State's budget deficit for next year pegged at $963 million

BATON ROUGE (AP) — Lawmakers were told Friday that Louisiana's budget shortfall for next year is $963 million, in their first

detailed glimpse of the problems they'll face in crafting the state's next set of spending plans.

The figure, outlined by Gov. Bobby Jindal's

budget advisers, is the gap between state government's projected income

and the

costs to continue all its existing programs and services and

account for inflationary growth in the 2013-14 budget year that

begins July 1.

Barry Dussé, director of the Office of Planning and Budget, described the estimate as the "cost of doing tomorrow what you

are doing today."

He said more than one-third of the gap, about $355 million, was tied to a drop in federal Medicaid financing that also created

a deficit this year after Congress made the cut.

Another $250 million involves the loss of one-time dollars that Jindal and lawmakers used to pay for continuing programs,

nearly all of it for health care services.

Meanwhile, the cost of Louisiana's free

college scholarship program, called TOPS, will jump another $28 million

next year

on top of its $172 million current price tag, and the costs of the

state's pharmacy program for Medicaid recipients is expected

to grow by $71 million, Dussé said.

Another slice of the shortfall, at least $164 million, includes inflation costs, merit raises for state employees and other

items that lawmakers haven't necessarily funded in recent years.

Senate Finance Committee Chairman Jack Donahue, R-Mandeville, said the state can't afford to pay for some of the inflationary

growth, like raises for state employees and increased retirement costs. So, he said the shortfall in balancing next year's

budget won't be the full $963 million.

But he added, "It's still going to be a big number."

Commissioner of Administration Kristy

Nichols, the governor's top budget adviser, said the Jindal

administration is talking

with state agencies about ways to make programs more efficient,

coordinate and improve product purchasing and shrink costs.

"We certainly are anticipating balancing the budget without raising taxes," Nichols said.

That will mean new budget cuts to programs and services. Areas most vulnerable to slashing are health care and public colleges.

This year's budget stands at $25 billion. Since 2008, the state has made repeated rounds of cuts to services, laid off workers

and closed state-run facilities to close continuing budget shortfalls that have cropped up year after year.

After lawmakers wrapped up their work on the current year's spending plans, Congress reduced Louisiana's Medicaid funding

rate.

In response, the Jindal administration has

made deep health care cuts, largely to the LSU-run public hospital

system that

care for the poor and uninsured and that train many of Louisiana's

medical professionals. LSU leaders and the governor's health

secretary want to move more of the patient care and training

programs to private health care facilities.

Sen. Ed Murray, D-New Orleans, said the changes to the LSU health care network need to take into account next year's looming

budget problem.

"I want to make sure that as we are crafting plans to limp through the remainder of this year we won't have to come back and

start over from scratch to make further reductions," he said.