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

2. FIVE YEAR BASE LINE PROJECTION STATE GENERAL FUND SUMMARY APPROPRIATED PriorCurrentProjected Fiscal Year REVENUES: 2009-20102010-20112011-20122012-20132013-2014 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$0 Act 633 of 2010 RLS Transfer Fund Balances$78,905,388$0 Act 633 of 2010 RLS Transfer from Incentive Fund$0$3,950,000$0 Act 226 Transfer from Incentive Fund$3,900,000 $0 Act 122 Transfer from Budget Stabilization Fund "Rainy Day Fund"$86,177,032$0 Act 226 Transfer from Insure LA Incentive Fund$75,587,322$0 Act 226 Transfer from Rapid Response Fund$13,500,000$0 Use of FY 07-08 Surplus$782,290,000$0 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$0$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$0 $33,709,982 Capital Outlay Bill$794,318,000$0$10,000,000 27th Pay Period occurring in FY 2011-2012$0 $70,946,489$0 TOTAL EXPENDITURES$9,045,998,800$7,736,107,293$9,799,967,032$10,184,394,371$10,475,347,134 ANNUAL GROWTH RATE -14.48%26.68%3.92%2.86% Midyear Adjustments after 12/1/2009 ($490,408,817)$0 PROJECTED BALANCE$0$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 APPROPRIATED PriorCurrentProjected Fiscal Year REVENUES: 2009-20102010-20112011-20122012-20132013-2014 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$0 Act 633 of 2010 RLS Transfer Fund Balances$78,905,388$0 Act 633 of 2010 RLS Transfer from Incentive Fund$0$3,950,000$0 Act 226 Transfer from Incentive Fund$3,900,000 $0 Act 122 Transfer from Budget Stabilization Fund "Rainy Day Fund"$86,177,032$0 Act 226 Transfer from Insure LA Incentive Fund$75,587,322$0 Act 226 Transfer from Rapid Response Fund$13,500,000$0 Use of FY 07-08 Surplus$782,290,000$0 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$0$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$0 $33,709,982 Capital Outlay Bill$794,318,000$0$10,000,000 27th Pay Period occurring in FY 2011-2012$0 $70,946,489$0 TOTAL EXPENDITURES$9,045,998,800$7,736,107,293$9,799,967,032$10,184,394,371$10,475,347,134 ANNUAL GROWTH RATE -14.48%26.68%3.92%2.86% Midyear Adjustments after 12/1/2009 ($490,408,817)$0 PROJECTED BALANCE$0$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. (in millions)DecemberAprilJune FY2010$7,863$7,544$7,282 FY2011$8,021$7,776$7,719 4

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

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

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

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13. (in millions)FY08FY09FY10FY11FY12 5-Year Total Excess Itemized Deductions$152$250$255$260$265$1,182 Bracket ChangesN/A $359$251$262$872 Total Cost$152$250$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 13

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15. $7.1 BILLION 15

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

17. 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 17 $195 million $119 million $32 million $34 million $23 million $15 million

18.  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% 18

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20. 20 Governors that Supported Tax Increases by Party Republican55% Democrat75%

21. 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. 1. We need a balanced, transparent approach to solving Louisiana’s fiscal crisis. 2. Fiscal crisis is due in part to the global recession but is also of our own making. 3. Spending is not the problem. 4. We need RESPONSIBLE revenue measures, spending measures, and COMMON SENSE savings. 5. Revenue measures must be thoughtful, adequate, sustainable, and fair. 22

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