Budget 101: Outgo

Jan 18, 2017

Yesterday we looked at state income, as part of Budget 101. Today we’ll look at the outgo.

Where does Louisiana spend its $9-billion of State General Fund revenue?  Let’s begin with non-discretionary items. Commissioner of Administration Jay Dardenne says first and foremost, we pay our debts.

“We have a very appropriately aggressive set of laws in order to make sure we’re going to satisfy our debt first.”

Current total bonded indebtedness is $83-billion, with annual payments running just shy of a half billion dollars.

There are constitutional obligations to fund public schools through the MFP—that’s $3.6-billion – and provide supplemental pay for police and firefighters , which runs $124-million per year.

There are federal mandates and statutory obligations—call that another billion.

And there’s Medicaid.

“There are mandatory services in the Medicaid Program, required for us to continue to have access to the program,” Speaker Pro Tem Walt Leger reminded the House last May, as they tried to strip funds from the Department of Health budget in order to fully fund TOPS.

Those mandatory services cost the state another billion at minimum, though Louisiana receives $1.6-billion in federal funds in exchange.

The state has to pay for the legislative and judicial branches of government, in addition to so-called “unavoidable obligations” within the executive branch – like paying statewide elected officials, state workers, and caring for prisoners.

Those obligations include paying for investigative departments – like the Legislative Auditor, Attorney General and Inspector General – though Rep. Kenny Havard (R-Jackson) wondered this past year if they were all totally necessary.

“We have our local D.A.s; we have the Attorney General; and we also have the Legislative Auditor. I mean, how many investigative groups do we need in this state?”

Anyway, once you add up the non-discretionary spending it leaves just over $2-billion for non-discretionary spending. That includes funding higher education and the majority of TOPS scholarships; paying the private partners in the public hospitals, and paying for home care for the disabled.

Where do you cut?