louisiana at the crossroads responses to louisiana’s financial crisis
DESCRIPTION
Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis Louisiana Association of Nonprofit Organizations Public Policy Institute April 6, 2011. WWW.LABUDGET.ORG. FY2012 Budget Highlights. 2,000 state employees to lose their jobs Charity hospitals funding cut - PowerPoint PPT PresentationTRANSCRIPT
![Page 1: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/1.jpg)
Louisiana at the CrossroadsResponses to Louisiana’s Financial Crisis
Louisiana Association of Nonprofit OrganizationsPublic Policy Institute
April 6, 2011
1
WWW.LABUDGET.ORG
![Page 2: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/2.jpg)
2,000 state employees to lose their jobs
Charity hospitals funding cut
College education to cost more
Public schools forced to absorb inflation
increases
Raiding the Millennium Trust Fund (tobacco
settlement money) to pay for TOPS
FY2012 Budget Highlights
2
![Page 3: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/3.jpg)
Employee Reductions 11% reduction since FY2008
3
FY2008 FY2009 FY2010 FY2011 FY2012 (Exec. Budget)
70,000
72,000
74,000
76,000
78,000
80,000
82,000
![Page 4: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/4.jpg)
Department of Social Services 44% reduction since FY2008
4
FY 07-08 FY 08-09 FY 09-10 FY 10-11 FY 11-12 (Exec. Budget)
$100,000,000
$120,000,000
$140,000,000
$160,000,000
$180,000,000
$200,000,000
$220,000,000
$240,000,000
![Page 5: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/5.jpg)
LSU Health Care Services 32% reduction since FY2008
5
FY 07-08 FY 08-09 FY 09-10 FY 10-11 FY 11-12 (Exec. Budget)
$50,000,000
$55,000,000
$60,000,000
$65,000,000
$70,000,000
$75,000,000
$80,000,000
$85,000,000
$90,000,000
$95,000,000
$100,000,000
Sta
te G
en
era
l Fu
nd
![Page 6: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/6.jpg)
Higher Education 30% reduction since FY2009
6
FY 07-08 FY 08-09 FY 09-10 FY 10-11 FY 11-12 (Exec. Budget)
$700,000,000
$800,000,000
$900,000,000
$1,000,000,000
$1,100,000,000
$1,200,000,000
$1,300,000,000
$1,400,000,000
$1,500,000,000
$1,600,000,000
$1,700,000,000
![Page 7: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/7.jpg)
Department of Education Level funding for 3 years
7
FY 07-08 FY 08-09 FY 09-10 FY 10-11 FY 11-12 (Exec. Budget)
$3,050,000,000.00
$3,100,000,000.00
$3,150,000,000.00
$3,200,000,000.00
$3,250,000,000.00
$3,300,000,000.00
$3,350,000,000.00
$3,400,000,000.00
![Page 8: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/8.jpg)
Youth Services 20% reduction since FY2008
8
FY 07-08 FY 08-09 FY 09-10 FY 10-11 FY 11-12 (Exec. Budget)
$100,000,000
$110,000,000
$120,000,000
$130,000,000
$140,000,000
$150,000,000
$160,000,000
![Page 9: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/9.jpg)
2011 2012 2013 2014
Revenues $7,831 $8,264 $8,621 $9,027
Expenses $7,736 $9,800 $10,184 $10,475
Balance $95 ($1,536) ($1,563) ($1,448)
State General FundProjected Budget Deficits FY2012-
14(millions)
9
![Page 10: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/10.jpg)
$1.6 billion ÷ $25.5 billion = 6%
Deficit as Percent of Total Budget
10
FY12 Projected Shortfall Total FY11 Budget
Percent of total FY11 budget to
be cut over 3 years
![Page 11: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/11.jpg)
11
![Page 12: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/12.jpg)
$1.6 billion ÷ $7.7 billion = 21%
Deficit as Percent of State General Fund Spending
12
FY12 Projected Shortfall FY11 State General Fund
Percent of FY11 state general fund to be cut in FY12
![Page 13: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/13.jpg)
13
![Page 14: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/14.jpg)
$1.6 billion ÷ $2.6 billion = 62%
Deficit as Percent of Discretionary Spending
14
FY12 Projected Shortfall
Percent of FY11 discretionary fund to
be cut in FY12
FY11 Discretionary Funds
![Page 15: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/15.jpg)
15
![Page 16: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/16.jpg)
Community & Technical Colleges
Food Stamps
LACHIP
Medicaid
State General Fund Revenue
0% 10% 20% 30% 40%
37%
20%
16%
13%
2%
Increases Since Pre-KatrinaFY05-FY10
16
![Page 17: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/17.jpg)
FY05 FY06 FY07 FY08 FY09 FY10 FY11 $-
$5,000,000,000
$10,000,000,000
$15,000,000,000
$20,000,000,000
$25,000,000,000
$30,000,000,000
$35,000,000,000
Total State BudgetTotal State Budget Less Hurricane Disaster Recovery FundingState General Fund
Spending Reverts to Pre-Katrina Levels (in 2009 dollars)
17
![Page 18: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/18.jpg)
(in millions) FY08 FY09 FY10 FY11 FY12 5-Year Total
Excess Itemized Deductions $152 $250 $255 $260 $265 $1,182
Bracket Changes N/A N/A $359 $251 $262 $872
Total Cost $152 $250 $614 $511 $527 $2,054Source:Department of Revenue for Excess Itemized Deductions, except FY12, which is LBP estimateLegislative Fiscal Office for Bracket Changes
Fiscal Effect of Stelly Repeals
18
![Page 19: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/19.jpg)
19
Louisiana NeedsBetter Choices
![Page 20: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/20.jpg)
441 tax exemptionsCurrent cost: $7.1 billion
