1. Louisiana at the Crossroads
Responsible Responses to Louisiana’s Financial Crisis

2. FIVE YEAR BASE LINE PROJECTION STATE GENERAL FUND SUMMARY
FIVE YEAR BASE LINE PROJECTION
STATE GENERAL FUND SUMMARY
APPROPRIATED
Prior
Current
Projected
Fiscal Year
REVENUES:
Taxes, Licenses & Fees
$8,998,200,000
$9,452,400,000
$9,943,900,000
$10,380,600,000
$10,799,700,000
Less Dedications
($1,715,700,000)
($1,733,500,000)
($1,745,400,000)
($1,789,700,000)
($1,835,700,000)
Carry Forward Balances
$34,334,172
$13,357,293 $0
Act 51 of 2010 RLS Transfer from Budget Stabilization Fund
$198,396,069
Act 633 of 2010 RLS Transfer Fund Balances
$78,905,388
Act 633 of RLS Transfer from Incentive Fund
$3,950,000
Act 226 Transfer from Incentive Fund
$3,900,000
Act 122 Transfer from Budget Stabilization Fund "Rainy Day Fund"
$86,177,032
Act 226 Transfer from Insure LA Incentive Fund
$75,587,322
Act 226 Transfer from Rapid Response Fund
$13,500,000
Use of FY Surplus
$782,290,000
TOTAL REVENUES
$8,555,589,983
$7,736,207,293
$8,198,500,000
$8,590,900,000
$8,964,000,000
ANNUAL GROWTH RATE
-9.58%
5.98%
4.79%
4.34%
EXPENDITURES:
General Appropriation Bill
$7,616,656,503
$7,106,616,195
$9,024,410,685
$9,451,493,804
$9,713,701,452
Ancillary Appropriation Bill
$754,500
$26,968,957
$55,254,179
$83,994,074
Non-Appropriated Requirements
$433,349,119
$426,991,041
$432,276,362
Judicial Appropriation Bill
$132,362,434
$134,362,434
$134,238,278
$134,239,742
$134,241,207
Legislative Appropriation Bill
$69,312,744
$67,383,123
$67,416,279
$67,420,302
$67,424,057
Special Acts
$33,709,982
Capital Outlay Bill
$794,318,000
$10,000,000
27th Pay Period occurring in FY
$70,946,489
TOTAL EXPENDITURES
$9,045,998,800
$7,736,107,293
$9,799,967,032
$10,184,394,371
$10,475,347,134
-14.48%
26.68%
3.92%
2.86%
Midyear Adjustments after 12/1/2009
($490,408,817)
PROJECTED BALANCE
$100,000
($1,601,467,032)
($1,593,494,371)
($1,511,347,134)
Oil Price Forecast
$71.43
$72.43
$76.50
$77.18
$78.78

3. FIVE YEAR BASE LINE PROJECTION STATE GENERAL FUND SUMMARY
FIVE YEAR BASE LINE PROJECTION
STATE GENERAL FUND SUMMARY
APPROPRIATED
Prior
Current
Projected
Fiscal Year
REVENUES:
Taxes, Licenses & Fees
$8,998,200,000
$9,452,400,000
$9,943,900,000
$10,380,600,000
$10,799,700,000
Less Dedications
($1,715,700,000)
($1,733,500,000)
($1,745,400,000)
($1,789,700,000)
($1,835,700,000)
Carry Forward Balances
$34,334,172
$13,357,293 $0
Act 51 of 2010 RLS Transfer from Budget Stabilization Fund
$198,396,069
Act 633 of 2010 RLS Transfer Fund Balances
$78,905,388
Act 633 of RLS Transfer from Incentive Fund
$3,950,000
Act 226 Transfer from Incentive Fund
$3,900,000
Act 122 Transfer from Budget Stabilization Fund "Rainy Day Fund"
$86,177,032
Act 226 Transfer from Insure LA Incentive Fund
$75,587,322
Act 226 Transfer from Rapid Response Fund
$13,500,000
Use of FY Surplus
$782,290,000
TOTAL REVENUES
$8,555,589,983
$7,736,207,293
$8,198,500,000
$8,590,900,000
$8,964,000,000
ANNUAL GROWTH RATE
-9.58%
5.98%
4.79%
4.34%
EXPENDITURES:
General Appropriation Bill
$7,616,656,503
$7,106,616,195
$9,024,410,685
$9,451,493,804
$9,713,701,452
Ancillary Appropriation Bill
$754,500
$26,968,957
$55,254,179
$83,994,074
Non-Appropriated Requirements
$433,349,119
$426,991,041
$432,276,362
Judicial Appropriation Bill
$132,362,434
$134,362,434
$134,238,278
$134,239,742
$134,241,207
Legislative Appropriation Bill
$69,312,744
$67,383,123
$67,416,279
$67,420,302
$67,424,057
Special Acts
$33,709,982
Capital Outlay Bill
$794,318,000
$10,000,000
27th Pay Period occurring in FY
$70,946,489
TOTAL EXPENDITURES
$9,045,998,800
$7,736,107,293
$9,799,967,032
$10,184,394,371
$10,475,347,134
-14.48%
26.68%
3.92%
2.86%
Midyear Adjustments after 12/1/2009
($490,408,817)
PROJECTED BALANCE
$100,000
($1,601,467,032)
($1,593,494,371)
($1,511,347,134)
Oil Price Forecast
$71.43
$72.43
$76.50
$77.18
$78.78

