KBC2002

1
KBC2002
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Presented by Senate Fiscal Services May 7, 2002
3
FY03 Total Means of Financing 15.7 b.
(in million )
General Fund 6,636 42
Federal 5,558 36
Statutory Dedications 2,372 15
Self-Generated 1,088 7
4
FY03 Total Expenditures 15.7 b.
(in million )
Human Resources 4,809 31
Other 2,174 14
Public Safety 736 5
Education 5,663 35
Gen. Govt. 2,301 15
5
FY03 General Fund Revenue 5.9 b.
(in million )
Individual Income 1,789 30
Mineral 521 9
Gaming 671 11
Corporate 462 8
Other 151 3
Sales 2,335 39
6
FY03 General Fund Expenditures 6.6 b.
(in million )
Human Resources 1,366 21
Other 244 4
Public Safety 460 7
Education 3,554 53
Gen. Govt. 1,012 15
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Revenue Growth

• Revenue Growth For Operating Budget from FY02 to
  FY03 is 122 million.
• To produce this revenue growth amount, the
  legislature will have to vote to renew 593
  million in taxes that will expire on June 30,
  2002.

8
Taxes Expiring on June 30, 2002 (in million )
9
Total General Fund Expenditures Discretionary
Vs. Non-Discretionary
Discretionary 36
Non-Discretionary 64
10
FY03 Non-Discretionary General Fund Expenditures
4.2 b.
(in million )
Human Resources 694 17
Public Safety 369 9
Other 22 1
Education 2,448 58
Gen. Govt. 635 15
11
FY03 Discretionary General Fund Expenditures
2.4 b.
(in million )
Human Resources 672 27
Other 223 9
Public Safety 92 4
Education 1,105 45
Gen. Govt. 377 15
12
Above-the-Line Funded with continuing revenue
sources. Below-the-Line Contingent on renewal
of expiring taxes.
13
Items Above-the-Line FY03 Enhancements
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FY03 Budget Enhancements

• Increased funding to Urban Affairs 3.2 m.
• Increased funding to Rural Development 3.0 m.
• Funding for professional service contracts to
• attract professional sports to La. 0.3 m.
• Capitol Park maintenance adjustments 0.8 m.
• Rent and maintenance of state buildings 2.8 m.
• Capitol Security adjustment 0.6 m.
• Computer-related adjustments 2.2 m.

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FY03 Budget Enhancements

• Annualize funding for Homeland Security 1.1 m.
• NCAA Mens Final Four and Womens Volleyball
• Tournament 1.0 m.
• Partnership of Baton Rouge 0.4 m.
• Public Health Research Facility 1.0 m.
• Hornets Transition to New Orleans 1.8 m.
• Compaq Classic Golf Tournament 0.3 m.
• Advanced Maritime Technology Application
  Center 1.8 m.

16
FY03 Budget Enhancements

• Economic Development Grants Match Program 0.9
  m.
• Adds 400 slots to the Medicaid MR/DD Waiver
• Program 3.9 m.
• Increase for Community and Technical Colleges
• Pool 6.6 m.
• Governors University-Based Regional Economic
• Development Initiative, Master Plan
  Implementation,
• and Campus Budget Stabilization 4.0 m.
• Governors Brain Gain Initiative 2.0 m.
• Teacher Quality Program 0.8 m.

17
FY03 Budget Enhancements

• Governors Bioscience Initiative at LSU 4.0
  m.
• Increase funding for Center for Structural
  Biology
• Proteomic 1.0 m.
• Debt Service 53 m.
• MFP and Teacher Pay 45.2 m.
• Under the current MFP resolution, 50 of the
  growth in state aid for public schools must be
  used to boost teacher pay for the next few years
  (FYs 03, 04, and 05) until teacher salaries reach
  the Southern average.

18
FY03 Budget Enhancements

• The Executive Budget pegs the MFP's growth at
  45.2 million for FY 02-03. Half of this amount,
  or 22.6 million, is to be distributed to over
  59,000 teachers. This provides a 337 raise for
  the state's teachers. With the average teacher
  salary estimated at 35,437, the proposed raise
  equates to a 1.0 increase.

