Today, Governor Bobby Jindal addressed the Monroe Chamber of Commerce where he laid out the Louisiana Way Forward for facing the state's long-term budget challenges and national economic challenges so that Louisiana's economy continues to outperform the South and nation. Governor Jindal emphasized the difference between Louisiana's and Washington, D.C.'s approach to the national economic challenges.
Governor Jindal addressed the chamber just a few days after formally submitting the Executive Budget for the upcoming fiscal year. The Governor's budget includes no cuts for higher education schools or K-12 education, and it protects critical health care services -- all without raising taxes on families or businesses. Governor Jindal cited the budget as an example of the Louisiana Way Forward because it protects critical state priorities while forcing government to live within its means.
Governor Jindal said, "In Washington, they often say the focus is on creating jobs, but the only thing we see them do is borrow and spend. That's the exact opposite way we're moving Louisiana forward through these tough economic challenges. In Louisiana, we're taking bold steps to implement major reforms and new efficiencies so that government does more with less and lives within its means.
"Louisiana businesses and families are tightening their belts and state government must do the same. While revenue is down, we can either raises taxes on our people and business or we can find savings and do more with less. In Washington, the answer is to raise taxes and borrow their way out of the problem. In Louisiana, we're not going to raise taxes and put the burden on the backs of our people and businesses or borrow money that we can't pay back. That's why we proposed a budget that protects critical services all without raising taxes. That's the Louisiana Way Forward.
"By taking the Louisiana Way Forward, we're creating a more accountable state government. Even when our revenues grow back, we will not simply restore funding to the status quo, but instead, we'll make investments that produce results. Ultimately, the Louisiana Way Forward will create lasting change for our state and will be the type of place where all of our sons and daughters have the opportunity to pursue their dreams right here at home."
Recounting a number of statistics that show the strength of Louisiana's economy in the past two years, Governor Jindal said the results are not an accident, instead they are the result of his administration's concerted and unwavering effort to grow the state's economy by keeping taxes low, reducing government spending and providing businesses with the tools they need to succeed in a global economy.
Governor Jindal said that this approach has resulted in the creation of more jobs for the people of Louisiana. In fact, since taking office, Governor Jindal has announced economic development wins that will create more than 35,000 new direct and indirect jobs, and generate more than $4.6 billion in new capital investment. In Northeast Louisiana alone, Governor Jindal has announced economic development wins that will create 1,757 new direct jobs, 2,444 new indirect jobs, and an estimated $303 million in new capital investment.
Governor Jindal cited specific examples his administration is taking in the areas of health care and higher education to do more with less and still keep moving Louisiana forward.
Emphasizing federal reductions to the state's healthcare funding that make up the largest part of the state's budget challenges, the Governor highlighted an agreement he announced recently between LSU and Our Lady of the Lake Hospital (OLOL) that will save the state money and transform the way healthcare is delivered in Louisiana.
The Governor said if the faulty federal FMAP formula is not quickly corrected in Washington, D.C., it will cost the state $500 million a year in Medicaid funding, which will impact services for the poorest in our state, and often those who need care the most. He also said that federal changes to disproportionate share hospital (DSH) funding will cost the state around $200 million in federal health care funds, which will directly impact LSU hospitals, rural hospitals and mental health care services.
Governor Jindal said the state will make a $14 million investment to expand OLOL as part of a public-private partnership that will save the state $400 million by building onto existing facilities to better-serve Medicaid and uninsured patients in Baton Rouge while improving the educational experience of LSU's graduate medical school students.
The Governor called the agreement the first major step in addressing Louisiana's healthcare challenges and he said it will help shape the vision of what a modern, transformative system of care will look like in the state.
Governor Jindal noted that the state is working to transition the Louisiana Medicaid program from the current fee-for service delivery system to two integrated care models. One, he said, is an option for an enhanced fee-for-service Coordinated Care Network, and the other permits a Coordinated Care Network to choose to function as a prepaid integrated health network.
The Governor said his budget includes no eliminations to Medicaid services or changes to eligibility requirements. Governor Jindal's budget also replaces millions of the federal dollars the state lost due to the DSH program change with state sources of funding in the Office of Mental Health.
Governor Jindal said, "This investment in mental health services gives us the opportunity to begin a statewide transformation of mental health services into a community-based model of care rather than more costly institutional care."
Additionally, the Governor's budget replaces lost federal DSH funds for the LSU Charity Hospital System and rural hospitals -- so they are not forced to absorb severe reductions that would impact their services for our people.
Governor Jindal said, "In short, a health care system that integrates services to provide Louisianians with more access to a higher quality of care will mark the Louisiana Way forward in health care."
On higher education, Governor Jindal noted that Postsecondary Education Review Commission (PERC) -- charged with reforming higher education in the state -- adopted a report recently containing recommendations on improving the effectiveness and efficiency of our higher education system.
In PERC's report, they recommended that colleges and universities be granted limited operational autonomy and the ability to establish tuition and fees within guidelines in exchange for meeting specific performance goals.
Governor Jindal said, "This is an important goal that we fully support so higher education is able to operate with greater autonomy. However, we must connect this autonomy to accountability and ensure our higher education institutions are working to correct their unacceptably high drop out rates.
Louisiana is the only state in the nation that requires its public colleges and universities to seek a two-thirds vote of the Legislature to adjust tuition to levels comparable with other states.
Governor Jindal said, "Unfortunately we are also singled out as one of the worst states in terms of outcomes for our college students, with the second to last graduation rate in the South and likely the nation. This is unacceptable and must be addressed."
In 2005, Virginia passed the Restructured Higher Education Financial and Administrative Operations Act. All of the state's public institutions were eligible for increased autonomy over their daily operations, but to qualify, each had to commit to meet a series of state higher education policy goals and performance measures.
The Governor said this concept could serve as a model for Louisiana to implement many of PERC's recommendations for not only streamlining functions to save money, but improving outcomes for Louisiana students.
Governor Jindal said, "As we consider granting higher education greater flexibility in setting tuition, we must do everything possible to ensure the value of the education that our students are paying for. We must ensure that our students' higher education will lead to a marketable education credential and the skills that will enable them to compete in the 21st century global economy. A higher education system that has more autonomy and produces more results for our students will mark the Louisiana Way forward in post-secondary education."
Emphasizing that his proposed budget includes no cuts to higher education schools, the Governor said, "This is important not only because we view higher education as a critical state priority, but because this gives institutions more time to make the important reforms to improve their outcomes.
Jindal added, "We have the second lowest graduation rate in the South. We wouldn't accept that kind of performance on the football field and we shouldn't accept it for our students. We will continue to work with higher education leaders in the months ahead to reform their system and drive better outcomes."