News > Press Releases
Jan 24, 2013
Governor Bobby Jindal’s FY 15 Budget
Budget Sustains Economic Growth for Future Job Creation and Business Investment
The 2015 Executive Budget Proposal is further evidence of our commitment to strengthen the private sector economy of Louisiana and sustain the reforms that have put the state on a path that secures its future as a world leader in the new global economy. This budget proposal increases higher education funding, K-12 funding, healthcare funding without cuts to provider rates and services, funding for disability waiver slots, and funds performance adjustments to eligible state employees.
Evidence of success in government reforms must be measured in terms of direct benefit to taxpayers who pay the state’s bills. Realizing that fact, our work began in 2008 to shrink the size of government so that we could grow the private sector economy instead of the public sector economy and create more good paying private sector jobs. Louisiana has confronted many challenges in recent years and emerged from each trial better equipped to rise to new levels of success. Louisiana’s growing economy now enables us to include $25 million in the state’s Budget Stabilization Fund.
The year 2013 was a record year for business expansion and investment in Louisiana. Our approach has not only been to foster a business climate that would attract world-class corporations to our state, but we also sought to strengthen and expand those businesses that make up Louisiana’s core industries. By pursuing a multifaceted approach that both cultivates traditional industries that invest and expand here as a result of our state’s vast natural resources and also working to open new markets for new businesses, we are working to diversify our state’s economy in order to ensure stable growth over time.
Since 2008, we have announced economic development wins that are resulting in more than 80,000 new jobs and more than $50 billion in private capital investment. Because of these job wins, more people are employed than ever before in Louisiana. Tens of thousands of jobs are now in the pipeline that must be filled, and our next challenge is to ensure we have the skilled workforce to fill these jobs of the future. Our top priority, therefore, for this Legislative session is to invest in K-12 and higher education as well as workforce training to make sure our people have the skills needed to fill the thousands of jobs coming to Louisiana.
In order to meet these goals, this budget increases state general funding for higher education and increases total higher education funding by $141.5 million - a 6.6 percent increase over last year. This funding includes a new higher education workforce incentive initiative of $40 million that will better prepare Louisiana students to compete in the new global economy. These funds will be made available to state research institutions that produce nationally recognized commercial research and to state colleges and universities that partner with private industry to produce graduates with high-demand degrees and certificates to enable them to link their coursework to industry needs and projected workforce demands.
Having a skilled workforce requires that every child has the opportunity to get a world-class education. Over the past six years we have implemented a number of reforms to help accomplish this goal. We know that every child learns differently, and that is why we have taken a comprehensive approach to education reforms. This work is paying off.
The number of failing schools in our state has been cut in half over recent years as the high school graduation rate has reached an all-time high of 72.3 percent. Teacher salaries have increased by $2,000 over the past five years, and school funding has increased by more than $300 million. The number of college credits earned through Advanced Placement exams has increased by 25 percent to more than 1,000 credits – the largest increase in state history. All Louisiana students must now take the ACT, and more students are now qualifying for college. We fully fund TOPS with an investment of more than $82 million so that thousands of Louisiana students can continue to receive assistance for their college education.
To make certain these trends continue, we are increasing the Minimum Foundation Program (MFP) to its highest level ever and by its largest annual increase since 2009. We are increasing total funding for K-12 schools by $102.8 million - a 2.99 percent increase over last year; $461.1 million since 2008 - a 14.75 percent increase since 2008. Total investment in the MFP stands at $3.54 billion, an increase of $99.8 million or 2.9 percent over last year and an increase of $415.1 million or 13.28 percent over January 2008.
Unlike the private sector, government can often fail to adapt and innovate in its work simply because many believe that the public sector should not be held to the same standard as the private sector. We disagree. Thanks to the ongoing efforts of thousands of state employees, however, we are seeing millions of dollars saved through efficiencies brought about by the insight and work of men and women who run government like a business. This year we are able to award performance adjustments to all eligible state employees because the reforms they have helped establish are working.
For decades, Louisiana had a state-run charity hospital system as a safety net for healthcare services. Faced with problems of growing costs, antiquated healthcare delivery, and major Medicaid cuts from the federal government, this system could not be sustained. Change was inevitable.
We were committed to improving the quality of care for every citizen of Louisiana when we established public-private partnerships in every region of the state. The results are already proving this was the right path for our state.
Hundreds of millions of dollars are being saved; access to quality healthcare is improving; and the new community hospitals are providing a level of service that far surpasses what was available in the past. Along with this coordinated level of service, medical education for our state’s future doctors is also being strengthened. Councils on Aging across the state will also receive a $5 million increase for their work with Louisiana’s elderly population.
