Budget 101: Outgo

Jul 4, 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 what are known as “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 – what we’ve borrowed for building roads and bridges -- is $83-billion, with annual payments running  just shy of a half-billion dollars.

Revenue Secretary Kim Robinson says that’s cemented in place: “You can’t simply take money that’s going to pay down bonded indebtedness and shift it to somewhere else in the budget.”

The state constitution requires funding public schools through the MFP -- that’s $3.6-billion. Louisiana is also constitutionally required to provide supplemental pay for police and firefighters, which is another $124 million.

There are also federal mandates and statutory obligations that total another billion dollars of required outgo.

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 House members during a debate over reducing finding for the state Department of Health.

We get at least three federal dollars for every state dollar we put into healthcare. But that’s another billion dollars of spending – at minimum.

The state also has to pay for the legislative and judicial branches of government, as well as paying statewide elected officials, state workers, and covering all costs of housing and caring for prisoners.

That leaves just over $2-billion for discretionary spending – things like higher education and TOPS; paying private partners in the public hospitals, and providing home care for the disabled.