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Louisiana Budget 101
Posted on 5/24/18 at 2:12 pm
Posted on 5/24/18 at 2:12 pm
Since there are so many of you on this board who have no idea how the state of LA budget works, I figured I would give a short tutorial.
Revenue comes from two main buckets, both of which can be further broken down.
1) Federal revenue - this is money that the feds give to LA. This is generally in the form of block grants, and matching funds. Block grants generally can be used for a variety of purposes, but have some restrictions (a schools block grant can't be used for the national guard to buy guns, for example). Matching funds require the state to put up some portion to get the federal funds, and there are very tight restrictions (for example, the feds will give money to pay for 80% of a new highway, if the state agrees to pay the rest).
The lion's share of our budget - around 2/3rds - is this money.
2) State Revenue - these are all of the taxes and fees that are charged by the state. This includes state sales tax, drivers license fees, and so forth.
A lot of these monies are restricted in spending use. For example, there may be a rule that says fees paid to camp in a state park, can only be used for expenses in the state park system. These fees can't be used to pay for TOPS. This is the majority of state revenue.
You also have general fund state revenue. These are taxes, fees, etc, that are not tied to a specific agency/purpose. Most of the sales tax is the big one here (a small portion of sales tax is restricted for tourism).
It would be much easier if we had two budgets - one that spends state money, and one that spends federal passthrough money. But we don't. However, the important thing to remember is that our ability to move around federal money is pretty much limited.
So, let's say the spending increases by 3 billion. You need to look at where that money came from. If, for example, that entire 3 billion came from federal funds that are REQUIRED to be used for Medicaid, it is dishonest to say that "the state raised spending" or "the state raised taxes". It's not the state's money, really... the state is just the passthrough agent, the escrow holder of said money.
Of course the budget is a lot more complex, but this should help give simple information so you can give intelligent discussion to budget topics.
Revenue comes from two main buckets, both of which can be further broken down.
1) Federal revenue - this is money that the feds give to LA. This is generally in the form of block grants, and matching funds. Block grants generally can be used for a variety of purposes, but have some restrictions (a schools block grant can't be used for the national guard to buy guns, for example). Matching funds require the state to put up some portion to get the federal funds, and there are very tight restrictions (for example, the feds will give money to pay for 80% of a new highway, if the state agrees to pay the rest).
The lion's share of our budget - around 2/3rds - is this money.
2) State Revenue - these are all of the taxes and fees that are charged by the state. This includes state sales tax, drivers license fees, and so forth.
A lot of these monies are restricted in spending use. For example, there may be a rule that says fees paid to camp in a state park, can only be used for expenses in the state park system. These fees can't be used to pay for TOPS. This is the majority of state revenue.
You also have general fund state revenue. These are taxes, fees, etc, that are not tied to a specific agency/purpose. Most of the sales tax is the big one here (a small portion of sales tax is restricted for tourism).
It would be much easier if we had two budgets - one that spends state money, and one that spends federal passthrough money. But we don't. However, the important thing to remember is that our ability to move around federal money is pretty much limited.
So, let's say the spending increases by 3 billion. You need to look at where that money came from. If, for example, that entire 3 billion came from federal funds that are REQUIRED to be used for Medicaid, it is dishonest to say that "the state raised spending" or "the state raised taxes". It's not the state's money, really... the state is just the passthrough agent, the escrow holder of said money.
Of course the budget is a lot more complex, but this should help give simple information so you can give intelligent discussion to budget topics.
10
Posted on 5/24/18 at 2:26 pm to LSUFanHouston
quote:
Since there are so many of you on this board who have no idea how the state of LA budget works, I figured I would give a short tutorial.
Posted on 5/24/18 at 2:27 pm to LSUFanHouston
quote:
f, for example, that entire 3 billion came from federal funds that are REQUIRED to be used for Medicaid, it is dishonest to say that "the state raised spending" or "the state raised taxes". It's not the state's money, really... the state is just the passthrough agent, the escrow holder of said money.
Except that the state will have a 10% cost share match for those federal dollars. So yeah, the state is increasing spending of OUR money.
Posted on 5/24/18 at 2:28 pm to LSUFanHouston
LSUFanHouston, you’re spending way too much time and energy defending Bumpy Head JBE.
Every year in his administration we face a half billion dollar shortfall. JBE’s ONLY solution is to raise taxes on Louisiana people and businesses. I don’t care if the Tooth Fairy gives us a trillion dollars, JBE is spending more than we have, and he wants to raise taxes.
If he acted like a responsible governor, he would call a constitutional convention. But Bumpy Head likes spending and taxing.
Why don’t you cut to the chase and tell us how he prefers you to felate him.