We are also investing $10 million in new state funding that will dramatically expand access to home and community-based services for some of Louisiana’s most vulnerable residents. This expansion in funding will open nearly 2,500 waiver slots across programs for both individuals with developmental disabilities and people who are elderly or have adult-onset disabilities. This will begin filling over 2,250 previously frozen waiver slots and adding 200 new NOW waiver slots, the Department’s most comprehensive waiver program for people with developmental disabilities.
The work we have begun is not complete. There is more work to do, and we cannot rest until it is done. This budget proposal is an expression of our vision for a smaller government footprint, a vibrant state economy, and a growing capacity to build our future together as we strive to make Louisiana second to none in our nation and world.
-- Governor Bobby Jindal
Economic Advance: Expanding Opportunities for Louisiana’s Changing Workforce
Since 2008, reforms and innovations in state government have made Louisiana a destination for businesses looking to invest and create jobs. Changes enacted to help state government run more like a business have strengthened the confidence of business and industry leaders at every level across the state and the nation to invest and expand in Louisiana. From the start-up entrepreneurial efforts of native Louisianians who desire to invest their ideas in their home state to the re-location and expansion efforts of large corporations, the state continues to be nationally and internationally recognized for its economic development accomplishments.
The 2013 Kauffman Index of Entrepreneurial Activity (a leading indicator of new business creation throughout the United States) ranked Louisiana among the Top 10 states with the highest rate of entrepreneurial activity. The report found that approximately 400 out of every 100,000 adults in the state created a new business in the state each month – up from 265 out of every 100,000 adults in 2008.
Corporate expansion and productivity within the state’s borders ranked Louisiana No. 8 in the U.S. Chamber of Commerce’s 2013 annual report of Enterprising States. Louisiana was ranked as the No. 1 exporting state in the nation as exports from the state grew to 107 percent of the state’s overall capacity – a result that more than tripled the growth rate of 35 percent in the United States as a whole. As a result, Louisiana now ranks No. 6 nationally and No. 2 in the South for employment growth since January 2008. It is one of only 17 states in the U.S. (excluding D.C.) that experienced steady employment gains since 2008.
In 2013, Louisiana achieved its best economic development performance in the past six years, setting the stage for what is now record employment in the state. In 2013 alone, Louisiana attracted dozens of expansion and relocation projects that will result in about 27,000 new jobs and $26.4 billion in new capital investment as the projects are completed. Major new projects announced in 2013 include IBM's selection of downtown Baton Rouge for an 800-job technology center; AAR Corp.'s 750-job aircraft maintenance, repair and overhaul (MRO) operation in Lake Charles; Teleperformance's 740-job expansion of its Shreveport customer contact center; Bell Helicopter's 115-job assembly facility at the Lafayette Regional Airport; CB&I's relocation of 400 professionals from around the nation to its Baton Rouge-based Government Solutions group; Rain CII's 71-job corporate headquarters relocation from Houston to Covington; Lockheed Martin's 166-job LNG tank manufacturing operation at NASA's Michoud Assembly Facility in New Orleans; Gulf Coast Spinning's 307-job manufacturing facility in Bunkie; the Wingspan Portfolio Advisors 532-job expansion of a residential mortgage center in Monroe; and a Danos headquarters and manufacturing expansion that will create 426 new jobs in the Houma and New Iberia areas. These are just some of the examples of the remarkable job growth that is coming to Louisiana as a result of our economic development success.
From November 2012 to November 2013, the state’s work force grew by 20,500 jobs, marking the 29th consecutive month of year-over-year employment growth in the state. Since January 2008, Louisiana has added 50,800 private-sector jobs, making the overall growth rate of private-sector employment rise to 3.2 percent – a rate that ranks the state fourth best in the nation (excluding D.C.) and second best in the South. For 39 consecutive months, Louisiana has experienced private sector job growth and an unemployment rate that remains below that of the Southern region and the United States. Per capita income in our state has grown by $4,255 during the past five years and is at its highest level ever. Since 2008, the state’s GDP has grown by $36 billion, representing a rate of growth that is nearly 50 percent faster than the national GDP.
The FY 15 Executive Budget
The Executive Budget for FY 15 reflects the priority of economic growth and shows the success of reforms enacted since 2008. The FY 15 Budget sustains these reforms so the Louisiana economy can continue to advance unimpeded by governmental bureaucracy and unnecessary regulations.
