Bobby Jindal
Governor
Angele Davis
Commissioner of Administration
Credit Rating Agency Presentation
September 23, 2009
September 23, 2009
Angele Davis
Commissioner of Administration
6/12/2008
Overview
• Louisiana’s Economic Strengths
• General Fund Budget Data
• Hurricane Recovery Update
• Proactive Fiscal Reforms
2
1
6/12/2008
Credit Rating Agency Presentation
Angele Davis
Commissioner of Administration
Louisiana s Economic Strengths
6/12/2008
Louisiana’s Economic
Strengths
Strengths
LOUISIANA’S EMPLOYMENT* LEVELS HAVE OUTPACED THE
REST OF THE COUNTRY
REST OF THE COUNTRY
Total nonfarm, seasonally-adjusted employment* (100=January 2008)
Louisiana
South**
United States
2008
2009
* July 2009 figures are preliminary
** Based on aggregate of SREB states (Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Maryland,
Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia)
Source: BLS; LED analysis
4
2
Louisiana’s Economic
LOUISIANA’S EMPLOYMENT* LEVELS HAVE OUTPACED THE
6/12/2008
LOUISIANA’S UNEMPLOYMENT RATE HAS REMAINED BELOW THAT OF
THE U.S. AND SOUTH SINCE THE START OF THE NATIONAL RECESSION
THE U.S. AND SOUTH SINCE THE START OF THE NATIONAL RECESSION
Unemployment Rate*
United States
South**
Louisiana
2008
2009
* Seasonally adjusted; July 2009 figures are preliminary
** Based on weighted average of SREB states (Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky,
Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia)
Source: BLS; LED analysis
5
6/12/2008
Louisiana Wages
Storms
6
3
LOUISIANA’S UNEMPLOYMENT RATE HAS REMAINED BELOW THAT OF
6/12/2008
Louisiana Wages
6/12/2008
State Domestic Product (nominal)
250000
200000
150000
100000
50000
0
Source: BEA
2000 2001 2002 2003 2004 2005 2006 2007 2008
6/12/2008
Louisiana Employment (non-agricultural)
agricultural)
1,950
1,925
Storms
1,900
1,875
1,850
1,825
1,800
8
4
100000
Louisiana Employment (non
1850
6/12/2008
Median Existing Home Price
National Association of Realtors
$250
United States
Louisiana
$225
$200
$175
$150
$125
Storms
$100
$75
9
Louisiana Named Southern Economic Development
“Co
“Co-State of the Year” for 2009
State of the Year” for 2009
• Along with Tennessee, beat out 15 other states in the South in the annual
Southern Business & Development
magazine’s rankings
• New Orleans was named Major Market of the Year after receiving
Honorable Mention in 2007 and 2008
• Baton Rouge Mid-Market of the Year for 2009 following up its Honorable
Mention ranking in 2008
• Terrebonne Parish recognized for landing projects that will have a positive
impact on the local economy
impact on the local economy
• “Over the last three years no state in the South has performed better than
Louisiana.” –
SB&D
• “Louisiana has come a long way since the mid-1990s. Back then, we
remember a couple of years when the biggest job deals were new Wal-Mart
stores…Those days are gone, replaced by a Louisiana economy that is as
vibrant as any in the South.” –
SB&D
10
5
Median Existing Home Price
$125
6/12/2008
Louisiana Named Southern Economic Development
Louisiana Economic Outlook Ranked
118
tth
Out of 50 States
• American Legislative Exchange Council study, released in August,
ranked Louisiana's economic outlook 18
th
out of 50 states — up
from 21
st
in the same study’s prior year’s assessment
• Ranked Louisiana in the top ten in the nation for Property Tax
Burden” rates and “Number of Tax or Expenditure Limits”
• Ranked Louisiana 11
th
for “Top Marginal Personal Income Tax Rate”
and 12
th
in the category of “Top Marginal Corporate Income Tax
Rate.”
11
Louisiana Ranked #1 in Nation in Index
of State Economic Momentum
of State Economic Momentum
• The Index of State Economic Momentum, developed by
State Policy Reports
and published by Federal Funds Information for States (FFIS), ranked Louisiana
as the top state in the nation for the second quarter of 2009.
• The Index ranks states based on their most recent performance in three key
measures of economic vitality: personal income growth, employment growth
and population growth.
