better choices for a better louisiana responsible responses to louisiana’s financial crisis 1
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Better Choices for a Better LouisianaResponsible Responses to Louisiana’s Financial Crisis
WWW.LABUDGET.ORG1
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$1.6 billion ÷ $25.5 billion = 6%
Percent of Total Budget
FY12 Projected Shortfall Total FY11 Budget
Percent of total FY11 budget to
be cut over 3 years
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$1.6 billion ÷ $7.7 billion = 21%
Percent of State General Fund Spending
FY12 Projected Shortfall FY11 State General Fund
Percent of FY11 state general fund to be cut in FY12
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$1.6 billion ÷ $2.6 billion = 62%
Percent of Discretionary Spending
FY12 Projected Shortfall
Percent of FY11 discretionary fund to
be cut in FY12
FY11 Discretionary Funds
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Spending Reverts to Pre-Katrina Levels (in 2009 dollars)
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FY05 FY06 FY07 FY08 FY09 FY10 FY11 $-
$5,000,000,000
$10,000,000,000
$15,000,000,000
$20,000,000,000
$25,000,000,000
$30,000,000,000
$35,000,000,000
Total State BudgetTotal State Budget Less Hurricane Disaster Recovery FundingState General Fund
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Increases Since Pre-KatrinaFY05-FY10
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Community & Technical Colleges
Food Stamps
LACHIP
Medicaid
State General Fund Revenue
0% 10% 20% 30% 40%
37%
20%
16%
13%
2%
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(in millions) FY08 FY09 FY10 FY11 FY12 5-Year Total
Excess Itemized Deductions $152 $250 $255 $260 $265 $1,182
Bracket Changes N/A N/A $359 $251 $262 $872
Total Cost $152 $250 $614 $511 $527 $2,054Source:Department of Revenue for Excess Itemized Deductions, except FY12, which is LBP estimateLegislative Fiscal Office for Bracket Changes
Fiscal Effect of Stelly Repeals
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$7.1 BILLION
5-Year Tax Exemption Budget
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State general fund revenues: $7.7 billion
Cost of tax exemptions: $7.1 billion
Tax code spending equals 92% of SGF revenues
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FY 2011 Budget Projections
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Insurance Premium Tax Credit
Motion Picture Investor Credit
Income shifting by multistate corporations
Paying companies to send their sales taxes on time
Enterprise zone credit
Horizontal drilling exemption
Examples of What Louisiana’s Tax Policies Cost
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$195 million
$119 million
$32 million
$34 million
$23 million
$15 million
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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%
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Tax Exemption Budget Needs More Transparency
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The budget is “devastating” Suspending tax exemptions is “something we should debate”
Senate President Joel ChaissonBaton Rouge Business Report
September 24, 2010
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WWW.LABUDGET.ORG
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