Will "new" blood in the executive and legislative branches of government mean fresh ideas and innovative agendas for the state?
Louisiana has a new governor - and a new legislature. About half of the state's senators and representatives are newly elected to their seats. Will "new" blood in the executive and legislative branches of government mean fresh ideas and innovative agendas for the state? Get a feel for Louisiana's governmental future.
* Sen. Sharon Weston Broome (D), Baton Rouge. Senate President Pro Tempore Rep.
* Eddie J. Lambert (R), Gonzales. Vice-chairman, Appropriations Committee
* Barry Erwin, President, Council for A Better Louisiana
* Sen. Bill Cassidy, M.D. (R), Baton Rouge, Vice Chair, Health & Welfare Committee
2008 will go down as one of the busier years for Louisiana legislators. In a February special session, they met to re-write laws on how the state deals with governmental ethics issues. In March, they cut taxes on business and divvied-up over a billion dollars in surplus revenue from the previous fiscal year. These two sessions were declared great successes by the man who called for them -- Governor Bobby Jindal.
Legislators gave their thumbs up on virtually all of the items on the Jindal administration’s legislative wish list. Among the bills receiving speedy “yea” votes: House Bill 1 reduced sales tax business pay for electricity; HB 6 put $300 million in the Coastal Restoration and Protection fund; Senate Bill 5 granted income tax deductions on tuition and school-related expenses for parents of children in private schools; SB 12 accelerated the phase-out of sales tax on manufacturing machinery and equipment purchases. Nearly half of the billion dollar surplus will go for road and bridge improvements.
On March 31, the statehouse fills up again for the start of the 2008 regular session, which will run to 6:00 P.M., June 23. Because this is an even-numbered year, Louisiana’s constitution prohibits the enactment of bills which would either raise or lower state taxes.
The focus of the regular session will be to determine how much money will be spent on which government operations and programs, such as public schools and hospitals, roads, state parks and libraries and prisons. The governor has submitted his budget of $30 billion for consideration by the legislature. The budget covers the fiscal year beginning July 1, 2008 and ending June 30, 2009 [FY08-09].
The governor’s budget calls for spending about 12% less than last year’s budget. Much of the reduction comes from the spend-down of federal funds in 2007 related to Katrina and Rita recovery programs. Just one initiative -- The Road Home program – will be spending $3.1 billion less in FY08-09 than it did in FY 07-08.
Because such a large part of the 12% reduction in spending is from federal recovery-related funds, there will be much less of a budget “hit” on state government. “Most state agencies will have the ability to continue their programs pretty much as proposed,” according to Jim Brandt, President of the Public Affairs Research Council of Louisiana. “For example, higher education continues to be fully funded for the second year in a row,” Brandt says. “There may be some exceptions: (The Office of) State Parks is going to be down somewhat, but for the most part, it’s going to be a continuation budget.”
As with previous state budgets, this one is broadly divided into two categories of funding, which affects how much leeway the administration and the legislature have in allocating dollars. “Non-discretionary” funds have been dedicated for specific purposes because of federal mandates or other unavoidable obligations. “Discretionary” funds are the one that legislators and administration officials will be tussling over for the next few months in the senate and house. The bulk of discretionary funds go for health and social services and for lower and higher education.
FY 08-09 Budget compared with FY 07-08 Budget
FY 07-08 As
Recommended Over/(Under) Budgeted
General Fund Direct
General Fund By:
Fees & Self Generated
Interim Emergency Board
TOTAL STATE FUNDS
Higher Education (1)
(1) Reestablish Higher Education positions for Board of Regents and four
management boards to authorized position (T.O.) count
Source: Office of the Governor
Governor Jindal’s budget reflects his administration’s priorities for the state. The following information is excerpted from a presentation prepared by the Division of Administration. The full presentation can be viewed at http://www.doa.state.la.us/OPB/pub/FY09/ExecutiveBudget_FY2008-2009.ppt.
Priorities for the Jindal administration include the following:
“The overwhelming finding that emerges is the importance of workforce issues in location decisions. The availability of skilled labor, labor productivity, and labor costs all rate as the most important considerations in business location decisions.”
—Louisiana Business Image Survey Sponsored by the Committee of 100 for Economic Development. Conducted by the LSU Public Policy Research Lab
“Louisiana is not creating a capable workforce that can compete.”