• Louisiana ranked 5
th
state in the nation in personal income growth between
the first quarter of 2008 and the same period in 2009.
q p
• Louisiana ranked 3
rd
in the nation in employment from June 2008 to June 2009.
• Louisiana ranked 23
rd
in the nation in population growth between July 2007
and December 2008.
• While not a component of the Index, the report also ranked Louisiana 9
th
in the
nation for unemployment rate and 12
th
in the nation in change of house prices.
12
6
6/12/2008
Louisiana Economic Outlook Ranked
Out of 50 States
• Ranked Louisiana number one, or tied for number one, in the
nation for the categories of: "Recently Legislated Tax Changes,"
"Right-to-Work” laws and "Estate/Inheritance Tax Levied"
• Ranked Louisiana in the top ten in the nation for “Property Tax
6/12/2008
Louisiana Ranked #1 in Nation in Index
National and regional rankings have reflected
improvements in business climate
improvements in business climate
•
Ranked #1 in the Center for Public Integrity (CPI) legislative
financial disclosure ranking released in June 2009 (up from
#44 in 2008)
•
Ranked #27 in Pollina Corporate Top 10 Pro-Business States
in June 2009 (up from #40 in 2008)
•
Ranked #7 in terms for growth in high-tech employment by
Tech America’s Cyberstates report in March 2009
13
6/12/2008
Recent Business Development Wins
PROJECT EXAMPLES – NOT COMPREHENSIVE
Capital
investment
($MM)
100 0
Company
Project description
Location
Lake Charles / B R
New
direct jobs
Shaw
Nuclear modular mfg. /
corporate HQ retention
Lake Charles / B.R.
2,900
100.0
Shaw
V-Vehicle Co.
Auto manufacturer
Monroe
1,400
248.0
U.S. Air Force
Global Strike Command
Bossier City
1,000
57.0
LaShip – Edison
Chouest
Shipyard project
Terrebonne Parish
1,000
100.0
SNF Floerger
Petrochemical plant
Iberville Parish
512
350.0
Gardner Denver
Thomas, Inc.
Industrial manufacturing
Monroe
232
--
$4.3 billion in business investment announced in 2008 and 2009
32,529 total new jobs created (11,887 direct jobs and 20,642 indirect jobs)
$4.3 billion in business investment announced in 2008 and 2009
32,529 total new jobs created (11,887 direct jobs and 20,642 indirect jobs)
14
7
6/12/2008
National and regional rankings have reflected
Nuclear modular mfg /
2900
6/12/2008
Near-Term Business Development Prospects
Term Business Development Prospects
Approximately 51 prospects including:
• 8,765 new direct jobs
• 7,287 retained jobs
• $5.4 billion in capital investment
$5.4 billion in capital investment
15
6/12/2008
Targeting High-Growth, Emerging Industries
Growth, Emerging Industries
Description of illustrative project Significance
• The Shaw Group will manufacture modules for • Opportunity for Louisiana to participate in
PROJECT EXAMPLES – NOT COMPREHENSIVE
• The Shaw Group will manufacture modules for
nuclear power plants in Lake Charles
• After manufacturing and assembly, modules will
be shipped to work sites globally
• Opportunity for Louisiana to participate in
global nuclear power renaissance
Nuclear energy
manufacturing
Digital interactive
media
• Electronic Arts (EA) will build a first-of-its-kind
global quality assurance center in Baton Rouge
• Partnership between EA, Louisiana Economic
Development, and Louisiana State University
• Only significant expansion undertaken by EA in
2008
• Opportunity to establish competitive
advantage in rapidly growing market
Advanced
manufacturing
• V-Vehicle announced plans to build a high-
quality, fuel efficient car in Monroe
• Will expand existing facility formerly owned by
• Opportunity to revolutionize the domestic
automobile industry
• Backed by reputable investment team
Guide Corp.
