February 26, 2010 Governor Jindal Outlines Louisiana Way Forward for Facing Long-Term Budget Challenges, Cites Specific Steps Taken in Healthcare and Higher Education to Keep Moving Louisiana ForwardORIGINALLY PUBLISHED BY THE OFFICE OF THE GOVERNOR, BOBBY JINDAL

SHREVEPORT, Feb 26, 2010 - Today, Governor Bobby Jindal addressed the Shreveport 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 recently submitted the Executive Budget for the upcoming fiscal year, which 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, “The Louisiana Way Forward means that during these tough economic times, we’re pursuing reforms and efficiencies that make government do more with less. Families and business across Louisiana are tightening their belts and we’re doing the same for state government. While revenues are down, we could simply raise taxes and place the burden on the backs of our people and businesses. That’s the Washington Way. In Washington, the only solutions seem to be more taxes, more spending and more borrowing.

“We are absolutely opposed to raising taxes or borrowing money that we can’t pay back. That’s why we proposed a budget that does more with less and protects critical services for our people all without raising taxes. The Louisiana Way Forward will create a more accountable state government so that 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.”

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 Northwest Louisiana alone, Governor Jindal has announced economic development wins that will create 2,964 new direct jobs, 3,352 new indirect jobs, and an estimated $943 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 cited a number of statistics to describe the state of the system in Louisiana today, including that:

State appropriations for higher education doubled between the 1999 and 2009 fiscal years – the third greatest increase among states for that time period. 

SREB reports Louisiana’s six-year graduation rate for four-year universities is 38 percent compared to the 53 percent SREB state average – which ranks Louisiana as having the second worst graduation rate in the South
In FY 09 Louisiana ranked 8th in the nation for appropriations of state tax funds for operating expenses of Higher Education per $1,000 in personal income; and 7th in the nation in Higher Education appropriations per capita

According to SREB, 72 percent of Louisiana students are enrolled in four-year institutions and 28 percent in two-year schools, compared to averages in other SREB states of 55 percent of students in four-year schools and 45 percent in two-year schools.

Emphasizing that his FY 11 budget includes no reductions to higher education campuses, Governor Jindal said, “With the level of funding we prioritized for higher education in this budget, I stressed that this year is critical for higher education to put in place reforms to set them on a long-term path of sustainability and higher outcomes with improved graduation rates for our students.  The goals for higher education are clear: educational attainment in Louisiana must get in line with the economic development needs of our state, and we must no longer settle for having the second graduation rate in the South.”

Earlier this week, the Governor announced legislation that he will pursue in the upcoming legislative session that he said would tackle the current challenges of higher education head on and also meet higher education’s call for increased flexibility and autonomy in setting tuition.

The Governor’s proposal is called the “Louisiana Granting Resources and Autonomy for Diplomas Act” or the “LA GRAD Act.” The LA GRAD Act will grant colleges and universities increased autonomy and flexibility in exchange for a commitment to meet clearly defined statewide performance goals, including boosting graduation rates. 

Governor Jindal said, “The GRAD Act’s fundamental goal is to improve performance in our Louisiana colleges and universities and indeed make more of our Louisiana students graduates of their programs. 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.”

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