4. REC Forecast Change December to June
(in millions)
December
April
June
FY2010
$7,863
$7,544
$7,282
FY2011
$8,021
$7,776
$7,719

6. Percent of Total Budget
$1.6 billion ÷ $25.5 billion = 6%
FY12 Projected Shortfall Total FY11 Budget
Percent of total FY11 budget to be cut over 3 years

7. Percent of State General Fund Spending
$1.6 billion ÷ $7.7 billion = 21%
FY12 Projected Shortfall FY11 State General Fund
Percent of FY11 state general fund to be cut in FY12

9. Percent of Discretionary Spending
$1.6 billion ÷ $2.6 billion = 62%
FY12 Projected Shortfall
FY11 Discretionary Funds
Percent of FY11 discretionary fund to be cut in FY12

11. Spending Reverts to Pre-Katrina Levels (in 2009 dollars)

12. Increases Since Pre-Katrina FY05-FY10

13. Fiscal Effect of Stelly Repeals
(in millions)
FY08
FY09
FY10
FY11
FY12
5-Year Total
Excess Itemized Deductions
$152
$250
$255
$260
$265
$1,182
Bracket Changes
N/A
$359
$251
$262
$872
Total Cost
$614
$511
$527
$2,054
Source:
Department of Revenue for Excess Itemized Deductions, except FY12, which is LBP estimate
Legislative Fiscal Office for Bracket Changes

14. FMAP Rate Change

15. 5-Year Tax Exemption Budget
$7.1 BILLION

16. FY 2011 Budget Projections State general fund revenues: $7.7 billion
Cost of tax exemptions: $7.1 billion
Tax code spending equals 92% of SGF revenues

17. What Louisiana’s Tax Policies Cost
Insurance Premium Tax Credit Motion Picture Investor Credit Income shifting by multistate corporations Paying companies to send their sales taxes on time Enterprise zone credit Horizontal drilling exemption
$195 million
$119 million
$32 million
$34 million
$23 million
$15 million

18. Tax Exemption Budget Needs More Transparency
Example:
Of 179 sales tax exemptions, 90 are lumped under “Other Exemptions” at a cost of $3.8 billion of $4.7 billion or 80%

19. State & Local Taxes in 2007

20. Governors that Supported Tax Increases by Party
Republican
55%
Democrat
75%

21. The budget is “devastating”
Suspending tax exemptions is “something we should debate”
Senate President Joel Chaisson
Baton Rouge Business Report
September 24, 2010

22. Better Choices for a Better Louisiana
We need a balanced, transparent approach to solving Louisiana’s fiscal crisis.
Fiscal crisis is due in part to the global recession but is also of our own making.
Spending is not the problem.
We need RESPONSIBLE revenue measures, spending measures, and COMMON SENSE savings.
Revenue measures must be thoughtful, adequate, sustainable, and fair.