through financing approved by the Bond Commission. But Division of Administration spokesman Michael DiResto said most of the state’s share has already been approved by the financing panel, and that only $95 million remains as a non-cash line of credit.
- Tucker said he does not agree with the administration’s plan to sell the Office of Group Benefits, which provides health insurance to some state employees, to a private company. “I don’t see where the value is” to the state, Tucker said.
The SUNO-UNO merger might not pass the Senate. But if it passes the House it will at least be an election-year issue that will help conservatives across the state. Outside of the poisonous race issue which SUNO’s supporters have raised ad nauseam throughout the debate, there has been startlingly little offered in defense of a $40 million entity which graduates eight (or five) percent of its students in six years. The majority of the state’s voters want some efficiencies sought in state government, and SUNO is low-hanging fruit.
The death of legislative earmarks is as manna from heaven. Should Tucker actually carry that off, he’ll be a hero in his political retirement.
The Office of Group Benefits privatization probably is a good idea, despite the Speaker’s objections, but there is a consensus among most political watchers that the governor’s office simply hasn’t made a sufficient case for it – as Jim Beam noted here yesterday.
But it’s the Charity Hospital issue which might ultimately be the most interesting.
Back in 2003, when Jindal was first running – unsuccessfully, as it turned out – for the office he now holds, one of his key talking points was that Birmingham and Houston had built medical research communities which created lots of high-paying jobs and attracted tons of dollars in investment, both private and public, and that New Orleans was well-suited to compete for those jobs and dollars with the right commitment to do so. While Jindal has since largely abandoned the other health-care plank in his platform, namely a redesigned system where state Medicaid and indigent dollars follow the patient rather than prop up brick-and-mortar operations, he’s held on to the “if you build it, it will come” concept of a gigantic complex for research.
And that’s puzzling. Because frankly, the justification for a huge multi-hospital campus just north of downtown New Orleans fell apart when city officials (namely, former Katrina reconstruction czar Ed Blakely) pushed the VA hospital out of the area designated for it. And now, a study from health-care experts Kaufman Hill indicates that the hospital the governor wants built is far too big for the needs of the region, will have too many beds for the patient load, isn’t guaranteed to generate the momentum toward the research community the governor seeks and will impose a cost burden the state can’t afford both from an operating revenue standpoint and a bonded indebtedness standpoint. There is some $800 million available to rebuild the hospital according to actual need without having to take on those costs, and the battle has boiled down to LSU, which is in charge of the Charity system, against virtually every other political actor in the state. And Jindal is on the wrong side.
The Governor is even at odds with Louisiana’s Republican senator David Vitter on the subject. Yesterday, Vitter sent a letter of protest to University Medical Center Board chair Bobby Yarborough, asking that the latter reverse a decision to postpone a scheduled May 5 meeting of the board to review the Kaufman Hill findings. Vitter specifically pointed out several damaging facts laid out by the study…
- States that the plan “is materially larger than is supportable.”
- Estimates that the plan will require very large annual operating cost subsidies from the state budget–over $100 million per year.
- Documents that the current number of hospital beds per capita in the region is already above the national average, and that the mega-Charity plan will make that disparity worse–3 beds per thousand compared to 2.7 per thousand national average.
- Concludes that the plan has unrealistically high estimates of patients who will choose the facility–both privately insured (many will have negative perceptions of any Charity rebuild) and indigents (all have many more choices post-Katrina).
Vitter said he suspects that a postponement of the meeting would result in back-channel politicking to alter the Kaufman Hill findings; he’s having none of that. In fact, since the beginning of the rebuilding discussions Vitter has said that his first choice is to gut the existing Charity Hospital shell and rebuild a new, state-of-the-art facility within it. He has also suggested that a second alternative would be to significantly reduce the bed size and footprint of any new construction hospital. He’s been actively opposing Jindal’s plan, going so far as to meet with federal HUD Secretary Shaun Donovan and asking him to deny Louisiana the mortgage insurance for the bonded indebtedness for the “Mega-Charity” plan.
It’s clear Jindal is on the wrong track here, and Tucker might just be doing the governor a favor by suggesting he’s not going to be able to borrow money to build the $1.2 hospital. Applying Katrina recovery dollars instead allows for a potential compromise and a chance for Jindal to save face.
It’s been a lousy week for the Jindal administration, but it’s a week which has been coming for some time. When the governor presented a budget plan that was more creative in its financing than the bulk of the state’s electorate was looking for, he was always going to run afoul of the more conservative House of Representatives – and now he’s gotten his reality check. More fundamental change in the structure of state government is required, and now Jindal knows it. And on the Charity issue, the governor has picked a lame horse; he’s going to need someone to ride in with a replacement.
Tucker might be that rider. This might be his last political hurrah, but based on what he laid down yesterday, he could be going out a winner.