Louisiana state budget

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Louisiana state budget

Flag of Louisiana.png
Budget calendar:  Annual
Fiscal year:  2014
State Credit Rating:  AA (as of May 2012)
Current Governor:  Bobby Jindal
Financial figures
GF expenses[1]:  $8.156 billion (estimated for FY 2013)
All funds expenses:  $29.662 (estimated for FY 2013)
Spending % Change:  Green Arrow Up Darker.svg9.56%[2]
% from Federal Funding:  43.95%
State Debt:  $83,280,815,000
Per Capita State Debt:  $18,097
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Policypedia Budget Policy-logo-no background.png
This page contains information about budget processes and policy issues in Louisiana, including:
  • A summary of the budget drafting process
  • Trends in expenditures and revenues
  • Current and past fiscal year budget developments
  • Financial transparency measures

Between fiscal year 2009 and fiscal year 2013, Louisiana's total expenditures increased by approximately $4.01 billion, from $25.654 billion in 2009 to $29.662 billion in 2013. This represents a 15.62 percent increase, outpacing the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).[3][4]

Budget process

The state operates on an annual budget cycle. The sequence of key events in the budget process is as follows:[5][6]

  1. Budget instruction guidelines are sent to state agencies in September.
  2. State agencies submit their budget requests in November.
  3. Agency hearings are held in January and February.
  4. The governor submits his or her proposed budget to the state legislature 45 days prior to the regular session of the legislature (for a newly elected governor, this deadline is extended to 30 days prior to the regular session of the legislature).
  5. The legislature typically adopts a budget in June. A simple majority is required to pass a budget. The fiscal year begins July 1.

In Louisiana, the governor may exercise line item veto and item veto of appropriations authority.[6]

The governor is legally required to submit a balanced budget proposal. Likewise, the legislature is legally required to adopt a balanced budget.[6]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[7]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."
  • Federal funds: "Funds received directly from the federal government."
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[7] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[7]
State General fund Federal funds Other funds Bonds Total Per capita expenditures
Louisiana $8,156 $12,311 $8,791 $404 $29,662 $6,412.75
Alabama $6,897 $9,541 $7,490 $189 $24,117 $4,989.32
Arkansas $4,746 $6,189 $10,447 $203 $21,585 $7,293.77
Mississippi $4,699 $8,274 $5,660 $784 $19,417 $6,491.36
Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[8]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in Louisiana can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[7]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other
Louisiana 18.4% 9.9% 0.6% 26.7% 2.9% 7.1% 34.4%
Alabama 20.9% 20.1% 0.2% 23.3% 2.5% 6.1% 27.0%
Arkansas 16.3% 16.2% 2.1% 21.4% 2.2% 5.8% 36.0%
Mississippi 16.9% 16.8% 5.8% 23.4% 1.8% 7.5% 27.7%
Source: National Association of State Budget Officers

Expenditure trends

From 2008 to 2012, Medicaid spending rose by more than seven percentage points, or 38.3 percent, as a share of the budget. During the same period, transportation expenditures rose by nearly two percentage points, or 36.5 percent, as a share of the state budget. The table below details changes in expenditures from 2008 to 2012.[7][9][10][11][12] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other
2012 18.4% 9.9% 0.6% 26.7% 2.9% 7.1% 34.4%
2011 16.6% 7.5% 0.6% 22.1% 2.7% 6.9% 43.7%
2010 18.1% 8.0% 0.6% 23.7% 2.9% 10.9% 35.7%
2009 18.9% 10.6% 0.5% 24.0% 3.3% 6.7% 35.9%
2008 15.2% 9.6% 0.5% 19.3% 2.7% 5.2% 47.5%
Change in % 3.20% 0.30% 0.10% 7.40% 0.20% 1.90% -13.10%
Source: National Association of State Budget Officers

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[7]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
Louisiana $2,853 $2,685 $340 $386 $1,839 $8,103 $1,751.82
Alabama $1,945 $3,104 $376 $2 $1,887 $7,314 $1,513.12
Arkansas $2,125 $3,144 $431 $39 $475 $6,214 $2,099.77
Mississippi $1,887 $1,480 $463 $145 $763 $4,738 $1,583.98
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[8]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[7][9] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, Louisiana ($ in millions)[7][9]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $2,853 $2,685 $340 $386 $1,839 $8,103 $1,751.82
2012 $2,840 $2,486 $374 $387 $1,978 $8,066 $1,752.67
2011 $2,838 $2,405 $262 $388 $1,876 $7,770 $1,698.29
2010 $2,548 $2,212 $175 $386 $1,852 $7,174 $1,578.30
2009 $3,023 $2,966 $825 $419 $2,153 $9,386 $2,089.46
Change in % -5.62% -9.47% -58.79% -7.88% -14.58% -13.67% -16.16%
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[8][13]
Source: National Association of State Budget Officers