including Kleiner Perkins and T. Boone Pickens
Value-added
agribusiness
• Zagis USA will build two Greenfield textile mills
in Jefferson Davis Parish
• Project will eventually utilize Louisiana
agricultural products
• Opportunity to ship value-added Louisiana
agricultural products vs. raw materials
• Access to export markets and infrastructure
will result in low production costs
Additionally, the State of Louisiana is currently cultivating a
number of major prospects in these segments
number of major prospects in these segments
16
8
Near
Targeting High
Additionally, the State of Louisiana is currently cultivating a
6/12/2008
General Fund Budget Data
6/12/2008
State General Fund Revenue
Pre-storm Trend
forecast
18
9
6/12/2008
Fiscal Year 2008
Ending Cash Balance Surplus of $865.6 Million:
g p
• $231.85 M in state road and bridge projects
• $24 M for port improvements
• $290 M in coastal restoration and hurricane protection
• $98.4 M higher education capital outlay construction
• $85 M to upgrade the Louisiana Superdome during the
pg p g
2010 and 2011 off-seasons (New Orleans will host the
2013 Super Bowl.)
• $10 M for upgrades to the Shriner’s Hospital
• $7.5 M for emergency shelter capacity
19
6/12/2008
Fiscal Year 2009
• Enacted Budget of $9.7 Billion
g
• Mid-year forecast reduced by $341 Million
• Revenues reduced:
o
Corporate: $87 Million
o
Individual income: $42 Million
o
Sales: $135.8 Million
o
Mineral: $124 Million
20
10
Fiscal Year 2008
Fiscal Year 2009
6/12/2008
Fiscal Year 2009
Major Mid-Year Expenditure Reductions
Year Expenditure Reductions
DHH
-$112,590,386
Higher Education
-$51,641,001
DSS
-$20,210,476
Youth Service
-$11,155,145
Department of Education
t f Ed ti
-$11,093,565
Corrections
-$10,472,107
21
6/12/2008
FY 2008/09 Actual Revenue
11
Fiscal Year 2009
Major Mid
Dt
$11 093 565
6/12/2008
FY 2008/09 Actual Collections vs. Forecast
$12,000
Estimate of actual collections 2009
Forecast
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Personal
Income
General
Sales
Sev Tax &
Royalty
Corporate
Income
Total Taxes,
Licenses
and Fees
6/12/2008
Fiscal Year Surpluses
$1.2
$1.1
$1.0
$0.9
$0.8
$0.8
$0.6
$0.4
$0.3
Unknown
$0.2
$0.0
12
$12 000
$4 000
$0 3
Uk
6/12/2008
Fiscal Year 2010
General Fund Budget of $8.059 Billion—
Reduction of $1.276 Billion from prior year
Reduction of $1.276 Billion from prior year
(Revenues in millions)
(Revenues in millions)
Fiscal
Year
2009
Fiscal
Year
2010 Difference
Personal Income
2925.2
2557
-368.2
Sales
2830.2 2613.5
-216.7
Corporate Income
775.5
517.2
-258.3
Mineral
1608.4 1216.1
-392.3
25
6/12/2008
Responsible FY 10 Budget
• First, we preserved the Mega Fund to continue attracting
more economic development wins to our state and create
more jobs for our people.
• Second, we did not raise taxes on our business or our
people, and instead worked to make government live
within its means.
• Third we took a conservative approach in utilizing $86
26
13
Fiscal Year 2010
General Fund Budget of $8.059 Billion
Responsible FY 10 Budget
Third, we took a conservative approach in utilizing $86
Million from the state’s rainy day fund so it is available
to help us meet future budget challenges—especially in
FY 12.
• Fourth, we designated use of stimulus funds over two
years.
6/12/2008
Fiscal Year 2010
(millions)
General Fund
$8,059.900
Carry Forward BA-7s
$33.650
Act 226 Transfer of $13.5m from Rapid Response
Fund
$13.500
Act 226 Transfer of $75.6m from Insure LA Incentive
Program Fund
$75.587
Act 226 Transfer of $3.9m from Incentive Fund
$3.900
Act 122 Transfer of $86.17m from Budget
Stabilization Fund “Rainy Day Fund”
$86.177
Act 478 Tax Credits
($8.000)
Act 20 Use of FY 07-08 Surplus
$782.290
Total Available General Fund
$9,047.004
27
6/12/2008
Stimulus Policy
Federal money at once,
the use of these dollars will be spread over a two
year period.
• Agencies that are impacted by federal stimulus funding in FY10 and/or FY11
must develop transition plans or policy changes to address the loss of federal
funds in FY11 or FY12.
Agencies should not consider budget stimulus
funds as though they are a permanent source of revenue.
• Avoid using stimulus funds to start new programs or hire additional permanent
employees.
•Agencies should closely track all restrictions and any matching provisions that
must come from state funds.
• Agencies must ensure that they follow both federal and state procurement and
contracting laws, and have proper contract monitoring procedures in place.