19
Items Below-the-Line
20
Of Department Below-the Line
If a department is not listed, it had 0
below-the-line.
21
Items Below-the-Line by Category Total Funding
Environment 16 1
(in million )
Education 87 4
Health Welfare 1,893 89
Other 97 5
Public Safety Corrections 21 1
22
Items Below-the-Line by Category General Fund
Environment 8 1
(in million )
Education 78 13
Health Welfare 405 68
Other 87 15
Public Safety Corrections 15 3
23
Supplemental Items 3 Sales Tax
3 Sales Tax Supplemental Items 1.7 billion
total (344.6 million State General Fund)
24
Supplemental Items 3 Sales Tax

• 05-252 Office of Business Development 1.7
  million La. Economic Development Fund Marketing
  and financial assistance programs.
• 06-267 Office of Tourism 3.3 million Fees
  and Self-Generated Revenues Out-of-state Media
  Advertising.
• 09-306 Medical Vendor Payments 1.3 billion
  (303.8 million State General Fund) Medicaid
  claims and uncompensated care costs payments to
  private and public providers of medical services.
• 09-319 Villa Feliciana Medical Complex 0.75
  million Interagency Transfers Patient Care in
  the Inpatient Tuberculosis Unit.

25
Supplemental Items 3 Sales Tax

• 09-330 Office of Mental Health 6.1 million
  (2.4 million State General Fund) General
  administration of the central office and
  oversight of the state mental health systems.
• 09-331 Central La. State Hospital 4.2
  million Administrative Services.
• 09-332 Eastern La. Mental Health System
  16.5 million (2.3 million State General Fund)
  Administrative and Patient Care Services.
• 09-333 Southeast Louisiana Hospital 19.2
  million (233 State General Fund)
  Administrative and Patient Care Services

26
Supplemental Items 3 Sales Tax

• 09-340 Office for Citizens with Developmental
  Disabilities 34.3 million (30.9 million State
  General Fund) General administration of the
  central office, oversight of the state facilities
  serving the developmentally disabled and support
  services to disabled individuals living in the
  community.
• 09-342 Metropolitan Developmental Center
  29.2 million (0.25 million State General Fund)
  Administrative, Patient Care, and Community
  Support Services.
• 09-344 Hammond Developmental Center 32.7
  million (0.47 million State General Fund)
  Administrative and Patient Care Services.

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Supplemental Items 3 Sales Tax

• 09-346 Northwest Developmental Center 14.7
  million (0.04 million State General Fund)
  Administrative and Patient Care Services.
• 09-347 Pinecrest Developmental Center 78.9
  million (1.5 million State General Fund)
  Administrative, Patient Care, and Community
  Support Services.
• 09-348 Ruston Developmental Center 7.4
  million (0.07 million State General Fund)
  Administrative and Patient Care Services.

28
Supplemental Items 3 Sales Tax

• 09-349 Southwest Developmental Center 10.2
  million (1.2 million State General Fund)
  Administrative, Patient Care, and Community
  Support Services.
• 09-351 Office for Addictive Disorders 1.8
  million total (0.4 million State General Fund)
  Administration of Inpatient and Outpatient
  Substance Abuse Services.
• 19-600 LSU Board of Supervisors 129.8
  million Interagency Transfers Uncompensated
  Care Costs Payments to LSU Health Science Center
  Shreveport for medical services to uninsured
  patients.

29
Supplemental Items 3 Sales Tax

• 19-620 UL Board of Supervisors 0.25 million
  State General Fund Computer Hardware and
  Software Purchases.
• 19-681 Subgrantee Assistance 1.0 million
  State General Fund United Charter School in
  East Baton Rouge Parish.
• 19-653 La. School for the Deaf 0.09
  million Interagency Transfers Administration
  and Support Services.
• 19-655 La. Special Education Center 5.8
  million Interagency Transfers Administrative
  and Support, Residential, and Instructional
  Services.