Private Sector Model for Public Sector Size/Performance
In order for state government to run efficiently, public servants dedicate their lives to the day-to-day operations of the people’s business. Excellence in public service is a necessity in order for critical services to be provided to the citizens of Louisiana. The people who serve Louisiana have worked to harness technology to maximize their productivity and innovate in ways that have created savings across the lines of service for each state government agency. For their dedication to the people of Louisiana, the FY 15 budget includes performance adjustments of more than $60 million for all eligible state employees.
Based on figures from the Department of State Civil Service, between December 31, 2007 and December 20, 2013:
State Government: Solving Problems and Sustaining Reforms
Unlike the private sector, government has often not reflected the best practices and real-world realities of fiscal responsibility and increased productivity brought about by technology and innovation. The FY 15 Budget reflects the accomplishments of Louisiana’s public sector leadership and employees. Through continued consolidation of offices and functions, modernization of equipment, and streamlining of processes, Louisiana’s public sector will realize savings as well as maintain and increase investments in critical services and protect higher education and healthcare.
Across the nation, K-12 schools and institutions of higher education are experiencing unprecedented changes that require innovation and adaptation for the needs of 21st century students. This reality requires greater access to quality education brought about by advances in technology, choice, and measurable evaluation of educators at every level.
Focus on learning benchmarks in the early grades, better teacher training and accountability, and a new window of opportunity for students once trapped in failing schools through the Louisiana Scholarship Program have strengthened public education across Louisiana. Combined with the passage of the GRAD Act 1.0 and GRAD Act 2.0, a new focus on student outcomes at colleges and universities has worked to provide a more comprehensive approach to education reform in the state.
A critical component of this ongoing collaboration between K-12 students and institutions of higher education is Course Choice – a new pathway where students can prepare for college while in high school as well as take part in courses not offered at their high school.
Since 2008, education funding has been more targeted to strengthen critical needs by becoming more student focused. By removing duplication of effort across education policy areas and streamlining the processes for teachers and administrators to comply with existing state education priorities, students across Louisiana (both K-12 and higher education) are reaching higher levels of achievement.
K-12 Education Funding
Minimum Foundation Program
To continue our work in strengthening K-12 education we are funding an increase to the MFP formula of $69.1 million that will maintain FY 14 levels in the FY 15 budget. An additional $12 million will be combined with another $26.5 million based on anticipated student growth in Louisiana for a total increase in K-12 funding of $102.8 million, which includes the largest increase in the MFP since FY 09. The MFP has increased by 13.28 percent since 2008.
The continued access for students to Advanced Placement (AP) courses, career and technical education opportunities, core academic and test preparation courses, and other college credit courses will be sustained with an investment of $3.5 million.
Louisiana Scholarship Program
Since its inception in 2008-2009 school year, more than 6,700 students have received an equal opportunity to escape a failing school through the Louisiana Scholarship Program. These scholarships for low-income families will increase by $3 million for a total of $46 million invested into the program.
Higher Education Funding
Higher education has changed its focus toward student success measures specifically directed at student graduation rates, retention, and completion. As a result of this change, an increase of more than $141.5 million will be invested in the colleges and universities of Louisiana.
Total funding for higher education for the FY 15 budget is $2.3 billion - an increase of 6.6 percent from last year. More than $700 million has also been invested in the capital needs of the campuses since 2008. Through a partnership with the City of Baton Rouge and the Baton Rouge Area Foundation, we have dedicated approximately 30 acres and committed approximately $45 million for the construction of the new Water Campus, including a new education and research center on the old Baton Rouge Municipal dock, a state of the art River Modeling Center, and a building to house CPRA and other coastal researchers as an integrated community focused on researching, engineering and implementing solutions to protect coastal communities and sustain coastal wetlands.
Higher Education – Workforce Investment Fund
To strengthen the critical linkage between college coursework and employment needs in the State of Louisiana, we are pleased to invest $40 million in a new higher education workforce incentive initiative. We applaud the Board of Regents and higher education system leaders for their work in developing this innovative policy proposal.
In order to receive the funding, the college and university must receive a 20 percent private industry match that is accompanied by a proposal as to how the funds will be invested in meeting the future workforce needs of Louisiana based on data-driven occupational forecasting.
To ensure that the nursing and engineering programs at Southern University and the STEM programs at Grambling State University, respectively, have the latest technology, $2 million will be invested for facility and technology upgrades.
Taylor Opportunity Program for Students (TOPS)
More than $82.5 million of continued investments will fully fund the Taylor Opportunity Program for Students (TOPS), Louisiana’s merit-based scholarship program that awards qualifying students tuition payments for up to eight semesters at any eligible Louisiana institution. The projected number of TOPS recipients for FY 15 is 52,074, with a total funding of $235.1 million. We also remain committed to Louisiana's needs-based scholarship program, Go Grants, with an investment of $26.4 million.
