Kennedy brought his message of fiscal common sense to Mulate’s last Wednesday at the behest of the Breaux Bridge Area Chamber of Commerce.
The attorney and former Revenue Department secretary warns that raising taxes now would throw the state into a recession.
Kennedy, who was unsuccessful in getting the Commission on Streamlining Government to embrace many of this recommendations, has been taking the fight to Main Street, speaking to Rotary Clubs and at Chamber gatherings outside of the capital.
He warns that the state budget has ballooned, mostly through one-time or inflated revenues associated with Hurricanes Katrina and Rita.
The only solution is to cut spending, especially the cost of labor, Kennedy said.
His 16-point program toward a savings of $2.6 billion has been published as an opinion piece in various newspapers:
•Do not raise taxes or fees. We do not need to. It won’t work anyway. Ask California.
•Louisiana has 258 state jobs per 10,000 people (federal Bureau of Labor Statistics). The national average is 143. Eliminate 5,000 positions each year for three years by not filling one-third of the state’s job vacancies each year. Annual savings: $500 million
•Require a minimum span of control of one manager for 10 state workers, like Texas and Iowa. Twenty-two percent of Louisiana state government managers supervise one employee (legislative auditor). The average manager supervises four. Annual savings: See No. 2.
•Eliminate 10 percent (by value) of the state’s 16,000 consulting contracts. Annual savings: $750 million.
•Renegotiate the state’s remaining consulting contracts and require a 5 percent reduction in cost. Annual savings: $337.5 million.
•Use centralized collection, automated notices and tax refund offsets to collect the $1.5 billion in accounts receivable owed the state, 58 percent of which is 180 days past due. Annual savings: $200 million.
•Implement Louisiana law (LRS 22:1065, LaHIPP) that allows the state to purchase private insurance for low-income citizens when it is cheaper than Medicaid. Annual savings: $100 million.
•Change state law and enforce federal law to reduce the annual 900,000 taxpayer-funded emergency room visits for non-emergencies by 25 percent. Annual savings: $67.5 million
•Review all Medicaid hospitalizations for medical necessity. In 2009, 80 percent of the 218,784 Medicaid hospitalizations, costing $900 million, were not reviewed (Legislative Auditor). Annual savings: $180 million.
•Establish physician training agreements between our Charity Hospitals and Louisiana hospitals with a high Medicare patient mix to capture Medicare medical education funding. Annual savings: $160 million.
•Reform the state Medicaid Preferred Pharmaceutical Drug List to include the most effective drugs at the lowest price for each illness. Annual savings: $100 million.
•Reduce the $254 million in administrative costs for the state Medicaid Program by 10 percent. Annual savings: $25 million.
•Require state prisoners to pursue a GED as an incentive for probation or parole, like Florida and New York, to reduce our recidivism rate. Annual savings: $33 million.
•Give refundable state income tax credits (like the federal Earned Income Tax Credit) to parents of students in under-performing public schools to send the kids to better-performing parochial and private schools. Annual savings: $57.5 million.
•Establish a self-sustaining state revolving loan fund to finance local capital outlay projects at reduced borrowing costs. Annual savings: $75 million.
•Postpone the state’s current “LaGov ERP” computer upgrade until a cost-benefit analysis can be done. Savings: $50 million.
Total Savings: $2.636 billion