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Supplemental Items 3 Sales Tax

• 19-699 Special School District 3.3 million
  Interagency Transfers Administration and
  Instructional Services at Special School District
  1.

3 Sales Tax Supplemental Items 1.7 billion
total (344.6 million State General Fund)
31
Supplemental Items 1 Sales Tax
1 Sales Tax Supplemental Items 162.3 million
total (116 million State General Fund)
32
Supplemental Items 1 Sales Tax

• 01-100 Executive Office 10.1 million State
  General Fund Office of Urban Affairs.
• 01-112 Military Department 1.1 million
  State General Fund Homeland Security.
• 04-141 Justice Department 3.0 million (2.6
  million State General Fund) Administrative
  Services.
• 04-144 Elections Department 0.9 million
  State General Fund Activities Associated with
  Financial Mgt., Elections, and Voter
  Registration.
• 04-147 State Treasury 0.34 million State
  General Fund Administrative Services.

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Supplemental Items 1 Sales Tax

• 04-160 Department of Agriculture and Forestry
  1.7 million State General Fund Office of
  Management and Finance, Support Services
  Activities.
• 04-146 Lieutenant Governor 1.8 million
  (0.8 million State General Fund) AmeriCorp
  Administration.
• 05-252 Office of Business Development 0.55
  million La. Economic Development Fund Marketing
  and Financial Assistance Programs.
• 07-273 DOTD Administration 0.07 million
  State General Fund Zachary Taylor Parkway.

34
Supplemental Items 1 Sales Tax

• 07-275 Office of Public Works 1.1 million
  State General Fund Five Projects Louisiana
  Airport Authority, Poverty Point Lake Commission,
  Millenium Port, Amite River Basin, and Fifth
  Levee District.
• 08-403 Office of Youth Development 19.9
  million (14.2 million State General Fund)
  Contract Services Program, Juvenile Residential
  and Non-Residential Slots.
• 08-418 Office of Management and Finance
  0.37 million State General Fund Information
  Technology Services.

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Supplemental Items 1 Sales Tax

• 08-421 Office of Legal Affairs 0.26 million
  State General Fund Increased Administrative
  Hearings Expenditures.
• 09-305 Medical Vendor Administration 3.9
  million (1.0 million State General Fund)
  General administration of Louisianas Medicaid
  program.
• 09-306 Medical Vendor Payments 46.9 million
  (11.2 million State General Fund) Medicaid
  claims and uncompensated care costs payments to
  private and public providers of medical services.

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Supplemental Items 1 Sales Tax

• 09-307 DHH Office of the Secretary 0.7
  million (0.6 State General Fund) General
  management and financial administration of the
  department.
• 09-326 Office of Public Health 3.9 million
  State General Fund Funding for Bio-Terrorism
  Activities.
• 09-330 Office of Mental Health 0.3 million
  State General Fund Administration and Support
  Services.
• 10-357 DSS Office of the Secretary 5.6
  million State General Fund Executive Support,
  Administrative Costs, and Other Non-allowable
  Federal Expenditures.

37
Supplemental Items 1 Sales Tax

• 11-431 DNR Office of the Secretary 0.8
  million State General Fund Atchafalaya Basin
  Program.
• 12-440 Office of Revenue 0.6 million State
  General Fund Tax Collection Program.
• 13 Department of Environmental Quality 7.0
  million State General Fund Represents 93.4 of
  General Fund recommended for this department.
• 16-511 DWF Management and Finance 0.2
  million State General Fund Funding for
  Administrative Hearings.

38
Supplemental Items 1 Sales Tax

• 16-514 Fisheries 0.02 million State General
  Fund Aquatic plant control in Monroe.
• 17-562 Ethics Administration 1.3 million
  (1.2 million State General Fund) Operating
  Costs.
• 19-Higher Ed. Board of Regents, Louisiana
  Universities Marine Consortium, LSU Board of
  Supervisors, SU Board of Supervisors, UL Board of
  Supervisors, Louisiana Community and Technical
  Colleges Board of Supervisors 10.6 million
  State General Fund Classified State Employees
  Merit Increase.

