BRADENTON, Fla. - Louisiana Gov. John Bel Edwards blasted a plan by the House Appropriations Committee to slash the state health care budget, saying it "teeters between irresponsible and reckless."
The House proposal released Wednesday and supported by Republicans, who make up the majority in both chambers, funds the state's popular college scholarship program known as TOPS, or Taylor Opportunity Program for Students, largely through reduced funding for health care and other budgets in the 2017 budget.
House leaders said the plan supports their priorities for funding critical state services.
Edwards, a Democrat, said that the House budget does not reflect his priorities, and that he still intends to work with lawmakers to raise the necessary revenue to fund what he considers "critical services," such as TOPS, health care, and higher education.
"When we are talking about services that literally mean the difference between life or death and the future financial stability of our state, we should be working in a collaborative manner with a common goal," Edwards said.
Louisiana faces an estimated $600 million deficit in the 2017 budget, down from $750 million mostly because of changes in the number of Medicaid users, such as those expected to participate in a program expansion Edwards has ordered to cover uninsured who do not qualify for Obamacare.
The full House was expected to vote on the entire budget Thursday or Friday, before sending it to the Senate.
Edwards has said he plans to call a special session in June to discuss new revenue raising measures that he believes are necessary to support critical state services.
The Department of Health and Hospitals has said that the House's proposed funding level could provoke private vendors treating the poor and uninsured to walk away from their contracts, forcing some hospitals to close.
Some cuts are so severe, DHH said, that public medical education programs could end, eliminating training for nearly 2,000 medical residents.
House Appropriations Committee Chairman Cameron Henry, R-Metairie, told the Advocate newspaper that reaction to the budget has been "overblown," and DHH would still receive significantly more money than it does in the current budget.
Louisiana lawmakers are struggling to fund their priorities and critical services amid a severe decline in income, sales tax, and oil revenues. Funding problems are exacerbated by sales tax exemptions, corporate tax breaks, and incentives granted to new businesses.
The state's budget problems and higher education spending cuts contributed to downgrades at two Louisiana universities on Wednesday.
Moody's Investors Service lowered Southern University System's rating to the junk level of Ba1 from Baa2 due to "extremely thin liquidity, deficit operations, deteriorating financial reserves, and urgent need for capital investment" at the historically black college.
The University of New Orleans Research and Technical Foundation was downgraded to A3 from A2 based on declining enrollment and the state's low operating support, Moody's said.
Moody's maintained negative outlooks on the colleges it downgraded, as well as six other Louisiana universities at which the ratings were affirmed.
The unresolved structural imbalance in the state budget led Fitch Ratings to downgrade the state's $3 billion of outstanding general obligation bonds to AA-minus from AA last month.
In February, Moody's cut the state's GOs to Aa3 from Aa2, and cut all state bonds one notch, impacting $7.3 billion of total outstanding debt.