State budgets by year

DocumentIcon.jpg See budget bill: HB 1

Fiscal year 2014

Louisiana state budget -- 2014
Louisiana State Legislature
Text:HB 1
Legislative History
Introduced:April 8, 2013
State House:May 10, 2013
Vote (lower house):92-6
State Senate:June 1, 2013
Vote (upper house):37-1
Conference:June 6, 2013
Conference Vote (upper house):38-1
Conference Vote (lower house):104-0
Governor:Bobby Jindal
Signed:June 21, 2013

On June 21, 2013, Governor Bobby Jindal signed the fiscal year 2014 budget into law. Jindal executed several line item vetoes. He removed $4 million budgeted for home-based services for the developmentally disabled and made additional cuts to children's clinics and family violence programs. Jindal argued the vetoes were necessary because the state legislature did not provide sufficient funds for the state's health department, which administers the aforementioned programs. In the message accompanying his vetoes, Jindal wrote, "In light of the legislative reduction to Medicaid utilization, this program expansion cannot be funded."[14][15]

Jindal's original budget proposal included significant one-time revenues (such as legal settlements and property sales) to fund regular year-to-year expenses. The adopted budget reduced one-time revenues, instituted a tax amnesty program, and provided for pay raises for elementary and secondary education teachers. As part of the budget compromise, Jindal signed a series of bills that will make it more difficult to use one-time revenues for year-to-year expenses in future budgets.[14][15]

Fiscal year 2013

See also: Louisiana state budget (2012-2013)

Fiscal year 2012

See also: Louisiana state budget (2011-2012)

Fiscal year 2011

See also: Louisiana state budget (2010-2011)

Fiscal year 2010

See also: Louisiana state budget (2009-2010)

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[7][10]

Historical state budget spending in Louisiana ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $8,344 30.8% $7,793 28.8% $10,616 39.2% $320 1.2% $27,073
2010-2011 $7,786 25% $11,854 38% $10,969 35.2% $591 1.9% $31,200
2009-2010 $9,061 28.6% $10,368 32.7% $11,859 37.4% $641 2% $31,684
Averages: $8,397 28% $10,005 33% $11,148 37% $517.333 2% $29,985.67
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Louisiana had a state debt of over $83 billion. Its state debt per capita was $18,097. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[16][17]

Total state debt in Louisiana[18]
Type Totals U.S. rank
Total state debt $83,280,815,000 21
Per capita debt $18,097 15
State and other fund expenditures $16,137,000,000 14

Public pensions

See also: Louisiana public pensions and Louisiana public employee salaries

A 2012 report from the Pew Center on the States noted that Louisiana's pension system was funded at 56 percent at the close of fiscal year 2010, well below the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[19]

The funding ratio for the four state-sponsored pension systems decreased from 70.38 percent in fiscal year 2007 to 55.86 percent in fiscal year 2012, a decrease of 14.52 percentage points, or 20.6 percent. Likewise, unfunded liabilities increased from over $10.5 billion in fiscal year 2007 to nearly $20 billion in fiscal year 2012.[20][21][22][23][24][25][26][27][28][29][30][31][32][33]

Credit ratings

States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit rating indicates lower risk for an investor, which in turn lowers costs for taxpayers.[34]

The table below lists the Standard and Poor's credit rating for Louisiana from 2001 to 2012 (grades from surrounding states are provided for additional context).[34]

S&P credit ratings from 2001 to 2012
Louisiana Alabama Arkansas Mississippi
2012 AA AA AA AA
2011 AA AA AA AA
2010 AA- AA AA AA
2009 AA- AA AA AA
2008 A+ AA AA AA
2007 A AA AA AA
2006 A AA AA AA
2005 A AA AA AA
2004 A+ AA AA AA
2003 A+ AA AA AA
2002 A AA AA AA
2001 A AA AA AA

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[35]

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[35]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid National rank
Louisiana 43.95% $11,136,334,000 2
Alabama 36.50% $8,112,509,000 11
Arkansas 34.47% $5,900,988,000 21
Mississippi 45.35% $7,725,294,000 1

Stimulus

Louisiana received $2.9 billion in federal funding between February 2009 and June 2013.[36]

Louisiana received approximately $540 million from the federal government in the summer of 2010 under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that President Barack Obama signed into law on August 10, 2010.[37]

Budget transparency

Transparency evaluation
LaTrac
Searchability Y
600px-Yes check.png
Grants N
600px-Red x.png
Contracts Y
600px-Yes check.png
Line item expenditures Y
600px-Yes check.png
Dept./agency budgets Y
600px-Yes check.png
Public employee salaries N
600px-Red x.png
Last evaluated in 2013.
See also: Evaluation of Louisiana state website and Constitutional provisions regarding reading of bills

[[Article 3, Section 15(d) of the state constitution] stipulates that each bill must be read by title on three separate days in each house of the state legislature and that there can be no final passage without public hearing and committee report.

