Bobby Jindal
Governor
Angele Davis
Commissioner of Administration
Executive Budget
Fiscal Year 2010-2011
Joint Legislative Committee on the Budget
February 19, 2010
Bobby Jindal
Governor
Introduction: Education and Health Care
• The FY 11 Executive Budget Protects Dollars to the
Classroom for Higher Education and K-12 Education
• The FY 11 Executive Budget Utilizes Surplus and
Amnesty to Mitigate Reductions to Health Care
FY 11 Executive Budget Overview
• Revenue Levels Normalizing After Post-Katrina Highs
• Protecting the Economy, Returning to Sustainable
Levels of Spending
• Streamlining Government, Improving Outcomes
COMPARISON: FY 09-10 Budgeted to FY 10-11 Executive Budget
(Totals Including Additional Funding Related to Hurricane Disaster Recovery)
(Exclusive of Contingencies) (Exclusive of Double Counts)
As of 12/01/09
Budgeted
2009-2010
Executive
Budget
2010-2011
Executive
Budget
Over/(Under)
Budgeted
Percent of
Change
GENERAL FUND, DIRECT
$9,046.0
$8,025.1
($1,020.9)
-11.29%
GENERAL FUND BY:
FEES & SELF-GENERATED REVENUES
$1,527.7
$1,616.5
$88.8
5.81%
Less: LSU Health Care Services HCSD
$.0
($82.0)
($82.0)
0.00%
Adjusted Fees and Self-Generated Revenues
$1,527.7
$1,534.5
$6.8
0.44%
STATUTORY DEDICATIONS
$3,948.9
$3,586.6
($362.4)
-9.18%
INTERIM EMERGENCY BOARD
$2.0
($.0)
($2.1)
-102.00%
TOTAL STATE FUNDS
$14,524.7
$13,228.1
($1,296.6)
-8.93%
Less: LSU Health Care Services HCSD
$.0
($82.0)
($82.0)
0.00%
Adjusted Total State Funds
$14,524.7
$13,146.1
($1,378.6)
-9.49%
FEDERAL FUNDS
$15,180.2
$10,998.9
($4,181.3)
-27.54%
Less: LSU Health Care Services HCSD
$.0
($79.4)
($79.4)
0.00%
Adjusted Federal Funds
$15,180.2
$10,919.5
($4,260.7)
-28.07%
GRAND TOTAL
$29,704.9
$24,227.0
($5,477.9)
-18.44%
Less: LSU Health Care Services HCSD
$.0
($161.4)
($161.4)
-0.00%
Adjusted Grand Total
$29,704.9
$24,065.6
($5,693.3)
-18.98%
GRAND TOTAL POSITIONS
43,871
82,269
38,398
87.52%
Less: Higher Education (34,159) and LSU Health Care
Services HCSD (7,215)
0
(41,374)
(41,374)
0.00%
Adjusted Grand Total
43,871
40,895
(2,976)
-6.78%
Note: Positions are authorized, not filled positions. Dollar amounts are represented in millions.
FY11 Net Adjustments in Authorized Positions
Executive
118 Youth Development Services
-76
Veterans Affairs
3 Health & Hospitals
-1,944
State
-2
Social Services
-533
Justice
-4
Natural Resources
-128
Lt. Governor
-3
Revenue
-1
Treasury
-2
Environmental Quality
-77
Public Service
-6
Workforce Commission
291
Agriculture & Forestry
-25
Wildlife & Fisheries
-8
Insurance
-7
Civil Service
0
Economic Development
-3
Higher Education
8
Culture, Recreation & Tourism
-68
Other Education
-25
DOTD
-179
Dept. of Education
-48
Corrections
-224
Ancillary
-42
Public Safety
9
TOTAL
-2,976
Position Eliminations to Date
• Following prior reductions of 3,326 fulltime
appropriated positions through budgetary actions in
FY 09 and FY 10, approval of the 2,976 position
reduction for FY 11 would mean a total of 6,302
fulltime appropriated positions reduced since the
beginning of the Jindal administration, with savings
of more than $378 million.
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Normalizing Revenues, Historical Trends
State General Fund Revenue
14.0
12.0
State General Fund
pre‐Katrina Trend
10.0
8.0
6.0
4.0
2.0
0.0
Returning to Sustainable Spending Levels
5-Year Budget Outlook
$12,000,000,000
9.9
10.1
10.4
$10,000,000,000
8.9
1.8
1.7
8.0
1.7
$8,000,000,000
$6,000,000,000
$4,000,000,000
$2,000,000,000
8.9
8.0
8.2
8.4
8.6
$0
FY10
FY11
FY12
FY13
FY14
Improving Outcomes
• What outcomes matter most to our citizens?