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Supplemental Items 1 Sales Tax

• 19-681 Subgrantee Assistance 12.0 million
  State General Fund One-time salary supplement
  for support personnel.
• 20-966 Supplemental Pay 27.1 million State
  General Fund Supplemental payments to deputy
  sheriffs (10.4 million), firefighters (7.2
  million), constables ( .3 million), and
  municipal police (9.2 million). Approximately 39
  percent of total supplemental payments.

1 Sales Tax Supplemental Items 162.3 million
total (116 million State General Fund)
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Supplemental Items Individual Income Tax
Limitation on Excess Itemized Deductions
Individual Income Tax Limitation on Excess
Itemized Deductions Supplemental Items 139.6
million total (90.0 million State General Fund)
41
Supplemental Items Individual Income Tax
Limitation on Excess Itemized Deductions

• 06-262 Office of the State Library of
  Louisiana 1.5 million State General Fund
  State Aid to Public Libraries for books, data and
  telephone lines, computer soft ware and internet
  access for the public at all parish libraries in
  across the state.
• 06-265 Office of Cultural Development 3.9
  million State General Fund State matching funds
  for federal art grants.

42
Supplemental Items Individual Income Tax
Limitation on Excess Itemized Deductions

• 09-305 Medical Vendor Administration 5.4
  million (1.4 million State General Fund)
  General administration of Louisianas Medicaid
  program.
• 09-306 Medical Vendor Payments 59.5 million
  (14.0 million State General Fund) Medicaid
  claims and uncompensated care costs payments to
  private and public providers of medical services.

43
Supplemental Items Individual Income Tax
Limitation on Excess Itemized Deductions

• 09-307 DHH Office of the Secretary 1.0
  million (0.9 State General Fund) General
  management and financial administration of the
  department.
• 14-474 Office of Workforce Development 1.1
  million State General Fund State matching funds
  for the federal Welfare-to-Work grant.

44
Supplemental Items Individual Income Tax
Limitation on Excess Itemized Deductions

• 19-671 Board of Regents 4.3 million State
  General Fund State aid to independent colleges
  and universities for academic programs.
• 19-600 Louisiana State University Board of
  Supervisors 3.0 million State General Fund
  Neurobiotechnology research at the LSU Health
  Sciences Centers in New Orleans and Shreveport
  and Tulane University Health Sciences Center.

45
Supplemental Items Individual Income Tax
Limitation on Excess Itemized Deductions

• 19-Higher Ed. Board of Regents, Louisiana
  Universities Marine Consortium, LSU Board of
  Supervisors, SU Board of Supervisors, UL Board of
  Supervisors, Louisiana Community and Technical
  Colleges Board of Supervisors 15.8 million
  State General Fund Group Insurance Increase.
• 19-681 Subgrantee Assistance 12.8 million
  State General Fund Graduate Exit Exam (GEE) 21
  summer school, Louisiana Education Assessment
  Program (LEAP) 21 tutoring program and school
  improvement grants.

46
Supplemental Items Individual Income Tax
Limitation on Excess Itemized Deductions

• 19-610 LSU Health Sciences Center Health
  Care Services Division 3.3 million State
  General Fund Disease Management and Prevention
  Program operated at all nine facilities for
  Asthma, H.I.V., Cardiology, and Diabetes
  patients.
• 19-610 LSU Health Sciences Center Health
  Care Services Division 0.2 million State
  General Fund Vascular surgeon to staff the
  prisoner dialysis unit at Earl K. Long Medical
  Center.

47
Supplemental Items Individual Income Tax
Limitation on Excess Itemized Deductions

• 20-966 Supplemental Pay to Law Enforcement
  Personnel 18.6 million State General Fund
  26 of the total funding for supplemental pay to
  municipal police officers (6.3 million),
  constables (0.2 million), firefighters (4.9
  million), and deputy sheriffs (7.2 million).
• 20-XXX Miscellaneous 9.1 million State
  General Fund Rural Development Fund.

