Louisiana state budget

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Louisiana's $26 billion FY2011 state budget for the fiscal year starting July 1, 2010, was passed by the Louisiana legislature on the last day of the legislative session after much wrangling in the face of a $580 million deficit.^[1][2] The House approved a budget bill largely written by the Senate and with far fewer cuts than the House wanted. It was passed in part due to pressure from Bobby Jindal.^[3]

Louisiana will receive approximately $540 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.^[4]

See also: The Louisiana State Budget on State Budget Solutions

[edit] Fiscal Year 2012 State Budget

State Sen. President Joel Chaisson said that some experts have predicted that the state will face a $2 billion budget shortfall in FY2012.^[5] He also said that the administration has asked all state agencies to submit their budget proposals with 35% spending cuts for FY2012.^[5]

[edit] Fiscal Year 2011 State Budget

After much wrangling in the Louisiana legislature and a letter to House members from Gov. Bobby Jindal urging them to adopt the Senate's budget, the House voted 66-34 to approve House Bill 1, the budget bill, on June 20, 2010, and sent it to the governor.^[6]

The FY2011 budget eliminates nearly 3,000 state jobs, including 1,300 filled positions and also reduced spending in nearly every state department and agency.^[7] Overall spending decreased by almost $5 billion, a reduction of nearly 17%, under the FY2011 budget.^[5]

The state expects to receive around $500 million from Congress, with $375 million for Medicaid.^[5][8] Medicaid provides services to approximately 1.1 million in the state.^[5] Louisiana will receive almost $147 million in federal funds to retain 2,800 education jobs, mostly kindergarten through 12th grade teachers, according to federal Department of Education estimates.^[8]

The legislature amended an ancillary budget bill passed at the last minute to provide $30 million for "member amendments" that finance pet projects in members' districts, with the money coming from a state fund set aside to pay expenses associated with hurricanes and other emergencies.^[7] Rural legislators were persuaded to vote for the budget with the addition of the member amendments and restoration of cuts to the Louisiana State University Agricultural Center.^[7]

Gov. Jindal told a joint session of the state's House and Senate at the start of the session that Louisiana's fiscal challenges also provided a chance to change the way the state does business. He proposed a mix of one-time funding and cuts to balance the FY2011 budget.^[9] At the start of the session, the House and Senate disagreed regarding how much should be trimmed from the budget and to what extent they should tap state trust funds to fill gaps in the 2010-11 fiscal year that begins July 1.^[9] The governor proposed using an anticipated extension of part of the stimulus law that would generate about $321 million for the state Medicaid program to plug the shortfall.^[10] He said his plan avoids state employee layoffs and furloughs.^[11]

The House presented the budget in House Bill 1 by Rep. Jim Fannin, D-Jonesboro, but the Senate Finance Committee made many changes to the House budget, including restoring 67 million that the House had tried to cut from the state charity hospitals, $50 million for public colleges and a $65 million reduction that would have been made at the discretion of the governor's office.^[12]

To address the $580 million budget shortfall from FY2010, the Senate relied on one-time sources of funds that have been the focus of disagreements with the House, including $242 million from a tax-amnesty program, $198 million from the state's rainy-day fund and $87 million from an emergency response fund.^[12] House leaders say that such reliance on one-time sources in the Senate-crafted budget creates a worsening situation for the coming fiscal year. FY2012 has been called a "cliff year" because the loss of a billion dollars in federal stimulus and Medicaid money and other one-time state revenue will leave a very large hole in the state budget. The $2 billion in one-time funds relied on by the state for FY2011 came from the state's "rainy day" fund, tax amnesty proceeds, a state emergency response fund and other pots of one-time cash.^[13]

The Senate budget was more similar to Jindal's proposed budget than the version of the budget that initially passed in the House.^[12] The Senate's version of the budget cut $70 million more than Jindal proposed from the FY2011 operating budget, including $25 million each for private Medicaid providers^[12], because state revenue projections worsened after the governor released his budget. The House wanted to cut $400 million more instead.^[13] Hospitals and higher education will face the brunt of the steep drop-off in funding.^[13] Gov. Jindal and Senate President Joel Chaisson proposed a series of measures to make it easier to tap into the state's protected funds and thus reducing the severity of cuts that will be needed in FY2011. The House rejected all such proposals, but Jindal said he'll return with similar ideas next year.^[13]

