The Associated Press October 22, 2010, 4:27PM ET

Jindal orders $107M in cuts to balance La. budget

Gov. Bobby Jindal said higher education, health care and social services will take the largest cuts Friday when he orders reductions to rebalance the budget and close a $107 million deficit.

The executive order, expected later Friday, comes after the Joint Legislative Committee on the Budget accepted the latest budget figures accounting for the deficit.

Higher education will take one-third of the cuts, about $35 million, with the bulk hitting the LSU System. The state Department of Health and Hospitals must cut $21 million to help eliminate the deficit -- and another $50 million to account for a separate shortfall in the state Medicaid program. A $12 million cut will hit the social services department.

Jindal said he expects college administrators and state agency chiefs to "do more with less," and he charged them to show "real leadership" in continuing services while facing shrinking budgets. He particularly singled out public colleges, suggesting they need to reduce their administrative costs and provide students with a better educational value.

"We need to deliver more services even while spending fewer dollars. We don't need whining, we don't need complaining. We need leaders to provide vision," Jindal said at a news conference, outlining the cuts.

Most agencies have yet to explain what they'll cut, but public colleges have said they'll lay off more than 100 employees, shrink student scholarship offers and trim travel and supplies.

The LSU System said it will cut spending on its animal disease lab, shut down the top two floors of a new research building at its Pennington Biomedical Research Center and lay off 54 employees at its agricultural research center.

The deficit is from the budget year that ended in June, the first time in nearly a decade the state ended a fiscal year in the red. Officials blamed lower-than-projected corporate tax revenue.

The state isn't allowed to deficit-spend, so Jindal must rebalance this year's $25.5 billion budget to account for the problem of the last budget year. For a midyear deficit, the governor is able to cut up to 3 percent of total funding for each "budget unit" without legislative approval.

Jindal announced the planned cuts only two hours after his top budget adviser, Commissioner of Administration Paul Rainwater, told lawmakers that he couldn't detail the reductions to them and didn't have a complete plan devised.

Rainwater's response prompted complaints during the budget hearing that the governor's office had been working on the cuts but wouldn't provide the committee with any details.

"Don't blindside us. This has been the repeated approach of this administration, to give us generalities," said Rep. Karen Carter Peterson, D-New Orleans.

After news of the governor's announcement trickled down to the budget hearing, Peterson asked for "a public apology for blatantly being lied to" by the administration.

The deficit -- which comes even after three rounds of cuts and adjustments last year -- is the latest in a series of budget troubles for the state, which is bracing for a $1.6 billion shortfall for the fiscal year starting July 1, preparing for a lawsuit that could add a $200 million shortfall this or next fiscal year and still coping with a series of budget cuts in the last two years.

"This is just the beginning," Rainwater warned.

The state's Medicaid program also has a separate current-year shortfall because more people are using the health services than expected. Jindal said his executive order will require cuts in that program to address that shortfall.


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