48
Supplemental Items Individual Income Tax
Limitation on Excess Itemized Deductions
Individual Income Tax Limitation on Excess
Itemized Deductions Supplemental Items 139.6
million total (90.0 million State General Fund)
49
Supplemental Items Tobacco Tax - 4 per
Cigarette Pack
Tobacco Tax - 4 per Cigarette Pack Supplemental
Items 56.4 million total (14.0 million State
General Fund)
50
Supplemental Items Tobacco Tax - 4 per
Cigarette Pack

• 09-305 Medical Vendor Administration 4.6
  million (1.2 million State General Fund)
  General administration of Louisianas Medicaid
  program.
• 09-306 Medical Vendor Payments 51.0 million
  (11.9 million State General Fund) Medicaid
  claims and uncompensated care costs payments to
  private and public providers of medical services.

51
Supplemental Items Tobacco Tax - 4 per
Cigarette Pack

• 09-307 DHH Office of the Secretary 0.85
  million (0.77 State General Fund) General
  management and financial administration of the
  department.

Tobacco Tax - 4 per Cigarette Pack Supplemental
Items 56.4 million total (14.0 million State
General Fund)
52
Supplemental Items Auto Rental Excise Tax
Auto Rental Excise Tax Supplemental Items 19.9
million total (5.0 million State General Fund)
53
Supplemental Items Auto Rental Excise Tax

• 09-305 Medical Vendor Administration 1.5
  million (0.4 million State General Fund)
  General administration of Louisianas Medicaid
  program.
• 09-306 Medical Vendor Payments 18.2 million
  (4.3 million State General Fund) Medicaid
  claims and uncompensated care costs payments to
  private and public providers of medical services.

54
Supplemental Items Auto Rental Excise Tax

• 09-307 DHH Office of the Secretary 0.28
  million (0.25 State General Fund) General
  management and financial administration of the
  department.

Auto Rental Excise Tax Supplemental Items 19.9
million total (5.0 million State General Fund)
55
Supplemental Items Miscellaneous

• 08-419 State Police 0.45 million (Statutory
  Dedications) Gaming Enforcement Program.
• 11-432 Office of Conservation 0.82 million
  (Statutory Dedications) Oil and Gas Regulatory
  Program.
• 13 Dept. of Environmental Quality 7.5
  million (Statutory Dedications) Environmental
  Trust Fund.
• Fee package passed during 2002 Special
  Legislative Session.

56
Supplemental Items Miscellaneous

• 20-OREQ Other Requirements 7.4 million
  (Statutory Dedications) Pari-mutuel Live Racing
  Facility Gaming Control Fund.

Miscellaneous Supplemental Items 16.2 million
total (All Statutory Dedications)
57
Supplemental Items Suspension of the 25 per
Child Education Income Tax Credit

• 19-661 Office of Student Financial Assistance
  18.0 million State General Fund 19 of the
  total funding for the TOPS Tuition Program.

Suspension of the 25 per Child Education Income
Tax Credit Supplemental Items 18.0 million
State General Fund
58
Taxes Expiring on June 30, 2002 (in million )
59
Pending FY03 Issues
60
Pending Budget Issues for FY03
Budget Shortfall in the Medicaid Program Based
on current projections, the Medicaid program is
roughly 270 million (78 million State General
Fund) short for the continuation of existing
programs and services and to absorb the increases
in utilization of services and growth in service
costs. Part of the problem is due to the use of
44.8 million in non-recurring revenue sources in
building the FY 2002 budget.
61
Pending Budget Issues for FY03
Health Care for Inmates Effective July 1, 2002,
the federal government will no longer allow the
use of federal financial participation in DSH
payments for inmate medical services at charity
hospitals. Currently, HCSD provides 32 million
of health care services to inmates at its
facilities across the state. Beginning in FY
2003, State General Fund will become the primary
revenue source for this care.
62
Pending Budget Issues for FY03
Risk Management Has not been fully funded to
provide for anticipated claims 55
m. Anticipated claims 150 m. 95 m. has been
budgeted. Premium increases to cover road
hazard claims and to restore reserves to an
acceptable level 41 m. Sheriffs Housing
Funding needed to cover projected state inmate
population in local jails 8.7 m.
63
Pending Budget Issues for FY03
The MFP and Health Insurance The Executive
Budget provides 31.8 million for local school
systems to pick up part of the tab for the
increase in Group Insurance health care costs.
This funding is not provided through the MFP,
however. BESEs projected FY03 budget currently
calls for the MFP to provide an additional 25 m.
for school systems to address anticipated
increases in the employers share of health
insurance premiums. Further, the pending MFP
resolution also seeks an additional 13.9 m. to
address additional formula growth factors.
64
Pending Budget Issues for FY03
65
Tax Plan
66
Tax Plan Proposal