—Andrew Shapiro, site consultant “Ethics change is only a start,” The Advocate, 2/10/08
1. $10 million new funding for workforce training and increasing capacity for high-demand fields such as construction and allied health
2. $4.5 million new funding for Career Technical Education
3. $3 million new funding for Quickstart Training Program
4. $47.6 million continued funding for the Incumbent Worker Training Program
Louisiana continues to post the lowest level of associate degree attainment in the country.
1. $34.7 million additional funding to fully fund the Higher Education Formula at $1.3 billion
2. $70.1 million teacher pay raise to maintain Southern Regional average (includes $14 million MFP)
3. $34.7 million to fully fund Higher Ed formula (Higher Ed)
4. Fully funded TOPS at $122.3 million
5. $8 million one-time funding for Endowed Chairs and Professorships for a total investment of $13.88 million
2007-2008 Assets and Opportunities Scorecard Overall Grade: F
—Corporation for Economic Development, cfed.org
Louisiana ranks 36th in GDP per capita
—Bureau of Economic Analysis Economic Development
1. 307 million dollars to be added to a "mega-projects" fund. This would triple the amount currently on-hand to lure large-scale industrial projects that bring at least 500 new jobs and $100 million in capital investments
2. $7.9 million more for Rapid Response Fund for securing economic development opportunities for a total investment of $17.9 million
3. $5.6 million continuing funds for Economic Development Regional Awards and Matching Grants program
“Least Healthy State” Prevention of Obesity (Ranked 48) Infant Mortality (Ranked 49) Cancer Fatality (Ranked 48) Premature Deaths (Ranked 49) Overall Health Care Outcomes (Ranked 50)
—United Health Foundation, 2006
Grading the States on Mental Health Louisiana Overall Grade: D-
—National Alliance on Mental Illness, 2006 Health Care
* $29M additional funding to continue Louisiana’s Plan for Mental Health Care - $13.8 million pilot Mental Health Improvement Plan for New Orleans and $15M to annualize 100 in-patient beds and 5 MHEREs statewide, for a total of $48.4M
* $10.2 million more for LaCHIP to expand eligibility up to 250% of the Federal Poverty Level [FPL] for a total investment of $145.7 million
* $60 million additional funding for Nursing Homes
* Electronic Medical Records – La Rural Hospital Exchange phase II ($11.1 million) and La Regional Information Exchange phase I ($7.5 million)
* $169 million more funding for Community Based Services for people with disabilities
Governor Jindal’s proposals sailed through the special sessions with amazing speed, but there were some voices of opposition here and there. Some possible areas of contention in the regular session:
Economic Development: Louisiana Economic Development Secretary Stephen Moret says he wants to both recruit new businesses to Louisiana and grow and expand existing Louisiana companies. Some legislators worry that too much emphasis is being placed on recruiting outside businesses to the state. They have concerns about the administration’s proposal to add hundreds of millions of dollars into a megafund intended to attract large outside business projects to the state. They say the money could be better used on other Louisiana needs. With Labor Secretary Tim Barfield proclaiming a workforce shortage of 100,000, some legislators, like Senator Mike Michot, (R) Lafayette, wonder whether or not the state could support a mega industry locating here. Workforce development is a top priority of the administration.
Infrastructure: With a backlog of $14 billion in needed highway maintenance and repairs, there is no shortage of road projects that require funding. The traditional north-south, urban-rural tensions that arise each year at the capitol can be expected again this summer. Legislators from the various regions of the state will be keeping a close eye on where the highway money goes.
Louisiana’s current financial picture makes it the envy of many other states. Our rainy day emergency spending fund is full. We had a billion dollar surplus from the previous fiscal year. Some observers are predicting another surplus in 2008. But the state also has many billions of dollars in financial obligations that, sooner or later, will come due. Decisions made by our legislators this summer will affect every Louisiana citizen this year and for many years into the future.
Costs Associated with Liabilities and Horizon Issues for Louisiana
* $10 billion for the Unfunded Accrued Liability
* $10-$12 billion for Other Post Employment Benefits (OPEB) — Retirees’ Group Insurance Benefits
* $1.2 billion for the Office of Risk Management
* Cash flow shortfall for Louisiana Stadium and Exposition District
* $847 million in Conservation/Restoration projects
* $15.8 billion in Capital Outlay projects for transportation infrastructure and Higher Ed deferred maintenance
* $4.7 billion in outstanding General Obligation Debt
Budget-related web links:
* Web portal to Louisiana State Legislature Pre-filed bills for the House and the Senate and important dates are posted here. http://www.legis.state.la.us/
* To view or download the state’s fiscal year 2008-2009 budget, go to: http://www.doa.louisiana.gov/opb/pub/FY09/FY09ExecBudget.htm
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