Senate budget committee digs up more money for Road Home

Published 11:25 pm Sunday, June 24, 2007

BATON ROUGE (AP) — A key Senate budget committee agreed Sunday on plans to spend $1.9 billion in state surplus money, digging up more dollars for the post-hurricane Road Home program and deciding to pour state cash into construction of a new charity hospital in New Orleans.

The spending plans — negotiated with Gov. Kathleen Blanco’s administration — would generate $1 billion to help plug a shortfall in the Road Home and would sidestep a dispute with federal officials over the governor’s push to rebuild the Louisiana State University-run hospital flooded by Hurricane Katrina.

Rather than negotiate with the U.S. Department of Housing and Urban Development about using federal recovery aid to help pay for the hospital, the Blanco administration and the Senate Finance Committee agreed to state spending on the teaching and research facility. HUD has questioned the size of the hospital, and the plans have gotten mired in a partisan disagreement over how best to care for the uninsured in Louisiana.

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‘‘We’re moving to take on the responsibility of rebuilding the hospital in New Orleans,’’ said Commissioner of Administration Jerry Luke LeBlanc, Blanco’s chief budget architect.

The Senate Finance Committee quickly agreed to the spending plans, which also include $600 million for road repairs and construction, $200 million for coastal restoration and hurricane protection projects and millions of dollars for hurricane recovery items.

With only days remaining in the legislative session, the surplus spending bill heads next to the full Senate for debate, then must go back to the House for approval of the adjustments. The session must end by Thursday.

To make the spending plans match the dollars on hand, the committee shuffled money in the bill around, cutting in half the money slated for college building repairs and shrinking the cash earmarked for expansion of health care clinics around the state.

That freed up more money for the new hospital in New Orleans, for the building of a new psychiatric hospital in Rapides Parish and for other projects sought by senators.

Most of the biggest changes involved hurricane recovery.

The committee raised spending on the Road Home buyout and repair grant program for people with damage from hurricanes Katrina and Rita from a proposed $714 million to $1 billion.

The Road Home, funded with $6.2 billion in federal recovery money, faces a shortfall of up to $5 billion to aid all eligible homeowners. Blanco is seeking help from Washington but has been told by members of Congress that the state needs to show a $1 billion spending commitment of its own to help fill in the shortfall.

To help boost the state’s commitment to $1 billion, the committee agreed to reshuffle the $300 million pool in federal recovery aid that state officials were asking HUD to approve for the New Orleans charity hospital to the Road Home. HUD would have to approve the use of the dollars for the Road Home.

The state would then use $74.5 million in its own money, combined with a line of credit through the state’s construction budget bill, to help finance construction of the $1.2 billion hospital on its own.

HUD Secretary Alphonso Jackson questioned the size and price tag of the hospital and asked for further details before he would decide whether the state can use all $300 million in federal aid it was seeking for the hospital.

U.S. Sen. David Vitter, R-Metairie, has asked HUD to reject the state’s request to use the full $300 million in recovery money on the hospital until the state has further discussions about ways to restructure health care for the uninsured.

Jackson said he will use the standards HUD uses when hospitals apply for federally backed mortgage insurance — even though that’s not the approval LSU and Blanco were seeking for the hospital. The HUD secretary said that standard was in the best interest of taxpayers.

But that entire process would be bypassed if lawmakers agree to the surplus spending bill and to tap into state money and state borrowing for the New Orleans hospital.

‘‘It’s cheaper to go on your own than to jump through all those hoops and red tape,’’ said Sen. Joe McPherson, D-Woodworth, vice chairman of the Senate Finance Committee and a supporter of the charity hospital plans.

Other spending included in the surplus budget bill include $15 million to buy land and start construction of a new charity hospital in Baton Rouge, to replace the aging Earl K. Long Medical Center.

The spending bill would tap into several pools of cash available to lawmakers, including a surplus from last year, unspent cash from this year, money paid to FEMA that will be reimbursed because of federal hurricane recovery legislation and dollars earmarked to woo a German steelmaker that instead chose to build its new mill in Alabama.