Editor’s Note: The following comes from the Louisiana Association of Business and Industry as part of its Budget Basics series. It’s a series of “Did You Know?” questions about Louisiana’s state budgetary structure.
- The Louisiana Legislature appropriated more than $25 billion in the current fiscal year – a state budget that is 44 percent larger than ten years ago and represents the highest per capita spending among states in the South?
- Action Item: Enact cost controls on spending so that the state doesn’t find itself in another deficit in a few short years.
- Most of Louisiana’s $25 billion state budget is considered off-limits to annual review or reductions?
- Action Item: Eliminate most statutory dedications and allow for annual prioritization of spending.
- More than $100 million is earned in interest every year on statutory dedications that is not allowed to remain with the State General Fund where it is invested?
- Action Item: Require interest earned on dedications to remain with the State General Fund.
- Louisiana sends more than $6 billion of the $25 billion annual budget back to local government and school districts?
- Action Item: Review and reduce ALL government spending, including the portion that is sent to local government.
- Funding for K12 schools has not been reduced in any of the recent deficits? In fact, spending has increased by more than $900 million in State General Fund for schools over the past decade?
- Action Item: Review ALL government spending and avoid additional reductions to areas of the state budget that have been repeatedly scrutinized, instead focusing on areas where costs and funding continue to grow.
- The Medicaid budget for Louisiana has increased by more than $1 billion over the past decade, just in the State General Fund share?
- Action Item: Seek reforms to the Medicaid program that can improve access and quality of care while also controlling the exponential growth in costs of services.
- Nearly half of the state’s bond debt for capital construction is NOT spent on state projects, but on local projects or non-public entities? In fact, Louisiana is one of only 8 states that allow private organizations to make request for state capital dollars?
- Action Item: Reform capital outlay so that state tax dollars fund statewide infrastructure priorities.
- The judicial budget for Louisiana’s courts increases every year, even in times of deficit?
- Action Item: Review ALL government spending, even when it occurs in other branches of government.
- Higher education in Louisiana is largely funded as a block grant with little emphasis on outcomes or performance, even as the state experiences some of the lowest graduation rates in the country?
- Action Item: When stabilizing funding for higher education, ensure there are appropriate mechanisms for transparency and accountability to drive better outcomes.
- The state budget still includes funding for various non-governmental organizations, either as line items or through statutory dedications?
- Action Item: Review and reduce ALL government spending, even if the dollars are in small amounts.
- Louisiana incarcerates more people per capita than any other state – and at a cost that goes up year after year?
- Action Item: Enact bipartisan smart-on-crime reforms that promote public safety while also controlling costs and allowing investments in other state priorities.
- Hundreds of millions of dollars in Louisiana’s budget divert State General Fund for a specific purpose, leaving higher education and healthcare exposed for reductions during times of deficit? For example, a technology fund channels $10 million of taxpayer funds annually into a permanent dedication that will never be re-evaluated to determine if those technology needs have been met?
- Action Item: For example, a technology fund channels $10 million of taxpayer funds annually into a permanent dedication that will never be re-evaluated to determine if those technology needs have been met?
- The state’s budget deficit projections assume that all inflationary needs will be funded every year?
- Action Item: Require agencies to absorb the cost of inflation during a deficit, choosing instead to mitigate reductions in high-priority areas.
- Louisiana’s liabilities for retired workers is more than $19 billion – and the cost to the state goes up every year?
- Action Item: Overhaul state pension systems based on best practices from other states and the private sector.
- Louisiana’s taxes, licenses, and fees are already projected to increase every year for the next five years?
- Action Item: #FixGovtFirst before seeking to dramatically raise new revenue.
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