• Federal Stimulus funds that will be disbursed to sub recipients must be reviewed
by the primary state agency recipient to ensure that the funds are passed
through only to entities that have a demonstrated need and proper internal
controls and reporting procedures in place.
y
y
g p
28
14
Fiscal Year 2010
(millions)
Stabilization Fund Rainy Day Fund
$86 177
Stimulus Policy
• In order to prepare responsibly for future years, instead of utilizing all the
Federal money at once
the use of these dollars will be spread over a two-
g
6/12/2008
Stimulus Funds
FY 10
(millions)
FY 11
(millions)
Federal Medical Assistance Percentage (FMAP)
$541.9
$300.8
State Fiscal Stabilization Fund – Education Grant
- Higher Education
$189.7
$264.0
- MFP
$100.3
$25.5
State Fiscal Stabilization Fund – “Flex” Grant
$64.5
$64.5
Department of Social Services Grants
$55.3
$55.3
$55.3
$55.3
Workforce Development
$30.5
$0
State Energy Program (DNR)
$42.7
$42.8
LA Commission on Law Enforcement Grants
$22.4
$0
Education – Title I
$378.7
$0
Other
$14.5
$3.9
29
6/12/2008
Fiscal Year 2010
General Fund Expenditure Reductions
DHH
-$608,179,741
Higher Education
-$159,063,726
Dept of Education
-$158,788,365
Other Education
-$135,308,321
Corrections
-$39,541,241
CRT
-$36,319,080
Secretary of State
-$35,107,440
DSS
-$31,722,094
30
15
(millions) (millions)
Department of Social Services Grants
Fiscal Year 2010
General Fund Expenditure Reductions
p
$39 541 241
Corrections
6/12/2008
Fiscal Year 2010
Total Means of Finance Changes
% of Total
DHH
-$240,693,773
-2.94%
Economic Development
-$185,587,298 -67.57%
Higher Education
-$56,418,926
-2.01%
Corrections
-$45,495,169
-8.37%
CRT
-$21,591,173 -18.82%
$,
,
Secretary of State
-$16,473,656 -18.13%
Other Ed
$26,356,874
7.71%
DSS
$112,325,547
10.02%
Dept of Ed
$317,226,967
6.23%
31
6/12/2008
Forecast Energy Prices
160
14
140
Oil
12
120
Spot Prices
Natural
Gas
10
100
8
80
60
6
40
4
20
2
0
0
32
Source: REC May 2009 Forecast
16
Fiscal Year 2010
Total Means of Finance Changes
g
Forecast Energy Prices
12/13
12/13
11/12
10/11
11/12
09/10
10/11
08/09
09/10
08/09
07/08
07/08
06/07
06/07
05/06
05/06
04/05
04/05
03/04
03/04
02/03
02/03
01/02
01/02
00/01
00/01
99/00
99/00
98/99
98/99
97/98
97/98
96/97
96/97
95/96
95/96
94/95
94/95
93/94
93/94
92/93
92/93
91/92
91/92
90/91
90/91
89/90
89/90
88/89
88/89
6/12/2008
General Sales Tax
$3.0
$2.8
$2.6
$2.4
$2.2
$2.0
$1.8
$1.6
$1.4
$1.2
$1.0
forecast
35
6/12/2008
Gaming Revenue
$1,000
forecast
$800
$600
$400
$200
$0
Lottery Land Based Casino Riverboat Gaming Racetrack Slots Vide o Poke r
18
General Sales Tax
$
6/12/2008
Severance Tax & Royalties
$2,000
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
forecast
37
6/12/2008
State General Fund from Mineral Revenue
20%
15%
10%
5%
0%
38
19
$800
6/12/2008
Continuation General Fund Budget Outlook
$12,000,000,000
10.5
10.7
9.5
$10,000,000,000
9.2
1.9
8.2
.9
2.0
$8,000,000,000
$6,000,000,000
$4,000,000,000
$2,000,000,000
9.5
8.2
8.2
8.5
8.8
$0
FY09
FY10
FY11
FY12
FY13
ANTICIPATED REVENUES
BUDGET GAP
ANTICIPATED EXPENDITURES
39
6/12/2008
Trust Fund Ending Balances
$4.1
$4.0
$3.6
$3.7
$3.9
$3.1
$3.3
$3.0
$2.0
Full
Full
Full
Full
Full
$1.0
$0.0
FY04
FY05
FY06
FY07
FY08
FY 09
Elderly Rainy Day (9.5% of SGF) Permanent Millennium
20
Continuation General Fund Budget Outlook
$12 000 000 000
Fl
Fl
Fl
6/12/2008
FY 10 Budget Stabilization Fund
(Rainy Day Fund)
Fund Cap as of REC 2/18/09 $ 853,719,306
1/3 Fund Availability $ 284,573,102
Higher Education Funding ( $ 86,177,032)
FY 10 Fund Balance
$767,542,274
41
6/12/2008
Tax Amnesty Program
A t 519 f th 2009 R g l S i t d t
• Act 519 of the 2009 Regular Session created a tax
amnesty program to be administered by the
Department of Revenue
