Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis

1. Louisiana at the Crossroads Responses to Louisiana’s Financial Crisis Louisiana Association of Nonprofit Organizations Public Policy Institute April 6, 2011 WWW.LABUDGET.ORG

2. FY2012 Budget Highlights • 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

3. Employee Reductions 11% reduction since FY2008

4. Department of Social Services 44% reduction since FY2008

5. LSU Health Care Services 32% reduction since FY2008

6. Higher Education 30% reduction since FY2009

7. Department of Education Level funding for 3 years

8. Youth Services 20% reduction since FY2008

9. State General FundProjected Budget Deficits FY2012-14(millions)

10. Deficit as Percent of Total Budget $1.6 billion ÷ $25.5 billion = 6% FY12 Projected Shortfall Total FY11 Budget Percent of total FY11 budget to be cut over 3 years

12. Deficit as Percent of State General Fund Spending $1.6 billion ÷ $7.7 billion = 21% FY12 Projected Shortfall FY11 State General Fund Percent of FY11 state general fund to be cut in FY12

14. Deficit as Percent of Discretionary Spending $1.6 billion ÷ $2.6 billion = 62% FY12 Projected Shortfall FY11 Discretionary Funds Percent of FY11 discretionary fund to be cut in FY12

16. Increases Since Pre-KatrinaFY05-FY10

17. Spending Reverts to Pre-Katrina Levels (in 2009 dollars)

18. Fiscal Effect of Stelly Repeals

19. Louisiana Needs Better Choices

20. A Better ChoiceReview Tax Exemption Budget 441 tax exemptions Current cost: $7.1 billion

21. FY 2011 Budget Projections • State general fund revenues: $7.7 billion • Cost of tax exemptions: $7.1 billion • Tax code spending equals 92%of SGF revenues

22. From the list of 441…

23. Tax Collections vs. Exemptions

24. Exemptions can be good or bad . . . 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 . . . but all tax expenditures should be honestly and fairly reviewed

25. A Better ChoiceMake Tax Exemption Budget More Transparent • 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%

26. A Better ChoiceReview Louisiana’s Tax Structure for Fairness

27. State & Local Taxes in 2007

28. LSU Public Policy Research Lab2011 Louisiana SurveyKirby Goidel, Director

29. LSU Public Policy Research Lab

30. LSU Public Policy Research Lab

31. LSU Public Policy Research Lab

32. LSU Public Policy Research Lab

33. LSU Public Policy Research Lab

34. LSU Public Policy Research Lab

35. LSU Public Policy Research Lab

36. Better Choices ARE possible “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 Tucker Baton Rouge Advocate February 2, 2011

37. The budget is “devastating” Suspending tax exemptions is “something we should debate” Senate President Joel Chaisson Baton Rouge Business Report September 24, 2010

38. Join Better Choices for a Better Louisiana TODAY!www.BetterChoicesLa.org We need Better Choices - NOW!