Realizing the Promise of a Transformed Health Care Delivery System
The past six years have been marked by major change in how Louisiana delivers, manages and pays for health care. From implementing the Bayou Health program that is already improving how 900,000 individuals access health care to transforming Louisiana’s public hospital system, the Department of Health and Hospitals has embraced change to improve how it provides and finances care for Louisiana’s residents. In the coming fiscal year, DHH will strengthen this foundation and build upon the progress of these transformational initiatives while advancing the spirit of innovation and improvement.
Progress through Partnerships
The most significant change over the past year has been the shift from the antiquated model of a government-run public hospital system to a system that embraces the ingenuity and efficiency of experienced private partners. The new model of Public-Private Partnerships sustains access to safety net care while supporting and improving graduate medical education in Louisiana.
The partnership between LSU and Our Lady of the Lake Hospital is in its first year of operation, and its clinics have already cared for more than 100,000 patients. The new around-the-clock urgent care center in North Baton Rouge has treated more than 23,000 patients since it opened and the system’s Mid City Pharmacy has filled more than 63,000 prescriptions, and reduced the wait time for prescriptions from ten days to ten minutes. The Lake recently opened its LSU Medical Education and Innovation Center, which is a state-of-the-art facility that expands the footprint of academic medicine for Baton Rouge, making the community a destination for physician training, medical care and research. OLOL is on track to become a Level I Trauma Center.
In Lafayette, private partner Lafayette General Health has reopened clinic and hospital capacity that had previously been shuttered or scaled back, including its reopening of a pediatric clinic and returning its orthopedics unit to full-time status. The hospital has also hired a full-time oncologist and is on track to become the region’s first Level II Trauma Center. Previously, new cancer patients had to wait as long as six months for an initial appointment.
In New Orleans, Louisiana Children’s Medical Center took over the operations of the Interim LSU hospital. Since completing the partnership, the hospital has increased the emergency department capacity and added fourteen medical/surgical inpatient beds and nine inpatient psychiatric beds.
Under its partnership with Lake Charles Memorial Health System, W.O. Moss in Lake Charles has established a new urgent care clinic, which means that more patients are able to see a physician outside of expensive and ineffective emergency room settings. The partnership in Lake Charles has also led to the introduction of several new specialty care clinics, including an orthopedic clinic and a breast health clinic. Patients who were previously referred out of town for these critical services can now receive them in their home community.
In Houma, the partnership between Terrebonne General Medical Center, Ochsner, and the Leonard J. Chabert Medical Center has resulted in improvements to patient care with the hiring of new physicians, including a new cardiologist, urologist and family health physician. Two new mammogram units have been installed at the hospital. Now testing can be done in a single visit with same day results.
In North Louisiana, the Biomedical Research Foundation is the private partner now operating the hospitals in Shreveport and Monroe – University Health Medical Center Shreveport and University Health Medical Center Conway. Patients in Shreveport are already seeing reduced wait times for emergency room services. In both Shreveport and Monroe, patients have reduced wait times for CT and MRI scans. Additionally, at UH Conway in Monroe, the hospitals now offers the new services of orthopedic surgery, cardiology and urology.
A Foundation of Better Care
The state’s Bayou Health program is completing its second year of operation with nearly 900,000 enrollees transitioned from the legacy fee-for-service Medicaid program to a health plan of their choice. Already, DHH has realized a cost savings over what the state would have spent in the absence of managed care and a recent federally required independent review of the five Bayou Health plans confirm 98 percent full and substantial health plan compliance across more than 4,000 collective state and federal regulations.
Improvements in care under Bayou Health are evident. The average length of an adult’s inpatient hospital stay has decreased across the board - from more than four days under legacy Medicaid to less than three under Bayou Health, which represents far fewer hours away from home in expensive hospital rooms. Claims data reveals a significant reduction in statewide neonatal intensive care unit (NICU) days paid by Medicaid, meaning more babies were carried full-term. Bayou Health has furthered the goals of the Birth Outcomes Initiative, claims data for which reveals a reduction of 23,000 in statewide neonatal intensive care unit (NICU) days paid by Medicaid, meaning more babies were carried to full-term.
Also nearing the end of its second year, the Louisiana Behavioral Health Partnership has provided a new approach to both delivering and financing behavioral health services for Louisiana’s children and adults through a fully integrated, single-point-of-entry system. Under this model, Louisiana uses an integrated public behavioral health service system drawing on the strengths of the private, public and non-profit sectors. This will provide enhanced access to a more complete and effective array of evidence-based behavioral health services and supports, while also improving individual health outcomes.