• How much should we spend to achieve each outcome?
• How best can we deliver the outcome to get the
results citizens expect?
Proposed FY11 Total Funding by Outcome Goal Areas
Fiscal Year 2010-2011 Executive Budget Total Expenditures by Outcome Goal Areas
(Totals $24,226,973,386
)
Transparent, Accountable,
and Effective Government
3.5%
Judicial, Legislative, & Capital
Outlay
1.8%
Natural Resources
2.5%
Education
29.9%
Health
31.2%
Economic
Growth
1.9%
Transportation
5.6%
Hurricane Protection &
Emergency Preparedness
13.9%
Social
Services
3.9%
Public Safety
5.9%
Education $7,250,473,273
Economic Growth $468,316,239
Hurricane Protection & Emergency Preparedness $3,365,656,830
Public Safety $1,434,414,643
Social Services $935,129,364
Transportation $1,350,445,644
Proposed FY11 General Fund by Outcome Goal Areas
Fiscal Year 2010-2011 Executive Budget State
General Fund Expenditures by Outcome Goal Areas
(Totals $8,025,050,000)
Transparent, Accountable, and
Effective Government
4.2%
Judicial, Legislative, & Capital
Outlay
2.6%
Health
22.4%
Transportation $0
0.0%
Education
54.9%
Social
Services
2.3%
Public Safety
12.0%
Hurricane Protection &
Emergency Preparedness
0.8%
Economic
Growth
0.4%
Education $4,404,633,339
Economic Growth $33,540,077
Hurricane Protection & Emergency Preparedness $60,891,744
Public Safety $960,419,771
Social Services $187,674,987
Transportation $0
Health $1,796,217,884
Natural Resources $32,556,060
Natural Resources
0.4%
Strategic Initiatives: The Louisiana Way Forward
Job Creation
• $15 million in Statutory Dedications for the Rapid Response
Fund to secure economic development opportunities
• $4.4 million in Statutory Dedications for the Fast Start
Program, which delivers comprehensive “turnkey” employee
training for relocating or expanding businesses
• $3 million in Statutory Dedications for the Small Business
Surety Bond Program
• $1.3 million in Statutory Dedications for Life Science
Incubators (Wet Labs) in Baton Rouge, New Orleans, and
Shreveport
Strategic Initiatives: The Louisiana Way Forward
Job Creation
• $1 million in Statutory Dedications for Small Business Development
Centers
• $800,000 in Statutory Dedications for Small and Emerging Business
Development
• $450,000 in Statutory Dedications for Project Specific Site
Preparation and Evaluation
• $400,000 in Statutory Dedications for Louisiana Business Incubation
Support
Most importantly, the FY 11 budget preserves the $55 million fund
balance in Louisiana’s Mega-Project Development Fund as a critical
tool for job creation and expanding our economy.
Streamlining Government, Improving Outcomes
Reorganizing, Modernizing the Department of Social Services
• A streamlined structure will be proposed to the Legislature
that focuses on DSS’ core competencies and prioritizes
services in the field. The Office of Community Services and
the Office of Family Support will be merged under one
umbrella: the Office of Family and Child Services.
• A major functional change for DSS is the plan to transfer
programs under Louisiana Rehabilitation Services, or LRS,
and house them under the Louisiana Workforce Commission
and the Department of Health and Hospitals.
Streamlining Government, Improving Outcomes
Reorganizing, Modernizing the Department of Social Services
• The new framework will transfer those programs to the
agency that fits with its core competency. For example,
those programs, such as Vocational Rehabilitation, that help
clients find employ-ment and develop a career will move to
the Louisiana Workforce Commission, while other programs
such as the Traumatic Head and Spinal Cord Injury Trust
Fund will move to DHH.
Streamlining Government, Improving Outcomes
Reorganizing, Modernizing the Department of Social Services
• DSS modernization plans include the development and
implementation of a Customer Service Call Center,
Electronic Case Record, Client Web portal, Provider Web
portal and Worker portal wrapped around existing legacy
systems.
• Business re-engineering will reduce redundancy, errors,
improve quality assurance, and streamline work processes.