• The amnesty program began September 1 and ends
November 1, 2009
o
First $90 Million collected to be deposited to the
o
First $90 Million collected to be deposited to the
Coastal Protection and Restoration Fund
o
Next $86 Million to replenish the Rainy Day Fund
42
21
FY 10 Budget Stabilization Fund
(Rainy Day Fund)
Tax Amnesty Program
Transportation Infrastructure Backlog
•
In the past 18 months, the state has accepted bids for
construction of $2 billion in road and bridge projects
construction of $2 billion in road and bridge projects.
•
Approximately $1.4 billion from general fund surpluses
dedicated to fund 450 projects: 160 completed, 163 under
way, and 127 projects scheduled for bid.
•
Through surplus funding, DOTD improved 1,096 miles of
roadway earlier than originally programmed.
•
The surplus also funded 36 port and hurricane flood
protection projects.
•
By the end of 2009, the state backlog of road and bridge
needs will be reduced from $14 billion to approximately
$12.5 billion.
43
American Recovery and Reinvestment Act
(ARRA)
(ARRA)
Formula Based Allocation
6/12/2008
Formula Based Allocation
National
Allocation
DOTD
$299 M
Enhancements
$13 M
MPO
$118 M
Highways
$27.5 B
Rural Transit
$15 M
Airports
FAA
$3 B
$ TBD
Transit
$6.9 B
Transit
$48 M
Transit
Formula
$ 750 M
Transit Fixed
$2.4 M
Does not come
through DOTD
through DOTD
22
6/12/2008
Transportation Infrastructure Backlog
American Recovery and Reinvestment Act
Does not come
ARRA Bill
Criteria Included in the Act for Projects
Criteria Included in the Act for Projects
MPO discretionary ($118 M)
(Projects must be approved by the MPO Policy Committee)
• Divided among 10 MPOs by formula
– New Orleans
$ 29.1 million
– Baton Rouge
$ 13.8 million
– Shreveport
$ 7.9 million
– Houma
$ 9.6 million
– Slidell
S
$ 9.6 million
– Monroe
$ 9.6 million
– Alexandria
$ 9.6 million
– Covington
$ 9.6 million
– Lafayette
$ 9.6 million
– Lake Charles
$ 9.6 million
6/12/2008
Expenditure Projections
(millions)
Funding Category
Fiscal
Year
08-09
Fiscal
Year
09-10
Fiscal
Year
10-11
Fiscal
Year
11-12
Fiscal
Year
12-13
Total
State Surplus
$247.6
$328.4
$331.1 $186.9
$26.8 $1,120.8
ARRA
DOTD discretion
$89.9
$110.2
$98.6
$298.7
AARA
DOTD E h
$5.5
$5.5
$1.9
$12.9
DOTD Enhancement
AARA
MPO
t
$17.7
$50.3
$50.3
$118.3
TOTAL
$247.6
$441.5
$497.1 $337.7
$26.8 $1,550.7
23
6/12/2008
ARRA Bill
$
Expenditure Projections
(millions)
6/12/2008
Construction Letting History
$2,000
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$-
FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13
REGULAR PROGRAM TIMED
Hurricane Related
SURPLUS FUNDS
ARRA FUNDS
6/12/2008
Hurricane Recovery Update
24
Construction Letting History
$1 800
6/12/2008
Federal Disaster Recovery Funds
Allocation
Spending
Remaining
Percent
S
Allocation
Spending
Remaining
($ Million)
Economic
Development
371
252
119
67.9%
Education
390
117
213
45.4%
Housing
11,413
8,788
2,625
77%
Housing
77%
Infrastructure
23,177
6,310
16,867
27.2%
Miscellaneous
742
169
573
22.8%
To t a l
$36,093
$15,696
$20,397
43.5%
49
6/12/2008
Monthly Road Home Closings
Monthly Road Home Closings
140000
130000
Montly Closings
Closings Held
120000
110000
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
50
25
Spent
11 413
8 788
2 625
Montly Closings
Closings Held
6/12/2008
New Orleans Metropolitan Area Population
The Metropolitan Area has 88% of its pre storm population
The Metropolitan Area has 88% of its pre storm population
– Jefferson Parish is back to pre-storm levels
– St. Tammany, St. Charles and St. John the Baptist Parishes have grown
– Orleans, Plaquemines and St. Bernard Parishes have substantially fewer
residents
Source: U.S. Census and GCR & Associates, Inc. using data provided by Entergy Louisiana and ESRI, Inc.
