Louisiana state budget

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Louisiana has a $28.986 billion total budget for FY 2010
of which $9.011 billion (a decrease of 4.89% from FY 2009) makes up the General Fund. $5.987 billion of the total budget is hurricane disaster recovery funding. Total budget figures for FY 2008 were $28.597 billion and $29.611 billion for FY 2009. The FY 2009 General Fund budget was $9.474 billion.^[1]

The May 21, 2009 Revenue Estimating Conference (REC) made minor adjustments to the February REC adopted forecast. The estimate of available general fund revenue in FY 2009/10 was revised down by $30 million to $8,059.9, which is down 13.6% from the prior year forecast. A continuation of the state's tax breaks in conjunction with negative state employment growth account for the declining revenue. The estimated General Fund (Direct) balance on June 30, 2010 (last day of the fiscal year) is $2,146,705.^[2]

Gov. Bobby Jindal and the Louisana State Legislature created in July 2009 the Commission on Streamlining Government to offer cost-cutting ideas amid years of projected state budget shortfalls. Jindal asked for $802 million in budget cut recommendations. The panel must pull together its report by Dec. 15. The new law requires the commission to submit an annual report before Jan. 1 each year. The commission is scheduled to go out of business when the next governor and Legislature take office Jan. 12, 2012, but lawmakers can extend it if they choose.^[3]

[edit] Budget Background

The Louisiana state budget is prepared every year by October 1st and includes a detailed financial plan for the fiscal year. Prior to the adoption of the budget a series of public hearings are held in both the House of Appropriations Committee and the Senate Finance Committee. A majority vote is required to pass the state budget.The Louisiana fiscal year begins in July.^[4]

Pursuant to law (Louisiana Revised Statute 39:56), the Division of Administration, Office of Planning and Budget prepares the official state budget.^[5]

2-Year State Budget Comparison^[6]

Gov. Jindal said when first presenting the budget in March of 2009, "There are two major pillars that provide the framework for how to view this budget. First – There are the immediate challenges facing our state, which must be addressed in this FY 10 budget in order for us to present the legislature with a balanced budget today. The second pillar is the long term reforms we must make in order to downsize state government so we can live within our means and meet the much more severe budget challenges that await us just down the road."^[7]

"It is very important to understand, especially while looking at our proposed FY 10 budget, that federal stimulus funds are temporary funds. As such, they cannot be thought of as a permanent part of our state’s budget. Indeed, it is accurate to think of these temporary federal stimulus funds as a bridge connecting the two pillars I just laid out. These temporary federal funds give us time to transition from where we are today – meeting our immediate budget challenges - to a more sustainable size of government that is prepared to meet our more severe budget challenges in FY12. Federal stimulus funds give us time to reform how the state runs so we can cut spending, ensure we are spending efficiently, and live within our means."^[8]

See Louisiana state budget (2008-2009) for more information.

[edit] Accounting Principles

The state auditing authority is the Office of the Legislative Auditor, created in 1973. The legislature also created a legislative oversight committee for the auditor. The Legislative Audit Advisory Council serves as an audit resolution council and provides general oversight for operations of the legislative auditor. Steve J. Theriot has been Legislative Auditor since 2004. Louisiana's audit reports are published online.^[9]

The Institute for Truth in Accounting (IFTA) rates Louisana “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Louisiana's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.^[10] Louisiana's CAFRs are published online by the Louisiana Division of Administration. Angele Davis has been Commissioner of the Louisiana Division of Administration since December of 2007.^[11]

Gov. Jindal Press Release October 9, 2009 on Credit Rating Upgrades
"A day after Fitch Ratings upgraded Louisiana’s bond rating, Standard & Poor's Ratings Services (S&P) today assigned a “AA-“ rating and stable outlook to the state's general obligation (G.O.) bonds, and upgraded the long-term rating on Louisiana’s outstanding G.O. debt from “A+” to “AA-.” At the same time, S&P raised its rating to “A+” from “A” on the state's appropriation-backed debt. Also today, Moody’s Investors Services raised the outlook on Louisiana’s credit from “stable” to “positive.” Governor Bobby Jindal said, 'Today's news is yet another sign that our efforts to improve Louisiana's economy are working and the business world is taking note. We're going to aggressively continue pushing for policies that are fiscally responsible, and good for taxpayers and businesses. This upgrade will provide us with more momentum as we work to ensure that all of our sons and daughters can pursue their dreams right here in Louisiana.'" ^[12]

[edit] Economic Stimulus Package

Although Louisiana was initially expected to receive approximately $4 billion from the $787 billion dollar economic stimulus. Currently Louisiana is estimated to receive a total of $538,575,876 for infrastructure spending which White House officials estimate will create 50,000 jobs.^[14]

Jindal became the first Governor in the US to reject certain programs of the stimulus bill. He was quoted in the Washington Post saying:

