Home News-Free Gov. Jindal releases executive budget

Gov. Jindal releases executive budget

Budget reduces tax credit expenditures, presents pathway to protect higher education funding

BATON ROUGE – Governor Bobby Jindal released the administration’s Executive Budget for the upcoming fiscal year and outlined a pathway to protect higher education funding. Inside the Executive Budget, there are Seal_of_Louisiana_largeproposals to mitigate the impact to higher education institutions, and the Governor’s Commissioner of Administration also outlined options outside of the budget for the Legislature’s consideration to further reduce the impact to colleges and universities.

The Commissioner of Administration presented proposals outside of the budget because Revenue Estimating Conference (REC) guidelines limit the revenue sources that can be included in the Executive Budget.

The Executive Budget reduces non-recurring dollars, makes reductions to all state agencies, and continues the administration’s commitment to growing Louisiana’s economy by maintaining investments in infrastructure, fully funding the Minimum Foundation Program (MFP) for K-12 schools, and fully funding scholarship programs in both higher education and K-12 classrooms.

In addition to recurring reductions and continued streamlining efforts, the Executive Budget includes a $526 million reduction in tax credit expenditures by limiting certain refundable credits to an individual or business’s actual tax liability. This change does not increase the current tax obligation of any Louisiana taxpayer, and reduces the possibility of the state refunding taxes that were never collected.

Governor Jindal said, “In working with the Legislature over the last seven years, we have enacted balanced budgets that have fostered an economic climate that has enabled us to announce economic development projects that will result in more than 91,000 new jobs and $62 billion in new capital investments. Because of this work, we have also reversed a 25-year trend of migration out of the state to become a destination for people seeking stable, high quality jobs. In the last few years our state has had more people, more jobs, higher incomes, higher Gross Domestic Product and more exports than ever before.

“We fostered this climate by choosing to reduce taxes and cut government spending rather than raise taxes and grow government. In fact, including the reductions in this budget, we will have reduced the state’s budget by nearly $10 billion since 2008. We have also reduced the footprint of government by reducing the number of state government employees by nearly 34 percent.

“We have more work to do. This Executive Budget continues the transformation of state government by prioritizing healthcare and higher education through the transformation of certain refundable tax credits.”

The FY 16 Executive Budget proposes total funding of $24.6 billion, a decrease of $1.2 billion, or 4.7 percent, compared to the FY 15 operating budget of $25.8 billion. Since 2008, the total budget has been reduced by nearly $10 billion. This year’s proposal employs a variety of strategies to balance the budget:

Department-by-department strategic reductions to the existing operating budget: approximately $415 million
• Recurring savings from mid-year plan and GEMS efficiencies from FY15 and FY16 that has reduced the need for revenue within state agencies: approximately $180 million
• Reduction in expenses on certain refundable tax credits: $526 million
• Requiring agencies to absorb certain increases, including state employee performance adjustments, inflationary costs, and the growth of some programs: approximately $160 million
• Utilizing surplus dollars and other non-recurring sources of income for approximately $300 million. This budget has reduced the amount of funding that will require another source in the future by nearly 70 percent.

With the proposed elimination of 727 additional positions in the upcoming fiscal year, Louisiana will have the smallest number of state government employees in 25 years. Based on figures from the Department of State Civil Service, between December 31, 2007 and December 31, 2014:

• The total “head count” of all employees in the executive branch of state government has decreased from 100,677 to 70,263, a reduction of 30,414, or 30.2 percent.
• In terms of full-time employees (or FTEs), the total has fallen from 93,554 to 62,384, a reduction of 31,170, or 33.3 percent.
• As a result of the reduction in the number of state employees, the overall state payroll has been reduced by a total of more than $828 million – from $4.154 billion to $3.326 billion.

K-12 Funding

The Executive Budget will increase state aid to local K-12 schools through the Minimum Foundation Program (MFP) to its highest level yet to provide funding for 6,284 more students.

In the FY16 proposal, the total funding for the MFP will be $3,628,258,948, which is more than 16 percent higher than in 2008.

Health Care

The Executive Budget includes no Medicaid provider rate reductions; protects current funding levels for public-private partnership hospitals and clinics; and protects individuals receiving home and community-based waiver services, ensuring no cuts to those currently receiving services.

Higher Education

The Executive Budget includes $30 million in funding provided for the Workforce and Innovation for a Stronger Economy (WISE) initiative.

The next fiscal year’s budget will include $34.3 million in additional funds to fully fund TOPS. The projected number of TOPS recipients for FY 2015-2016 is 55,278 with a total funding of $284.3 million.

This budget proposal also includes an investment of $185,000 for the Louisiana Procurement Technical Assistance Center (PTAC) at the University of Louisiana at Lafayette. Since its inception, PTAC has helped Louisiana small businesses obtain $4.5 billion in contracts, creating 19,000 new direct jobs and generating more than $100 million in tax revenue within the state.

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