Another issue that looms over the "cliff year" is that the state and economists do not yet know what the financial impact the massive oil spill in the Gulf of Mexico will have on the state.^[13]

[edit] Fiscal Year 2010 State Budget

Approaching the end of the fiscal year, the state faced a $319 million deficit in its FY2010 budget due to declining tax collections.^[14] Gov. Jindal proposed cutting $65 million from state agencies and public colleges and tapping into a mix of one-time dollars and savings to plug the remaining gap.^[15][10] Under Gov. Jindal's plan, the state's rainy day fun, officially known as the Budget Stabilization Fund, would be untouched.^[16] The rest of the budget fix will come from a variety state funds and one-time sources, such as $17 million the state will get from a legal settlement with Eli Lilly & Co. and $13 million in lower-than-expected debt service from bond sales.^[16] Gov. Jindal said that, with 11 weeks left in the fiscal year, there was little time to make major spending cuts without crippling state services.^[16]

The State Senate voted unanimously in favor of Senate Concurrent Resolution 42, thus authorizing use $198 million from the state's rainy-day fund to help patch a mid-year budget deficit.^[17] Senate President Joel Chaisson II authored the resolution, which puts him at odds with Gov Jindal's budget approach.^[18] The Resolution allows removing $172 million from the rainy-day fund.^[18]

The Senate sought to use the rainy-day account to mitigate the state's budget problems last year and the House agreed to taking $86 million from the fund, leaving $198 million in the fund that may be used before July 1, 2010. A Constitutional provision permitting use of one-third of the rainy day fund in years when state revenues fall below the revenues of the previous year.^[17]

[edit] Prior State Budgets

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.^[19]

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.^[20]

[edit] 2008-2009 budget crisis

See also: Louisiana state budget (2008-2009)

[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.^[21]

Pursuant to law (Louisiana Revised Statute 39:56), the Division of Administration, Office of Planning and Budget prepares the official state budget.^[22]

[edit] Budget figures

2-Year State Budget Comparison^[23]

'	FY 2009 Budgeted	FY 2010 Appropriated	Percent Change
General Fund	$9,474.7	$9,011.2	-4.89%
State Total	$14,667.1	$14,188.8	-3.26%
Federal	$14,944.0	$14,798.0	-0.98%
Grand Total	$29,611.1	$28,986.8	-2.11%

[edit] Accounting Principles

Main article: Louisiana government 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.^[24]

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.^[25] 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.^[26]

[edit] Transparency

On November 12th, 2008, Louisiana announced the launch of its spending transparency database, LA Trac.^[27] 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.”^[28]

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] Government Tools

See also: Evaluation of Louisiana state website

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] 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.^[29]

[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] Economic Stimulus Transparency

• Louisiana will receive approximately $540 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.^[30]

• Louisiana will receive an estimated $2,297,586,422 ^[31]

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

One Louisiana project was noted in Senator Coburn and Senator McCain's "Summertime Blues, 100 stimulus projects that give taxpayers the blues" report. The project gave a contractor convicted of public corruption $211,468 in stimulus funds to build a sidewalk in Monroe, LA, despite the fact that he was not the lowest bidder.^[32]

[edit] Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.^[33][34]

In addition to the eight non-existent Districts the ARRP website sent money to in Louisiana, the state’s 8th Congressional District reportedly grew by more than 300 job through the stimulus package. However, the 8th District does has not existed since 1990.^[35]

[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:^[36]

Salary	Number of employees
$0 - 49,999	72,834 employees
$50,000 - 99,999	27,834 employees
$100,000 - 199,999	3,021 employees
$200,000 - 299,999	139 employees
$300,000 - 399,999	19 employees
$400,000 - 550,000	4 employees

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.^[37]

[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.^[38]

[edit] Highest salaries

Four out of the top five highest paid employees work at LSU. These include:^[39]

• 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
• Louisiana Legislature
• Louisiana Senate
• Louisiana House of Representatives

[edit] External links

[edit] Additional reading

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

[edit] References

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