Streamlining Government, Improving Outcomes
Creating the Office of Coastal Protection and Restoration
• The Office of Coastal Protection and Restoration fundamentally restructures the
state’s coastal program, integrating staff at the Department of Natural Resources
that were handling coastal restoration work with those employees at the
Department of Transportation and Development who were working to build and
maintain hurricane and storm surge protection structures.
• The office will continue integration of the state's coastal efforts by limiting the
number of staff hired and utilizing existing staff at other agencies to handle human
resources, finances and budgets, information technology and legal assistance.
• State coastal restoration and protection officials estimate approximately $30
million in funds dedicated specifically to coastal restoration and hurricane
protection will be saved over a five year period by utilizing personnel already
working at other agencies and also working cooperatively with state colleges and
universities to conduct research and gather data pertaining to restoration and
protection efforts.
Streamlining Government, Improving Outcomes
Increasing Transparency and Accountability in Contracts
• In November, the Division of Administration launched an Online Contracts
Feature on LaTrac, the state's Transparency and Accountability Portal and
Online State Spending Database, which may be accessed through the main
LaTrac website at
www.latrac.la.gov
or directly at
www.latrac.la.gov/contracts
.
• Information about professional services contracts included in the
Executive Budget may also be found in the Executive Budget Supporting
Document, which may be accessed through the Office of Planning and
Budget website at
http://www.doa.louisiana.gov/opb/pub/ebsd.htm
.
Streamlining Government, Improving Outcomes
¾
Examples in FY11 Executive Budget
• The Department of Transportation and Development will eliminate its
photogrammetry airplane at a savings of $292,000, and eliminate the
Melville ferry, which has low ridership and a high cost-per-ridership, at a
savings of $213,039.
• Currently, training for state government employees is split between the
Comprehensive Public Training Program (CPTP) in the Division of
Administration, which teaches advanced level classes, and Civil Service
teaching the introductory classes. Transferring CPTP to Civil Service will
allow for a more integrated training program, along with providing online
training, bringing greater efficiency. This increased efficiency and
coordination yields a 20 percent savings. Louisiana spends $1,080 per
employee on annual training. That is the highest among 23 states
reporting, according to the 2008 Pew Center report, “Grading State
Government.”
Streamlining Government, Improving Outcomes
¾
Examples in FY11 Executive Budget
• As it is done in most other states, partnering with private physicians at
Louisiana’s Veterans homes will bring $1,089,749 in savings.
• The Forcht-Wade Correctional Center (FWCC) in Keithville is being
converted into a substance abuse treatment facility. Substance abuse is
an underlying cause in the majority of the crimes that offenders have
committed. The conversion of FWCC to a substance abuse treatment
center will serve a vital role in the Department’s efforts to reduce
recidivism and to successfully reintegrate offenders into
society. Furthermore, the Department will realize an annualized savings
of $1.7 Million by converting FWCC into a substance abuse treatment
facility and consolidating the skilled nursing units and the reception and
diagnostic programs at Elayn Hunt Correctional Center (EHCC).
Streamlining Government, Improving Outcomes
¾
Examples in FY11 Executive Budget
• Pharmacy Services will be privatized at all state correctional facilities,
resulting in savings of approximately $800,000. Administrative Services at
all state correctional facilities and units will be consolidated on a regional
basis, saving $1 million. In addition, video technology will be used to
provide for monitoring of offenders from a central location, saving $1.2
million.
• The Department of Public Safety will eliminate the Oil Spill Coordinator’s
Outreach Program, at a savings of $112,000.
• Louisiana Economic Development eliminated its Workforce Development
and Training Programs, saving $2.5 million in traditional, less-effective
work force grants, and has shifted all workforce development funding to
Louisiana FastStart, a new comprehensive job recruiting, screening and
training program. In FY 11, because of FastStart, Entertainment training
will also be eliminated, for a savings of $1.5 million.
Streamlining Government, Improving Outcomes
¾
Examples in FY11 Executive Budget
• At the Department of Environmental Quality, the Office of Environmental
Assessment and its activities have been consolidated into the Office of
Environmental Compliance and the Office of Environmental
Services. Outsourcing the DEQ Laboratory Services Division yields a net
savings of $1.3 million.
• A system of care is being coordinated between the Department of Social
Services, Department of Health and Hospitals and the Office of Juvenile
Justice for youth mental health services that are reimbursable through
Medicaid, thus leveraging Medicaid dollars and providing a $1.1 million
savings in State General Fund.