A Better ChoiceReview Tax Exemption Budget
20
![Page 21: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/21.jpg)
State general fund revenues: $7.7 billion
Cost of tax exemptions: $7.1 billion
Tax code spending equals 92% of SGF revenues
FY 2011 Budget Projections
21
![Page 22: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/22.jpg)
From the list of 441…
22
Tax Expenditure / Tax Breaks Cost to Taxpayers
Deduction for federal income taxes $696,000,000
Excess federal itemized deductions $323,000,000
Insurance premium tax credit $200,000,000
Horizontal drilling exemption $168,000,000
Enterprise zone credit $110,000,000
Income shifting by multistate corporations $32,000,000
Paying businesses to file sales taxes timely $27,000,000
Plus 179 sales tax exemptions $3,900,000,000
More than one-third of these exemptions were enacted during the last 10 years…
![Page 23: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/23.jpg)
Tax Collections vs. Exemptions
23
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
In M
illions
of
Dollars
Corporation
Income Sales
Individual
Income
Corporation
Franchise Severance
Petroleum
Products
Actual Collections $435 $2,465 $2,240 $145 $774 $593
Total Potential Collections $1,768 $6,360 $3,314 $147 $1,128 $604
Estimated Exemptions $1,333 $3,895 $1,074 $2 $354 $11
Percentage of Tax Loss 75.4% 61.2% 32.4% 1.1% 31.4% 1.8%
![Page 24: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/24.jpg)
24
Sales tax exemption for groceries
Sales tax exemption for RX drugs
Sales tax exemption for residential electricity
Earned income tax credit
$328 million
$238 million
$146 million
$46 million
Exemptions can be good or bad . . .
. . . but all tax expenditures should be honestly and
fairly reviewed
![Page 25: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/25.jpg)
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%
A Better Choice
Make Tax Exemption Budget More Transparent
25
![Page 26: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/26.jpg)
26
A Better Choice
Review Louisiana’s Tax Structure for Fairness
![Page 27: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/27.jpg)
State & Local Taxes in 2007
27
![Page 28: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/28.jpg)
LSU Public Policy Research Lab
2011 Louisiana SurveyKirby Goidel, Director
28
![Page 29: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/29.jpg)
0
20
40
60
5 6
4841
5 3
4151
4 5
44 46
Public Opinion Divided on How Best to Handle Budget Shortfall
2009 2010 2011
LSU Public Policy Research Lab29
![Page 30: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/30.jpg)
Cuts gone too far
Cuts not gone far enough
Budget cuts about right
Don't know0
5
10
15
20
25
30
35
40
4540 41
6
13
40 39
8
13
Public Opinion Divided on Whether Budget Cuts Have Gone Too Far or Not Far Enough
2010 2011
LSU Public Policy Research Lab30
![Page 31: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/31.jpg)
Primary and secondary education
Health care for the poor
Colleges and universities
Roads and infrastructure
Vocational and workforce training
Environmental regulation
Economic development projects
0 10 20 30 40 50 60 70 80
7
10
10
10
11
22
24
24
23
29
40
43
45
48
Louisiana Residents Unwilling to Wield the Budgetary Axe?
Major Cuts Minor Cuts
LSU Public Policy Research Lab31
![Page 32: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/32.jpg)
Gas a
nd o
il
Reduc
ing
Homes
tead
Exe
mpt
ion
Stat
e sa
les ta
x
Highe
r Ear
ning
Indi
vidu
als
Toba
cco
Alcoho
lic b
evar
ages
Gamin
g in
cas
inos
0
20
40
60
80
925
4453
68 71 77
9
2943
5773 76
85Support for Specific Taxes
2010 2011
LSU Public Policy Research Lab32
![Page 33: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/33.jpg)
No
de
dic
ati
on
De
dic
ate
d t
o im
pro
vin
g r
oa
ds
De
dic
ate
d t
o s
tate
co
lleg
es
an
d
un
ive
rsit
ies
De
dic
ate
d t
o s
tate
he
alt
h c
are
Gas Tax Income Tax
010203040506070
9
5261 61
Support of Dedicated Tax Increases
LSU Public Policy Research Lab33
![Page 34: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/34.jpg)
0.0
20.0
40.0
60.0
25 24
51
15
27
59
Buyer’s Remorse on Stelly Repeal?
2010 2011
LSU Public Policy Research Lab34
![Page 35: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/35.jpg)
Support; 55.8Oppose, 29.4
Don't know; 14.8
Support for Temporarily Reinstating Stelly Tax Provisions to Address Current
Budget Shortfall
LSU Public Policy Research Lab35
![Page 36: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/36.jpg)
36
“We levy a tax, then we grant exemptions of that tax and it costs $7 billion. . . . This is something that ought to be looked at.”
Speaker of the House Jim TuckerBaton Rouge Advocate
February 2, 2011
Better Choices ARE possible
![Page 37: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/37.jpg)
37
The budget is “devastating” Suspending tax exemptions is “something we should debate”
Senate President Joel ChaissonBaton Rouge Business Report
September 24, 2010
![Page 38: Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis](https://reader035.vdocuments.mx/reader035/viewer/2022062719/56813066550346895d964173/html5/thumbnails/38.jpg)
We need Better Choices - NOW!
Join Better Choices for a Better
Louisiana TODAY!
www.BetterChoicesLa.org
38