On November 12, 2008, Louisiana announced the launch of its spending transparency database, Louisiana Accountability and Transparency (LaTrac).[38]

The database was created as a result of an executive order by Governor Bobby Jindal and the authorization of the legislature. 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.”[38]

The database includes all executive branch spending for the state of Louisiana, including higher education spending. It also features a vendor search option and a link to the performance reports of state agencies through the Louisiana Performance Accountability System (LaPAS).[39] LaTrack also links to LA eGrants, which lists all grants that are available through the state.

The table to the right is helpful in evaluating the level of transparency provided by LaTrac.

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Louisiana, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[40][41]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Louisiana tied for 20th in the nation with 12 other states, earning five out of eight possible points.[41]

Louisiana - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures
{{{1}}}
"Generally Accepted Accounting Principles" budget N
600px-Red x.png
Multi-year forecasting N
600px-Red x.png
Annual cycle Y
600px-Yes check.png
Binding revenue forecast
{{{1}}}
Legislative revenue forecast
{{{1}}}
Non-partisan staff Y
600px-Yes check.png
Constitution or statutory tax/spend limitations N
600px-Red x.png
TOTAL 5

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[41]

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[42] According to the report, Louisiana received a grade of B+ and a numerical score of 88, indicating that Louisiana was an "advancing" state in terms of transparency regarding state spending.[42]

Accounting principles

See also: 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.[43] Louisiana's audit reports are published online.[44]

Contact information

Louisiana Division of Administration
1201 N. Third Street, Suite 7-150
Baton Rouge, Louisiana 70804
Telephone: 225-342-7005

See also

External links

Additional reading

References

  1. Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
  2. This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
  3. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  4. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  5. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting," updated April 2011
  6. 6.0 6.1 6.2 National Association of State Budget Officers "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  7. 7.0 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  8. 8.0 8.1 8.2 United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  9. 9.0 9.1 9.2 National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  11. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  12. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  13. United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  14. 14.0 14.1 Louisiana Office of the Governor, "Governor Jindal Signs HB 1 with Line-Item Vetoes, Announces Additional Reductions Based on Preamble of the Budget Bill," June 21, 2013
  15. 15.0 15.1 The Advocate, "Jindal signs budget bill, vetoes money for disabled and the arts," June 22, 2013
  16. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  17. Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  18. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  19. Pew Center on the States, "Widening Gap Update: Louisiana," June 18, 2012
  20. Louisiana State Employees' Retirement System, "2011-2012 Comprehensive Annual Financial Report," accessed November 12, 2013
  21. Teachers' Retirement System of Louisiana, "Comprehensive Annual Financial Report 2012," accessed November 12, 2013
  22. State of Louisiana School Employees' Retirement System, "Annual Financial Report June 30, 2012 and 2011," accessed November 12, 2013
  23. Louisiana State Police Pension and Retirement System, "Annual Report, June 30, 2012," accessed November 12, 2013
  24. Firefighters' Retirement System, "2012 Consolidated Financial Report," accessed November 12, 2013
  25. Municipal Employees' Retirement System of Louisiana, "Audit Report, June 30, 2012 and 2011," accessed November 12, 2013
  26. Parochial Employees' Retirement System of Louisiana, "Annual Financial Report, December 31, 2012 and 2011," accessed November 12, 2013
  27. Sheriffs Pension and Relief Fund, "Actuarial Valuation as of June 30, 2012," accessed November 12, 2013
  28. District Attorneys' Retirement System, "Actuarial Valuation as of June 30, 2012," accessed November 12, 2013
  29. Louisiana Assessors' Retirement Fund, "Actuarial Valuation as of September 30, 2012," accessed November 12, 2013
  30. Clerks' of Court Retirement and Relief Fund, "Actuarial Valuation as of June 30, 2012," accessed November 12, 2013
  31. Harbor Police Retirement System, "Actuarial Valuation as of June 30, 2010," accessed November 12, 2013
  32. Registrar of Voters' Employees' Retirement System, "2012 Audit Report," accessed November 12, 2013
  33. Municipal Police Employees' Retirement System and Subsidiaries, "2012 Audit Report," accessed November 12, 2013
  34. 34.0 34.1 Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  35. 35.0 35.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  36. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  37. Federal Fund Information for States, “ARRA FMAP Extension and Education Jobs Fund Totals,” August 11, 2010
  38. 38.0 38.1 Louisiana Division of Administration, "State government launches online spending database," November 12, 2008
  39. State of Louisiana Division of Administration, "LaPAS," accessed August 19, 2013
  40. Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
  41. 41.0 41.1 41.2 Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
  42. 42.0 42.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  43. [http://www.legis.state.la.us/boards/board_members.asp?board=621 Louisiana Legislative Auditor, "Audit Advisory Council," accessed August 19, 2013]
  44. Louisiana Legislative Auditor, "Audit Report Library," accessed August 19, 2013