BATON ROUGE, La. (AP) — Senators opened their budget hearings Monday with questions raised by the Legislature's financial analysts about assumptions used by Gov. Bobby Jindal to balance next year's spending recommendations.
The nonpartisan Legislative Fiscal Office told the Senate Finance Committee that some of the savings the governor expects through anti-fraud efforts and privatization initiatives seem to be overstated, which could throw the 2013-14 budget proposal out of balance.
Shawn Hotstream, with the fiscal office, said the governor's budget for the fiscal year opening July 1 might have underestimated how much money it will cost to operate the LSU hospitals under anticipated privatization deals.
He said $580 million in uninsured and Medicaid financing is allocated to pay for care at the LSU hospitals that are anticipated to be turned over to private hospital managers. Of that, he said one-third would pay for the Baton Rouge privatization, raising concerns about whether there's enough money to pay for the half dozen other hospitals.
"We're saying there could be some potential problems," Hotstream said.
Deborah Vivien, an economist for the fiscal office, said Jindal's budget appears to overestimate the savings that would be generated by a new tax fraud initiative.
The Jindal administration estimates nearly $30 million would be saved in the Department of Revenue, and that anticipation is used to free up state funding for public colleges, Vivien said.
"For us, it's not certain enough to spend the money ahead of time," she said.
She said the performance of the initiative so far suggests the savings will be much lower than indicated.
The fiscal office also noted that some of the funds slated to help pay for public college operations under Jindal's plan don't currently contain the full amount of money expected to be transferred.
Jindal's top budget adviser, Commissioner of Administration Kristy Nichols, said she's confident the dollars used in the budget will be available for spending.
She said money was used to protect critical services in the governor's budget, and she said similar sources of financing anticipated in this year's budget have largely come in as expected.
The use of similar one-time dollars to pay for ongoing expenses has raised the ire of a group of conservative House lawmakers nicknamed the "fiscal hawks."
Finance Committee Chairman Jack Donahue, R-Mandeville, asked Nichols whether she knew if the House would support the use of the patchwork funding for next year's budget, as the budget proposal awaits its first vote in the House Appropriations Committee.
"Are y'all talking to the House about what they're inclined to do?" Donahue asked.
Nichols said she didn't know.
"I don't know the intention of the House in terms of the posture of the executive budget," she replied.