"Increasing taxes on our Louisiana businesses is certainly not a way to stimulate our economy. It would be the exact wrong thing we could do to encourage further growth and job creation," said Mr. Jindal, although the Louisiana legislature could override his decision."^[15]

According to preliminary reports Louisiana is expected to receive:^[16][17]

• $1.7 billion for the state's Medicaid program
• $587 million in education dollars to help prevent layoffs and cutbacks
• $130 million in flexible dollars to help stave off budget cuts
• $455 million for road and bridge work
• $269 million for high-need schools
• $197 million for special education
• $77 million for transit projects
• $72 million for clean and drinking water projects
• $53 million for state and local law enforcement to hire officers and purchase equipment
• $27 million for homelessness prevention
• $16 million for the Head Start program

[edit] Budget Transparency

On November 12th, 2008, Louisiana announced the launch of its spending transparency database, LA Trac.^[18] The database is now up and searchable.

The new government spending database is LaTrac (Louisiana Accountability and Transparency). The database resulted from an executive order by Governor Jindal and the authorization of the legislature. As the Commissioner of Administration, Angele Davis, said, “This is an important event, an extraordinary step forward, and a historic reform initiative for Louisiana and its pursuit of better, more accountable government…Today we begin to empower four million citizen auditors to monitor what the state spends and to judge whether it’s wise, necessary, and achieving results.”^[19]

LaTrac contains all executive branch spending for the state of Louisiana, including higher education. It also has a vendor search and a link to the performance of state agencies (through LaPAS). LaTrac also contains LA eGrants which lists all grants that are available through the state.

Also, the new Taxpayers Union of Louisiana Taxpayers of Louisiana website was formed in the spring of 2008 aided by a "Standing Together" grant from the National Taxpayers Union. Founder, John Roberts, stated his belief that transparency in Louisiana's budget was a boon to the taxpayer and would help curtail much of the unnecessary spending so many in Louisiana have become accustomed to.

[edit] Legislation

• Louisiana Senate Bill 37 (2008) was passed in February 2008. The legislation will mandate the Commissioner of Administration to post a monthly report of the appropriations and spending for each budget unit of state government.
• Louisiana Executive Order BJ 2008-2^[20]

[edit] Government Tools

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases

State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary
LaTrac

[edit] Economic Stimulus Transparency

• The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[21]

• Louisiana will receive an estimated $2,297,586,422 ^[22]

• The economic recovery website to show how legislators and government officials in Louisiana are spending Federal funds is available here.

[edit] Limitations and Suggestions

Some of the information in LaTrac lacks the specificity some users would like, but every appropriation is listed payable to the entity by name, i.e. Avoyelles Parish School Board. That said, Louisiana is in the process of updating its current software systems, and improvements to LA Trac will continue to be made pending those software upgrades.^[23]

[edit] LaPAS

The Louisiana Performance Accountability System (LaPAS) is electronic database that tracks performance standards, interim quarterly performance targets, and actual performance information for Louisiana's Executive Branch departments and agencies.

Departments and agencies are required to submit quarterly Performance Progress Reports to LaPAS via a web-based application. The Office of Planning and Budget (OPB) in the Division of Administration, as the official record keeper of performance standards and information, maintains LaPAS.

[edit] Support for creation of the database

Louisiana's Governor Bobby Jindal and the state legislature supported the creation of the database.

The Pelican Institute applauded Bobby Jindal for LA Trac, but the group says there's more to be done. Their suggestions include requiring "every municipality, parish and school board to put its budget online. Those who pay the local government bills should also be able to see how their tax dollars are being spent. And the costs involved in creating these websites are surprisingly modest."

[edit] Public employee salary information

Main article: Louisiana state employee salaries

[edit] Online salary database

The Times-Picayune provides an online database of state employee salaries using data from the Louisiana Office of Civil Service. Users can search by name, job title, employer or salary range. The breakdown of salary range is as follows:^[24]

The average pay of a classified state worker is $39,619, while an unclassified worker, (which are generally political appointees), averages $59,246. Gov. Jindal's salary, set by the legislature, is $130,000. Putting this in perspective, the median household income in Louisiana is $39,418.^[25]

[edit] Salary increases

In the last year, state employees making less than $40,000 a year actually decreased, while those making over $40,000 rose by 4,334. Additionally, employees making over $100,000 were responsible for growing the payroll by $96 million in a year.^[26]

[edit] Highest salaries

Four out of the top five highest paid employees work at LSU. These include:^[27]

• John Lombardi, President, LSU System Board of Supervisors - $550,000
• J. Stanley "Skip" Bertman, Athletic Director, LSU - $425,000
• Gary Crowton, Assistant Head Coach, LSU - $400,000
• Michael Martin, Chancellor, LSU, $400,000
• Sally Clausen, Commissioner, Board of Regents - $377,000

[edit] See Also

Louisiana taxpayer-funded lobbying

[edit] External links

[edit] Additional reading

• Nola.com, Louisiana's growing state payroll strains budget, Feb. 14, 2009

[edit] References

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