• Eliminate 4-cent state sales tax on food and
  utilities. (252.4 m.)
• Eliminate 4-cent state sales tax on businesses
  that purchase manufacturing machinery and
  equipment. (162 m.)
• Reduce the personal income tax by restoring the
  deduction. (90 m.)

67
Tax Plan Proposal

• Phased-in using 10 and 20 reductions based on
  3 and 6 growth rates respectively for each
  category over a period of time until the taxes
  are phased-out.
• The total amount of taxes estimated to be
  eliminated is approximately 500 million.
  Theoretically, 10 percent a year would be 50
  million.

68
Tax Plan Proposal
Tax on Utilities on Residences (16.8 m. X 4)
67.2 m. Tax on Food (46.3 m. X 4) 185.2
m. Restore Excess Itemized Deductions 90.0
m. Manufact. Machinery Equip. (40.5 m. X 4)
162.0 m. TOTAL TAX CUT 504.4 m. ANNUAL
TAX CUT OF 10 50.4 m.
69
Tax Plan Observations

• Will guarantee the current revenue stream
  through FY03 because projected revenue growth
  level will not trigger a tax cut.
• In the event that at least one penny of the
  sales tax on food and utilities along with the
  renewal of the suspension of 1/2 of the excess
  itemized deduction were defeated this session, an
  additional 200 m. would have to be cut from a
  budget thats already 100 m. in the hole.

70
Tax Plan Observations

• Could eventually eliminate the regressive tax
  on food and utilities.
• The 4 sales tax on food and utilities is one of
  the more regressive taxes that can be imposed.
  The governors plan, if revenue growth thresholds
  occur, could lead to the elimination of this tax
  over a period of time.

71
Tax Plan Observations

• Eliminates the need to renew taxes every two
  years.
• The current practice of renewing over 600
  million in taxes every two years creates
  unnecessary turmoil in the budget process and
  makes for a very confusing and complicated budget
  and appropriations bill.
• The uncertainty of this revenue source is of some
  concern to Wall Street because of Louisianas
  significant debt. It is unlikely that the
  enactment of the governors plan will lead to an
  immediate upgrade in the states bond rating
  because of the many other budget uncertainties
  that the state still faces, but the elimination
  of this item will bring the state a little closer
  to an improved rating.

72
Tax Plan Observations

• The Tax Plan has the intention of being a
  ten-year phase out. There is no guarantee,
  however, either in the legislation or otherwise,
  that will ensure a ten-year elimination of the
  taxes.
• The mid-1990s saw significant growth in revenue
  because of the start-up of the gaming industry
  close to 500 million. Currently, there are not
  any new revenue sources on the horizon.

73
Tax Plan Observations

• If revenue decreases occur mid-year, there is no
  mechanism to take the tax cut back.
• This tax plan does not address our structural
  deficit ...

74
Tax Plan Observations
Structural Deficit
75
Tax Plan Observations

• Estimates indicate that it would take somewhere
  around 286 million to bring teachers pay up to
  the Southern average, and close to 280 million
  to bring university funding up to the average of
  Southern peers.
• This cannot be accomplished incrementally,
  because the average is a moving target and
  increases each year.
• The tax plan is not revenue-neutral nor is it
  tied to specific expenditure reform so that a
  clear picture of impact on state services is not
  available.

