In recent months, Gov. Jeff Landry has created a Louisiana version of DOGE – Elon Musk’s federal government dismantling agency – and proposed a “standstill” state budget for the 2025-26 fiscal year, though a fiscal cliff still looms in coming years. While overall state funding will remain at relatively the same levels this year, health care spending, including in the popular Medicaid program, would see an increase under the governor’s proposal. The Louisiana Illuminator’s Julie O’Donoghue explains:
Louisiana’s heath care budget is set to increase almost $1.5 billion next fiscal year under the spending plan Landry unveiled a few weeks ago. Medicaid is fueling the growth, accounting for $19 billion of Landry’s proposed $21.4 billion health care budget. Medicaid provides government-backed health insurance to low-income families, pregnant people, seniors in nursing homes and those with disabilities. In Louisiana, approximately 1.6 million people, or a third of the state’s population, get health insurance through the program.
Louisiana is heavily reliant on the federal government to fund its Medicaid program, but a congressional budget blueprint would be catastrophic for health care in the state.
Of the $19 billion Landry has proposed spending on Medicaid next year, $14.2 billion would be expected to come from the federal government. … The House GOP is looking to siphon off as much as $880 billion from the health care program to help pay for tax cuts. Republican House Speaker Mike Johnson, who is from north Louisiana, and Trump have said they don’t intend to cut Medicaid services directly, but experts say it would be nearly impossible to meet their spending goals without limiting the program.
Fixing Louisiana’s brain drain
Louisiana’s population has grown by a meager 0.16% since 2009, only outpacing Mississippi, Illinois and West Virginia during that timespan. In some years, such as 2022, the state experienced a net outmigration. To reverse this troubling trend, state leaders must devise policies aimed at making Louisiana a more attractive place for people to live or relocate. The Times-Picayune | Baton Rouge Advocate’s Rich Collins explains how the state must diversify its economy to achieve this goal:
A refrain among some business leaders is that over the years the city and state became too reliant on energy, petrochemicals and tourism. They say Louisiana’s economy needs innovations in these legacy industries — including investments in hydrogen, biofuels, battery materials, wind and solar — while expanding health care, biotech and other sectors. … “Any place that continues to focus on older industries will see declining growth and therefore declining population,” [The Data Center’s Allison] Plyer said. “Other places have made bets on new industries, which hire lots of people.”
The skyrocketing cost of homeowner’s insurance in Louisiana is pricing many people out of their current homes and crushing the dream of homeownership altogether for many others. Collins explains how leaders must address this crisis, including in the state’s biggest economy – New Orleans:
Jesse Keenan, a Tulane University professor who studies real estate and climate change, said housing costs are a major reason people are leaving. “One of the city and state’s biggest draws was affordable housing,” he said, noting that rising insurance premiums, along with increases in property taxes and utility costs, have made New Orleans less competitive and affordable than it once was. “
Louisiana may have lost funding for crisis services
Louisiana was notified on Monday that as many as six federal health grants had been cancelled. The funds, which state officials said were for “crisis services,” were supposed to last until the end of 2025. As the Louisiana Illuminator’s Julie O’Donoghue explains, the terminated funding could be for mental health and substance abuse services, but it’s difficult to ascertain:
The message from the federal government was “difficult to interpret,” [Karen Stubbs Church, assistant secretary over Louisiana’s Office of Behavioral Health] said. For example, two of the six grants the federal government appeared to be seeking to end might have already expired. “There is still a lot of confusion,” Church told legislators. “We’re still working out the impact.”
Stripping FEMA’s role in disaster recovery
Trump administration officials have recently expressed their desire to overhaul the Federal Emergency Management Agency, including shifting most of the financial responsibility of recovering from natural disasters to states. The Washington Post’s Brianna Sacks, Brady Dennis and Jake Spring report:
FEMA’s acting administrator, Cameron Hamilton, spoke for about 45 minutes on Saturday to a gathering of state emergency managers about the difficulty of change and how states needed to be more resilient and responsible in their disaster response efforts, according to one state-level official who attended. Hamilton repeatedly used the phrase that states need to work with private partners as the “performance enhancing drugs of emergency response,” the official said.
The Post’s team explains the uncertain legalities of the move to diminish FEMA’s roles and responsibilities and the negative consequences for states if the effort is successful:
FEMA’s existence and functions are written into laws, so it’s unclear how the administration could halt them without congressional approval, said Moskowitz, formerly Florida’s emergency management director. In addition, he said, FEMA reimburses state and local governments for much of the cost of disaster response and recovery. Without that federal money, governments may need to raid their budgets for education, health care and other areas in order to pay for emergency response — and even then might struggle to cope with mounting disasters, he said.
Louisiana has received more disaster recovery dollars than any other state in recent decades.
Number of the Day
1.1% – Percentage change in manufacturing jobs in Louisiana from 2019 – 2023. (Source: Data: U.S. Bureau of Labor Statistics via Axios)