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Saturday, March 20, 2010
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Streamlining Commission votes on recommendations
Bill Feig/The Advocate
The White Castle ferry is one of four ferries recommended for closure by a state com-mission looking for ways to cut costs in state government.
A group set up to devise ways to cut costs in state government recommended Tuesday closing ferries, trimming Medicaid expenses and privatizing the laundry work at juvenile prisons.
The Commission on Streamlining Government is tasked with helping state officials grapple with a $3 billion state budget shortfall over the next two years.
Commission members must finalize a list of recommendations for Gov. Bobby Jindal and the Louisiana Legislature by the end of the year. Lawmakers would decide which of the proposals to enact.
That list of suggestions approved by the full commission now includes closing four ferries, including the one at New Roads once the new bridge opens. Ferries at Melville, White Castle and Reserve also are suggested for closure.
Another idea is to trim administrative costs in the Medicaid program by at least 5 percent.
The full commission deferred some controversial ideas. The panel decided to delay a decision on:
n Temporarily increasing the employee share of Group Benefits premiums.
n Reducing the number of state government jobs by 5,000 a year.
A discussion on the number of state contracts spurred heated debate at the commission’s regular meeting and at an advisory group gathering earlier in the day.
Officials of an advisory group to the commission said that Louisiana needs more oversight over state government contracts that totaled $4.7 billion in a recent year.
“This is a big issue that we need to deal with in the next budget session,” said Roy O. Martin III of Alexandria, chairman of the Advisory Group on Outsourcing, Privatization and Risk Management.
The advisory panel makes recommendations to the full commission.
Martin and others questioned state officials on the sheer volume of contracts, and whether some of the work could be done in-house.
Sandra Gillen, director of the state Office of Contractual Review, said her office reviewed 7,295 contracts totaling $4.7 billion in 2007-08.
Martin said similar contract totals have “been going on for decades.”
“It seems to be a lot of contracts and an incredible amount of money,” he said.
The advisory group delayed any recommendations.
Commissioner of Administration Angèle Davis said she has asked for a review of contracts that go through her office, including where most of the dollars are spent.
Later in the day, at the full commission meeting, State Treasurer John Kennedy said he is shocked by the volume of contracts.
He said a reasonable person could debate whether some of them are a priority expenditure.
The commission’s chairman, state Sen. Jack Donahue, R-Covington, said he wanted the appropriate people to be there to defend the contracts.
He also questioned whether the commission could review 11,000 contracts.
Commission member Leonal Hardman with the AFL/CIO said some of the contracts are ridiculous.
Hardman objected to the notion of laying off state workers when the contracts are out there.
The commission agreed to meet later to discuss contracts.
A proposal to cut administrative costs in the state’s Medicaid program also triggered heated debate.
Kennedy pushed for the program’s administrative costs to be trimmed by 20 percent in order to save $50.4 million.
Kennedy wanted the rest of the commission to advance his idea to the governor and legislators.
Instead of endorsing Kennedy’s idea, the commission backed a much smaller cut.
Medicaid is the government’s health insurance program for the poor and uninsured. The federal government wants the state to pick up more of the cost for the program.
“If we’re going to prioritize, administrative costs are at the bottom of the list,” Kennedy said.
Kennedy said the shortfall cannot be addressed without focusing on Medicaid because health care is heavily contributing to the state’s financial problems.
Charles Castille, undersecretary of the state Department of Health and Hospitals, said the agency will lose payments if people are not in place to monitor Medicaid providers.
Castille said the federal government may come through with a two-year reprieve on increased state costs in the Medicaid program.
“We can’t count on the fairy godmother — Congress — bailing us out again,” Kennedy told Castille.
Martin said he and others need a workable target on proposed cuts.
“I need a number,” he said.
Castille said administrators sometimes save money in a program.
Martin suggested limiting cuts to the Medicaid program’s administrative costs to “at least 5 percent.”
Kennedy objected, arguing that every hospital in America has had to cut administrative costs this year.
The commission voted 6-2 in favor of Martin’s change to the recommendation.
Will Sentell of The Advocate’s Capitol news bureau contributed to this report.
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