76
Tax Plan Observations Initiatives

• Many of the popular initiatives over the past 10
  years have been funded with excess revenues
• Teacher pay raises
• Debt Reduction
• Teacher supplies
• Teacher Technology Fund
• LaCHIP
• LSUHSC-HCSDs Disease Mgt. Program
• School-Based Health Centers
• Home and Community-Based Waiver Programs
• Adult Day Health Waiver

77
Tax Plan Observations Initiatives

• Elderly and Disabled Waiver
• Childrens Choice Waiver (TEFRA-Lite)
• MR/DD Waiver
• Personal Care Attendant Waiver
• Drug Courts
• Outpatient Mental Health Services, including
  pharmaceuticals.

78
Tax Plan Observations Initiatives
Teacher pay raises Over 350 million in state
funds have been committed to teacher salaries,
with almost all of that coming in the last 6
years.
79
Tax Plan Observations Initiatives
80
Tax Plan Observations Initiatives
Teacher Supplies one-time revenue sources were
utilized in FYs 98 and 99 to provide 23.5
million in funding for teacher supplies and
equipment at an average of 200 per
teacher. Classroom-based Technology
one-time revenues have helped provide over 70
million in hardware and software for the state's
classrooms in recent years. The initiative has
improved the student/computer ratio from 881 to
61.
81
Tax Plan Observations Initiatives
School and District Accountability The current
budget for improvements in teaching, testing,
charter schools, etc., is 56.3 million. Most of
this funding has been provided in the last 6
years. TOPS The scholarship
assistance program begun in 1997 will provide 93
million in FY 03 for 39,000 participating college
students.
82
Tax Plan Observations Initiatives

• Since FY 1993, Louisiana has invested 615.9
  million more State General Fund in its Medicaid
  program.
• During the same time period, the overall program
  has only grown 310.2 million.
• Without the stabilization of the state financial
  participation in the Medicaid program after the
  federal government ended the 31 Disproportionate
  Share Payments, severe cuts in the provision of
  services and reimbursement rates paid to
  providers would have been necessary.