The LBHP has served 79,000 children and 72,000 adults with serious mental illness, major mental disorders, acute stabilization needs and/or addictive disorders. This exceeds the program objective of treating at least 50,000 children, and also displays great progress toward reaching the goal of serving 100,000 adults.
The LBHP continues to improve how Louisiana citizens with behavioral health issues receive care. Since implementation, noticeable expansion of services, increased numbers of enrolled members and a dramatic expansion in the provider network have occurred. This is particularly demonstrated through the 87 percent increase in adult inpatient bed capacity through the Magellan network of providers.
Continuing Bayou Health's Progress
DHH will build upon the foundation created by Bayou Health by applying the lessons learned and best practices of an effective managed care program in new services areas and populations. In the spring of 2014, the Department will launch its managed care initiative for dental services through a competitive procurement for a single statewide plan designed specifically to promote oral health and improve access to care for eligible Medicaid individuals. In FY 15, the Department plans to allow previously excluded populations that receive certain long-term supports and services to voluntarily opt-in to Bayou Health, allowing these groups to take full advantage of the additional resources and care coordination available through the health plans. The Department also continues to work with stakeholders and providers to explore and build a strong comprehensive model for managing the care of some of our most vulnerable individuals with disabilities and frail elders that rely on community or institutional support services through our Managed Long-term Supports and Services (MLTSS) initiative.
Furthering the Louisiana Behavioral Health Partnership
OBH successfully implemented the Louisiana Behavioral Health Partnership (LBHP) in March 2012. Within the LBHP, OBH launched the Coordinated System of Care (CSoC) in five regions to better coordinate comprehensive care for children and youth with significant behavioral health challenges or co-occurring disorders who are in, or at-risk of, out of home placement. Statewide implementation of CSoC is anticipated to be completed by the end of FY 14.
Birth Outcomes Initiative
Since August 2010, the DHH Birth Outcomes Initiative (BOI) has engaged community members and key stakeholders to develop evidence-based practices to improve women’s and infant health. In April 2011, with heavy stakeholder input, BOI finalized its strategic plan, which included a paramount goal of ending elective non-medically indicated deliveries before 39 weeks.
To achieve this goal, DHH has forged a strong partnership with the Louisiana State Medical Society, and the Louisiana Hospital Association. Together, these organizations have worked diligently to end voluntarily this practice. Since 2012, every birthing hospital in Louisiana has signed a pledge that they will not perform elective deliveries prior to 39 weeks. In March 2012, the Office of Public Health began collecting new data from birthing hospitals on the LEERS Birth Record to provide insight regarding reasons for elective delivery prior to 39 weeks. The data collected assists DHH and providers to identify and monitor elective deliveries that occur prior to 39 weeks.
Thanks to the efforts of these partners, DHH has realized tremendous success in this endeavor. To continue the good work that had begun, DHH will initiate the next phase of this initiative in FY 15 by implementing payment reforms to promote best practices for mothers and babies. Medicaid will no longer pay for services related to elective deliveries that occur prior to 39 weeks without a medical reason. DHH anticipates that this will reduce NICU admissions for the babies who would have been born early, reduce cesarean sections and reduce complications for moms. This saves taxpayer money while improving the health outcomes of new moms and babies.
An investment of $10 million in new state funding will expand access to home and community-based services for some of Louisiana’s most vulnerable residents. This expansion in funding will open nearly 2,500 waiver slots across programs for both individuals with developmental disabilities and people who are elderly or have adult-onset disabilities. This will begin filling over 2,250 previously frozen waiver slots and adding 200 new NOW waiver slots, the Department’s most comprehensive waiver program for people with developmental disabilities. The FY 15 budget proposal includes more than $606 million in spending on waivers, an increase of almost 6 percent when compared to FY 14’s proposed budget of $573.9 million
Last summer, in response to a budget shortfall in the final FY 2014 budget, DHH implemented heightened utilization controls for its home and community-based services provided through federal waivers programs. In order to effectively manage spending to the Department’s appropriated budget, DHH reserved waiver slot openings for only those individuals that met criteria such as those in emergency situations, individuals who were transitioning out of state facilities and children aging out of other programs. This investment allows the Department to lift these restrictions and begin filling all currently appropriated slots.
This action, coupled with the addition of 200 newly appropriated waiver slots, will immediately begin reducing the current waiting list for services across all waiver programs. Through its process of making waiver slot offers to waiting individuals, DHH expects that this investment will ultimately reduce the current wait by over 4,000 individuals. DHH will also take active steps to significantly reduce the waiting list for services for people with developmental disabilities through a system transformation effort that will help people access the right services faster by validating and re-prioritizing the list.