Louisiana Legislators Get First Look at Curtailed 2010 Budget

DALLAS - Louisiana Gov. Bobby Jindal has proposed an executive budget for fiscal 2010 totaling $26.72 billion that uses federal stimulus dollars to help make up for a $1.3 billion decline in revenue.

The budget, which was unveiled Friday by Commissioner of Administration Angèle Davis to the Joint Legislative Committee on the Budget, is some 10% less than the $29.6 billion budget in fiscal 2009.

The Legislature will begin consideration of the fiscal 2010 budget when it convenes April 27.

The total budget for fiscal 2010 includes a general fund of $8.1 billion that is down $1.4 billion, or 14.7%, from $9.48 billion in fiscal 2009. Total state funding is $12.8 billion, down $1.9 billion, or 12.7%, from $14.7 billion last year.

The budget includes $13.9 billion in federal funds, down from $14.9 billion of federal funding in fiscal 2009.

Davis said Louisiana is eligible to receive a total of $3.6 billion of federal stimulus funds over the next two years, with $943 million being allocated in the fiscal 2010 budget. The budget uses $666 million of the stimulus money for general fund spending.

"To prepare strategically for future years, it would be irresponsible to utilize all the federal budget stabilization funds in one fiscal year," Davis said. " Instead, the fiscally prudent use of these dollars is to spread them over a two-year period, as the federal government will not allow the funds to be spent after these two years."

The stimulus funds included in the fiscal 2010 budget include $327.1 million for the state's Medicaid program for the poor, $218.7 million for higher education, $64.5 million of flexible grants, and $37.5 million for public education.

Louisiana will also receive $430 million of transportation stimulus funds, but those dollars are not included in the budget because they will be appropriated through the capital outlay process.

Davis stressed that the federal assistance is temporary and will not be used to hire permanent employees or to fund permanent programs.

"Federal stimulus funds are not a silver bullet for our budget challenges," she said. "While utilizing some of this temporary federal funding, the executive budget proposal includes many significant reductions in targeted areas that will help the state live within its means, especially as we prepare for additional reductions in future years."

Davis said the latest estimate of state revenues predicts shortfalls of $420 million in fiscal 2011 and $1.4 billion in fiscal 2012.

The state has benefited from strong revenues over the past few years due to recovery from the hurricanes of 2005 and high oil and gas prices, Davis said, but that era is coming to an end.

"Clearly we must transition away from the use of the stimulus dollars and plan ahead to move to bring state government to a more sustainable size," she said. "The sizeable boost that Louisiana's economy received from insurance funds, federal recovery dollars, and private recovery efforts is declining, and we must transition to a more normal level."

The budget calls for reducing state government by 1,421 full-time authorized positions. Davis said that with the reduction, the Jindal administration has eliminated a total of 3,411 full-time positions since it came into office in January 2008.

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