51
Key Stats for the City of New Orleans
The City of New Orleans continues to recover
A i t l 77% f it t l ti h t d
– Approximately 77% of its pre-storm population has returned
– While very high, vacant residential properties continue to be absorbed
– Over 70% of the jobs based in Orleans Parish have returned
– Commercial activity is currently at 76% of pre-storm levels
– While increasing, school enrollment continues to lag other indicators
52
26
6/12/2008
Key Stats for the City of New Orleans
6/12/2008
Levee Restoration and Enhancement
storm protection to Metro New Orleans (five parishes)
• State executing program of over $1.5 billion for coastal
restoration and hurricane protection
• Hurricane/Flood protection in place today in better than
ever before
• New levees will provide even greater protection
• New building codes and higher build elevations provide
additional protection
• 17 new coastal restoration efforts totaling an estimated $6-8
billion. These coastal buffers reduce storm surge intensity
53
6/12/2008
Proactive Fiscal Reforms
27
• $15 billion in federal work underway to provide 100-year
storm protection to Metro New Orleans (five parishes)
6/12/2008
Commission on Streamlining Government
• Legislatively created 10-member commission consisting
g
g
of leaders in state government, business, and public
policy.
• Examine each agency’s constitutional and statutory
activities, funding , programs, services, powers, duties
and responsibilities.
D t i hi h f th b li i t d
• Determine which of these can be eliminated,
streamlined, consolidated, privatized or outsourced.
• Submit initial report on recommendations by December
15, 2009.
55
6/12/2008
Postsecondary Education Review Commission
• Examine the governance, facilities, funding, operations and
number and alignment of degree programs at Louisiana
public colleges.
• Review and analyze Louisiana’s educational needs, relevant
data, current policies and practices, structure, and funding
mechanisms.
• Recommend the most efficient and effective ways for the
state to meet its goal of providing citizens with the
educational attainment necessary to meet the critical needs
of our state and regions.
• Provide a written report of findings and recommendations.
56
28
Commission on Streamlining Government
y
Postsecondary Education Review Commission
Streamlining and Reform Efforts Already
Underway
Underway
• Passing legislation to require annual reporting and a
biennial review of statutorily created funds.
• Passing legislation to make reforms to civil service and
performance-based pay for state employees.
• Implementing an Enterprise Resource Planning project,
ll d LG th t ill l th t t ’ t
called LaGov, that will replace the state’s current
financial system and redesign more than 125 business
processes are being redesigned. Cost savings for a
state implementing similar system: Tennessee, $185.9
million over 10 years.
57
Streamlining and Reform Efforts Already
Underway (Cont’d)
Underway (Cont’d)
• Reducing the size and cost of the state vehicle fleet, through
moratorium on the acquisition of new vehicles and new policies to
reduce the size of the state’s existing number of state-owned
vehicles. In Fiscal Year 2008, state agencies and colleges and
universities purchased 1,412 vehicles at a total cost of
$26,163,700.21. In Fiscal Year 2009, they purchased less than half
that number of vehicles at less than half the cost: 597 vehicles at a
total cost of $11 661 383 76
total cost of $11,661,383.76.
• At Louisiana Economic Development department – eliminated the
“traditional” Workforce Development and Training Program,
which, with the creation of the new Fast Start Program, was
determined to be duplicative.