83
Radar Screen Issues
84
Radar Screen Issues
Louisiana owes the federal government 246
million for over billing Medicaid and other
federally funded programs to cover road hazard
claims.
Louisiana owes the federal government 322
million (estimate) for holding harmless private
pay patients in nursing homes from a provider tax
levied on nursing home beds. This was violation
of federal rules.
85
Radar Screen Issues
The current cost of bringing Louisiana teacher
pay up to the Southern average is 286 million.
If both the Louisiana and Southern averages
increase as expected next year, the cost of
reaching the average will be 291 million.
Revenue from the gasoline and special fuels tax
will grow by 1.3 next year while the cost of
road construction and maintenance grows 4.5.
Louisianas self-insurance reserves will dip to
about 24 million (Less 10.5 million dedicated
for future medical payments) this year while its
claims liability is over 1.2 billion.
86
Radar Screen Issues
Turnover in the state workforce is approaching
25 per year. This high rate of turnover is
costly because it requires a larger workforce to
do the job.
For the past 12 years, agencies have had to
absorb the cost of merit raises (33 million) and
inflation (61 million). By making agencies eat
this cost, the savings of nearly 100 million can
be used for other priorities of government. No
one knows how much longer this practice can
continue.
87
Radar Screen Issues
Under the Balanced Budget Act, the federal
government placed a cap on the federal matching
funds used in state Disproportionate Share
Payments (DSH) Programs. For FY 2003 and
beyond, the DSH cap is 631 million. In the
current year, DHH is budgeted to spend 627.8
million in federal funds on DSH payments. Current
estimates for FY 2003 project federal funds for
DSH at 625.8 million. Once the federal share
of DSH expenditures reach 631 million, State
General Fund will be required for any program
growth or cuts will have to implemented.
88
Radar Screen Issues
89
Radar Screen Issues
As the future for health care is contemplated,
national expenditures on health care are
projected to grow 7.3 percent per year through
2011. Pharmaceutical costs are estimated to rise
18 percent per year. Additional state funds will
be required to maintain current services in the
future.
90
FY02 Supplemental Appropriations Bill
91
Additional Revenue Contained in Appropriation
Instruments
Recurring Revenue over the FY02 Official
Forecast 70.3 m Non-Recurring FY01
Surplus 73.0 m Amnesty Prog. and
Incentive Fund transfer 156.0 m TOTAL
229.0 m Less Rainy Day Fund
57.25 m TOTAL 171.75 m Surplus /
Non-recurring Revenue can be used for Deposits
into the Rainy Day Fund (25) Debt Defeasance
Payments to the UAL (Unfunded Accrued Liability)
and Capital Outlay.
92
FY02 Supplemental Appropriations Bill
Executive Office (0.5 million) Reduce
appropriation for the re-engineering of DHH
because project will not start this Year. Divisio
n of Administration 2.5 million
Reimbursement for the portion of the Endowed
Chairs funding that was seeded by the
DOA. Division of Administration 0.04 million
Settlement of a lawsuit in 19th JDC involving a
tax sale of property in Aug. 91. Military
Department 9.3 million Match request from
the Office of Emergency Preparedness for federal
funds from FEMA approved for damages from
Tropical Storm Allison.
93
FY02 Supplemental Appropriations Bill
Military Department 1.1 million Funding for
enhanced security measures for Louisianas
military installations as part of Homeland
Defense. Womens Services 0.1 million
Maximum funding needed for the termination pay of
those employees in positions being eliminated
(42). Office of Business Development (5
million) Eliminate funding for Lafayette
Economic Development Authority. CRT/Office of
the Secretary 2.4 million Funding for
activities associated with the Louisiana Purchase
Bicentennial.
94
FY02 Supplemental Appropriations Bill
Corrections Sheriffs Housing 7.2 million
Funding for an additional 880 state inmates
housed in parish jails. State Police 4.6
million Funding for 32 troopers, 29 Dept. of
Public Safety security positions, 7 civilians,
equipment and overtime as part of Homeland
Defense. State Police 2.7 million Covers
shortage in revenue to the Riverboat Gaming
Fund. Gaming Control Board 0.02 million
Judgment of State of Louisiana First Circuit
Court of Appeal against the Louisiana Riverboat
Gaming Commission. Pursuant to La. R.S. 2731 B,
all obligations of the former Riverboat Gaming
Commission were transferred to the Gaming Control
Board.
95
FY02 Supplemental Appropriations Bill
Medical Vendor Payments 55.6 million
Utilization of FY02 excess revenue to be
deposited to the La. Medical Assistance Trust
Fund. Office of Public Health (0.3 million)
Decreases State General Fund and increases
Statutory Dedications (La. Fund) to maximize
available Tobacco Funds for smoking prevention
and cessation grants and school-based health
centers. Firefighters Retirement System 3.2
million One-third of the estimated 9.5 million
additional funding for the system required for
FY03.
96
FY02 Supplemental Appropriations Bill
La. School for the Visually Impaired 0.3
million Judgment ordered for payment of back
wages and related benefits as a result of
violation of tenure law. OSFA 0.8 million
Funding for the estimated deficit in TOPS from
the TOPS Fund (Statutory Dedications). Subgrantee
Assistance 1.6 million PIPs program
shortfall projection for FY02. Subgrantee
Assistance 3.8 million One-third of the
11.2 million needed to compensate the 16 local
school districts that were impacted by one-time
reductions in the MFP in FY02.
97
FY02 Supplemental Appropriations Bill
LSU HCSD (3.5 million) Means of Financing
substitution decreasing General Fund and
increasing Statutory Dedications (La. Fund) to
maximize available Tobacco Funds for FY02. Other
Requirements 0.04 million Funding for
reimbursement of Federal participation in the
Administrative Services and Administrative
Support Ancillary agencies. Other Requirements
0.4 million Addresses anticipated shortfall of
revenue from slot machines at racetracks needed
for debt service for the Boll Weevil Eradication
Program.
TOTAL Supplemental Appropriations Bill 89.7 m.
98
KBC2002