• The Department of Wildlife and Fisheries is eliminating its publication
Louisiana Conservationist
, at a savings of $220,000.
Streamlining Government, Improving Outcomes
¾
Examples in FY11 Executive Budget
• To increase transparency and accountability in the budgeting process, all
institutions of higher education and LSU’s Health Care Services Division
(HCSD) will be required to bring their non-T.O. FTE positions “on-budget”
as Table of Organization, in the same manner followed by the other
executive branch agencies.
• Medicaid will be transitioned to an integrated delivery system with care
coordination that will eventually yield a $45 million savings.
Protecting Dollars to the Classroom, Pursuing Reforms
MFP Funding
• While other departments and programs saw FY 10 midyear budget
reductions, the Minimum Foundation Program (MFP), which provides
funding for local school districts, received an increase of $52.6 million.
• For FY 11, the funding level for MFP is protected, with total funding
recommended at $3,308,741,821.
FY 05
FY 11
Total State Funding
$2,624,561,103 $3,308,741,821
Total Funding Per Pupil
$3,696
$5,035
Student Count
710,079
657,169
Protecting Dollars to the Classroom, Pursuing Reforms
K-12 Strategic Initiatives
• $36.8 million in total funding, including $8.6 million in general fund, for
the LA Literacy and Numeracy initiative
• $7 million in total funding, including $4.4 million in general fund, for the
High School Redesign Program
• $17 million in total funding, including $2 million in general fund, for
Career Technical Education
• $11.95 million in TANF funds for the Jobs for America’s Graduates
program and for Educational Mission to Employ Louisiana’s Youth
(EMPLoY), an effective drop-out prevention initiative
• $8 million in Statutory Dedication funding to continue Student
Scholarships
• $75.9 million in total funding, including $15.4 million in general fund and
$60.5 million in TANF for the Cecil J. Picard LA 4 Pre-K Program.
Protecting Dollars to the Classroom, Pursuing Reforms
Higher Education
• FY 11 Executive Budget proposes no reduction in state funding to Higher
Education schools in FY 11, but does non-recur one-time special legislative
projects and reduces $5.2 million (27.3 percent) for higher education
management boards, similar to a motion initially adopted by PERC.
• FY 11 Executive Budget provides $4.7 million in additional funds to fully
fund Taylor Opportunity Program for Students (TOPS), with a total funding
of $134.6 million.
• $26.4 million in State General Fund for Go Grants is unchanged after the
FY 10 midyear adjustments, as Federal funding for Pell Grants is expected
to increase.
• $289.6 of ARRA funding for State Fiscal Stabilization Fund – Education
Grant.
Protecting Dollars to the Classroom, Pursuing Reforms
Higher Education Statistics
• According to the Chronicle of Higher Education, in Louisiana “state appropriations
for higher education doubled between the 1999 and 2009 fiscal years, the third
greatest increase among the states for that time period.”
• According to the Southern Regional Education Board (SREB), Louisiana’s six-year
graduation rate is 37 percent compared to 53 percent for all SREB states.
• Also according to SREB, in Louisiana 72 percent of students are enrolled in four-
year institutions and 28 percent in two-year schools, compared to averages in other
SREB states of 55 percent in four-year schools and 45 percent in two-year schools.
• According to the Delta Project on Postsecondary Education Costs, Productivity, and
Accountability, “Louisiana pays as much as $5,200 per year for each student in a
public research university, more than triple what it provides for a student in a two-
year college.”
• According to Illinois State University’s Center for the Study of Education Policy (the
Grapevine report), in FY 09 Louisiana ranked 8
th
in the nation for appropriations of
state tax funds for operating expenses of Higher Education per $1,000 in personal
income, and ranked 7
th
in the nation in Higher Education appropriations per capita.
Mitigating Reductions in Health Care
• The expected reduction of Louisiana’s base Federal Medical Assistance
Percentage (FMAP) due to the flawed federal formula, the
Disproportionate Share Hospital (DSH) Audit Rule, loss of both Social
Service Block Grant and Primary Care Access and Stabilization Grant
dollars, and the scheduled expiration of the enhanced FMAP in December
2010 combine to a loss of $663.3 million of federal funding.
• In response, the FY 11 budget utilizes $233.7 million in collections from
the Louisiana Tax Amnesty Act of 2009, as well as $76 million of State
General Fund surplus, to defease debt in FY 10, thereby reducing State
Debt Service by $309.7 million in FY 11. The funds made available from
this reduction, in turn, are budgeted in FY 11 for the Department of
Health and Hospitals.