58
29
6/12/2008
Streamlining and Reform Efforts Already
6/12/2008
Streamlining and Reform Efforts Already
Streamlining and Reform Efforts Already
Underway (Cont’d)
Underway (Cont’d)
• At the Division of Administration — eliminated the Office of
Electronic Services and merged it with the Office of Information
Technology, as well as undertaking a department-wide evaluation
of outsourcing and privatization opportunities.
• In the Office of the Governor — moved the Louisiana State Board of
Cosmetology out of the office to function independently as do
other boards and commissions, and moved the Governor’s Oil Spills
,
Coordinator’s Office to the Department of Public Safety.
• Moved the Louisiana Office of Student Financial Assistance within
Higher Education to better align higher education policy with
financing programs.
p
59
Streamlining and Reform Efforts Already
Underway (Cont’d)
Underway (Cont’d)
• Joined the Louisiana School for the Visually Impaired with
the campus of the Louisiana School for the Deaf to increase
student safety, capture additional federal resources,
centralize business office functions while maintaining
separate entities, and achieving cost-savings through shared
services.
T iti i th St H l R h bilit ti C t i
• Transitioning the Steve Hoyle Rehabilitation Center in
Tallulah from a state-run correctional facility housing adult
male offenders to a parish-run facility housing a re-entry
program for adult female offenders.
60
30
6/12/2008
Streamlining and Reform Efforts Already
6/12/2008
Streamlining and Reform Efforts Already
Streamlining and Reform Efforts Already
Underway (Cont’d)
Underway (Cont’d)
• At the Louisiana Tax Commission — eliminating the
Legal Section of the agency and outsourcing its legal
work.
• At the Department of Revenue — closing its Thibodaux
office and instituting telecommuting for its remaining
employees to continue to provide services to citizens
employees to continue to provide services to citizens
while working from home.
61
Reducing the Size of State Government
• Executive branch
fulltime employees
: Based on figures between
December 31, 2007 and September 4, 2009, the number of Executive
, p , ,
Branch fulltime employees, which includes Higher Education and LSU
hospital system, fell from 89,371 to 87,925, a reduction of 1,446.
• Executive branch appropriated
fulltime positions
: The enacted FY 10
budget includes a net reduction in the number of full-time authorized
positions throughout the Executive Branch by 1,335. This action follows
971 strategic position eliminations associated with the FY 09 mid-year
budget reductions, and 1,019 reductions previously implemented through
budgetary action for a total of 3 325 fulltime executive branch
budgetary action, for a total of 3,325 fulltime executive branch
authorized positions reduced since the beginning of the Jindal
administration.
62
31
6/12/2008
Streamlining and Reform Efforts Already
6/12/2008
Reducing the Size of State Government
Capital Outlay Reform — Paying Down the Backlog
Paying Down the Backlog
• Implementing capital outlay reform limiting funding to non-state
h f h l f d
projects to no more than 25 percent of cash line of credit capacity
and requiring 25 percent local match for non-state projects.
• With an average of $350 million in cash line of credit capacity, and
with 25 percent, or $87.5 million, going toward local projects,
requiring a match of 25 percent means a savings of $21.88 million
to the state to accomplish $109.38 million in projects.
• Strict limitations on new non-cash line of credit projects.
Strict limitations on new non cash line of credit projects.
• With surplus investments in road and higher education construction
projects with approximately $131 million outstanding non-cash lines
of credit, will reduce an inherited $1.465 billion backlog in the
construction program to about $600 million.
63
6/12/2008
Internal Budgeting Process Reform
• Shifting focus away from the usual budget practice of
g y g p
adding or subtracting from the base costs of
government.
• Focusing instead on what outcomes matter most to
our citizens.
• Determining how much should be spent to achieve
each outcome.
• Determining how best to deliver the outcome to get
the results citizens expect, through new ideas and
new, more cost-effective practices.
64
32
6/12/2008
Capital Outlay Reform
Internal Budgeting Process Reform
6/12/2008
Net State Tax Supported Debt
6.00%
5.00%
4.00%
3.00%
Projected Debt %
Allowable Debt %
2.00%
1.00%
0.00%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
65
6/12/2008
Summary
• Louisiana State Government s fiscal status is strong.
• The economy continues to outperform the nation and
other southern states.
• We are succeeding in further diversifying our economy
through dynamic economic development initiatives.
• We are proactively streamlining and reforming
government to maintain continued fiscal strength.
66
33
Net State Tax Supported Debt
7.00%
• Louisiana State Government’s fiscal status is strong
