Importantly, the governor said the "DHH is gonna bear all $70 million of these cuts".
Below is a transcription of the statement Edwards provided before fielding questions from the media:
So that we can best serve the people of Louisiana and avoid unnecessary pain--the fact of the matter is DHH is gonna bear all $70 million of these cuts. I could not in good conscience put another cut on to higher education on the backs of college students after eight years of the deepest cuts to higher education in the State of Louisiana in terms of the state cuts in state general fund that exceeded those of any other state in the country. Also I was mindful the $28 million that I directed the Universities and community technical colleges to absorb from the current shortfall which operated as an additional cut on higher education in the current year. So this $70 million left in cuts to make before June 30, as follows: $30 million will come from savings for that we now believe you able to realize for the first time after our first four years standing up of our new private insurance plan coverage for most of our Medicaid clients under Bayou health;
A $10 million in efficiencies we are seeing the first few months that I've been in office because I have directed the DHH to run a more efficient department. We are seeing better more cost-effective monitoring of who is a Medicaid client now--and we are making sure that we capture all insurance reimbursements that we can to pay for services that we give to people. And then $30 million in savings that will include cutting every DHH contract with public-private hospitals by 1.5%, cutting other DHH contracts excepting the private, I'm sorry, public-private hospital offered to make payments to them under the Better Enhanced Medicaid Expansion Federal Match Rate and cutting rates we pay to Bayou Health manage care companies.
I want to point out with respect to this, we're cutting what we pay these managed-care organizations down to the minimum amount that CMS will allow within an actuarial range CMS are currently paying 50% percent, CMS will allow a reduction to 70%, I'm sorry to 7%, and that s's what we're going to pay.
So this will be the most efficient, leanest Medicaid program that we are allowed to run by CMS. So these cuts certainly are not easy to make but they will help finish out our responsibility to the people of Louisiana this year to balance our budget and prioritize a more stable government going forward for our citizens.
I do want to remind you that we still face an additional $750 million cut to the state budget for next year that starts July 1. That's relatively good news I guess because the administration started in January, we had a $2 billion problem for next year. I want to share a bold step that I'm taking as we change the way that we fund building construction projects in the state. We are taking a radically different approach to developing capital outlay this year.
We have removed more than $1 billion from the capital outlay bill by not reauthorizing much of the priority five projects that typically are simply automatically reauthorized each year. And I want to tell you I'm doing that-- first I made a commitment or my campaign to be realistic with our state construction dollars, to focus on fixing the roads and taking better care of state buildings and to stop over budgeting our capital outlay bill with projects people back home or in line to be funded, but which in reality, have little hope of ever beinng funded.
Just one example, how broken our capital outlay system--is back in December, for the first time in 30 years, we as a state had to make a short-term loan, just to have the cash to have continue projects that were already in progress.
We didn't want to sell bonds because i suspect we didn't want our credit burden evaluated at the time. But that's not the way to do business.
it is not appropriate to have projects in the capitol outlay bill that adds up to hundreds of millions of dollars beyond what the bonding capacity of the state of Louisiana, is.
So, we're going with projects that advances our greatest needs as a state, our most important infrastructure and taking care of long-over-due deferred maintenance that we need for our state buildings.
WE're going to continue to evaluate projects to determine what can be accomplished with existing funding and so i am only recommending the amount of projects with priority one funding. This is cash lines or credit priority two funding that we know are realistically as a state we can sell bonds to finance.
We will sell bonds this fall and next spring. As you know, we recently had our states' credit rating downgraded by Moody's and they further put us on a negative watch going forward.
They did this based upon the budget problems of the state of Louisiana. So, this means, the estimated future of annual bond sales are more limited than we would want them to be.
This impacts the number of building projects the state can realistically afford to fund. And, so, that means we're gonna start being realistic like any business under the circumstances would be about what we can afford and what we can't, and we are not going to make empty promises to the people of Louisiana. We're going to put more than $80 million in a project to specifically build and fix our roads that is a longtime priority for us, that is something I said I would do in the campaign. We're gonna put a significant amount of money towards major repairs and deferred maintenance on our state buildings-- both state agencies buildings as well as higher education and this includes roof repairs to state buildings, in particularly, those on university campuses around the state.
And I am making the decision not to build new buildings and put them on our college campuses and elsewhere because those buildings even though they're new and they're shinny and they're nice, they visit additional operational costs upon all of those universities and community colleges and technical colleges and quite frankly they don't have the ability to absorb those costs right now, so it just doesn't make sense to do that. So, we're going to move forward responsibly, in a transparent manner with respect to the way we move forward with capital outlay in the state. We're going to stablize our budget and prioritize taking care of our most important resources and our most important needs. We'll focus upon what matters in this state and build a strong future, going forward.
So that in a nutshell is what I'm proposing with respect to the $70 million in cuts and with respect to the capital oulay bill to the legislature and at this point as I indicated I'm happy to take some questions.
Make sure to watch the video for most accurate statement also for his responses to questions from the media, which is not included in this transcript.