• Total DHH funding for FY 11 is $7.73 billion, including proposed state
general fund expenditures of $1.684 billion. The total impact of the
$309.7 million contingent upon utilizing amnesty and surplus funding to
defease debt is $1.1 billion, including federal match.
Mitigating Reductions in Health Care
DSH Audit Rule: LSU, Mental Health, Rural Hospitals
• The total loss of allowable DSH is $198.5 million. Of this loss in total funds, the
state projects: $135.6 million will be attributed to LSU; $42.9 million will be
attributed to the DHH mental health institutions; $20 million will be attributed to
the rural hospitals.
• LSU: The budget proposes to replace the lost DSH funds with $122.5 million in SGF
and $13.1 million in federal funds due through cost reports.
• Mental Health: The budget proposes to replace $30.9 million of the lost dollars with
state sources of funding in the Office of Mental Health.
• Rural Hospitals: The budget recommendation includes $11 million SGF to offset the
loss of $20 million in allowable cost. In addition, the Department will be filing a
bill that will authorize an increase in rural hospital reimbursement under Medicaid
up to the Medicare reimbursement levels. This will allow the state to match some
of the $11 million, which will help offset the loss of DSH. It is expected that as
much as $7 million of the funds will be matched by federal funds, while up to $4
million will be direct grants to hospitals – thus fully offsetting the loss of DSH.
Health Care Reform Initiatives
Transforming Medicaid: Improving quality and access for one-quarter of
Louisiana’s residents
The budget directs the Department to implement reforms passed by the
Legislature. A phase-in will begin early in 2011, leading to modest savings of $15
million in FY2010-2011, with substantially higher savings expected in FY 2012.
Among other things, the features of a reformed Medicaid will include:
• Market-based competitive rates for certain specialties
• Choice for consumers, with choice counseling available
• Management of chronic disease to ensure reduced hospitalization and improved
quality of life
• Accountability for outcomes of the populations served by Coordinated Care
Networks – the state will select quality measures that correlate with improved
health outcomes. These measures will be published on
www.healthfinderla.gov
to bring transparency and accountability to the system.
• Aggressive fraud and abuse detection by the CCNs and the state
Health Care Reform Initiatives
•
Local Governing Entities
. The Department will launch the South Central Louisiana
Human Services (SCLHAS) Authority, a local government entity operated by a local
board of directors in Region 3 of the state. $24.8 million will be transferred from
the Offices of Addictive Disorders, Citizens with Developmental Disabilities and
Mental Health to the SCLHSA, and 123 positions will be converted to non-
appropriated positions as a part of the transfer of funding.
•
OLOL/LSU
. The DHH budget includes $14.3 million in non-recurring funds to be
used as part of a new partnership with Our Lady of the Lake Regional Medical
Center and Louisiana State University. This new partnership will result in expanded
access to primary and urgent care services for the poor, a new Level-1 Trauma
Center for the region, and enhanced medical training opportunities for medical
students, residents and those training for professions in the allied health field. The
partnership will result in new physical patient care capacity as well as physical
space for enhanced academic capacity for LSU. Finally, the partnership will save
the state as much as $400 million in capital expenditures, which will not need to be
expended to replace Earl K. Long Medical Center.
Health Care Reform Initiatives
•
Providing Independence and Integration for Persons with Developmental
Disabilities
. The Department is seeking to increase its partnerships with private
group homes for persons with developmental disabilities rather than operate state-
run group homes. Today, more than 93 percent of residents of community homes
are served by a private provider, at a cost nearly $60,000 per individual less than
the cost of state-operated group homes. Approximately 150 individuals will be
affected by this initiative. As a result of the annualization of this initiative, the
Department has proposed adding $3.8 million to the budget to serve an additional
150 persons now on the waiting list for services in the New Opportunities Waiver
(NOW) program.
•
Privatization of Services in the Office for Addictive Disorders.
The state operates
or contracts with the private sector for 582 inpatient treatment beds for individuals
with addictive disorders. The Office for Addictive Disorders will privatize the
remaining 257 state-run beds at six facilities throughout the state, resulting in a
savings of $2.5 million in SGF.
Budget Information Online
Budget and Supporting Document
www.doa.louisiana.gov/opb/pub/ebsd.htm
Online State Spending Database
www.latrac.la.gov