Every year in his administration we face a half billion dollar shortfall. JBE’s ONLY solution is to raise taxes on Louisiana people and businesses. I don’t care if the Tooth Fairy gives us a trillion dollars, JBE is spending more than we have, and he wants to raise taxes.
If he acted like a responsible governor, he would call a constitutional convention. But Bumpy Head likes spending and taxing.
Why don’t you cut to the chase and tell us how he prefers you to felate him.
Posted on 5/24/18 at 2:32 pm to Drunken Crawfish
quote:
Except that the state will have a 10% cost share match for those federal dollars. So yeah, the state is increasing spending of OUR money.
There will eventually be a 10% cost share in a few years, maybe, for expanded medicaid. And at that time, maybe, we will need a tax increase to pay for our cost share.
But, before they were on medicaid, they were on unreimbursed care dollars. Do you know what our cost share is on that? 37%.
So if in a few years, we need to increase taxes, then that is a discussion to have. But that has nothing to do with the budget today. So, no, they are not increasing spending of state money. Maybe in future they will be, but not now.
Posted on 5/24/18 at 2:33 pm to Gaspergou202
quote:
Why don’t you cut to the chase and tell us how he prefers you to felate him.
I love insults like that... shows I've won the argument.
Posted on 5/24/18 at 2:35 pm to LSUFanHouston
quote:
LSUFanHouston
Honest Question: So what is the governor's goal? Is he striving to keep that 0.5 cent tax? Stay at 5% instead of 4.5%? If so, what is really the big deal?
Posted on 5/24/18 at 2:38 pm to LSUFanHouston
And for those interested in seeing how your tax payers money (whether through Fed or State) is being spent... go thumb through to budget.
You'll be appalled.
You'll be appalled.
Posted on 5/24/18 at 2:51 pm to LSUFanHouston
quote:
Maybe in future they will be, but not now.
That is 100% not true. This chart was from a 2015 LSU/LPHI study (that JBE was touting) showing what the reduction or increase in state spending would be with expansion. Keep in mind that they underestimated the enrollment jump by 75,000 people so these numbers may be even higher.
Posted on 5/24/18 at 2:55 pm to Drunken Crawfish
quote:
That is 100% not true
Tell me, where in the current state budget, we are paying for future years of medicaid costs? We are not.
quote:
This chart
Since you are only showing me a cutoff page... is that "state spending" only state revenue dollars? Or is that total state spending including federal dollars?
Posted on 5/24/18 at 3:04 pm to Paluka
quote:
Honest Question: So what is the governor's goal? Is he striving to keep that 0.5 cent tax? Stay at 5% instead of 4.5%? If so, what is really the big deal
I honestly don't see this governor as wanting to dramatically increase the size of the state government / spend more money. I do think his end game is no more cuts, though.
I think the goal for him is no more cuts, and a budget that is stable, balanced, and grows at the same rate the tax revenue naturally grows. I don't think he wants to put in any net additional taxes / increase tax rates... however... certainly any new money we get because of the natural growth of the tax base, he will want to spend it to keep state services at the same level.
Posted on 5/24/18 at 3:05 pm to LSUFanHouston
It's state spending (look at the bottom)
Posted on 5/24/18 at 3:20 pm to LSUFanHouston
quote:
Since you are only showing me a cutoff page... is that "state spending" only state revenue dollars? Or is that total state spending including federal dollars?
From the Times-Pickyournose the liberal biased fake news of New Orleans (with Yankee ownership)
Louisiana budget deficit lowered from $994 million to $648 million
Updated Apr 12; Posted Apr 12
By Julia O'Donoghue julia_odonoghue@nola.com,
NOLA.com | The Times-Picayune
Louisiana's budget picture got a little bit rosier Thursday (April 12), when the state's projected budget deficit for the fiscal cycle that starts July 1 was officially lowered from $994 million to $648 million. It should make the state's current financial problems easier to solve.
About $309 million of the $346 million the state expects to see will come from increases in state personal income tax revenue. Changes to federal income tax laws earlier this year meant that state income tax collections automatically increased. End quote.
So after all sources of income including hard working American’s national taxes, JBE’s spending management resulted in a one BILLION DOLLAR DEFICIT ($994,000,000.00)!
Fortunately for Louisiana and America, Trump and the National Republicans passed a tax cut that results in His Royal Bumpy Head-Tax and Spender JBE getting $346 millions to squander.
Now without Federal help he needs to TAX $648 millions from Louisiana workers and businesses.
And this is good .............. how?
This post was edited on 5/24/18 at 3:23 pm
Posted on 5/24/18 at 3:33 pm to LSUFanHouston
quote:
Tell me, where in the current state budget, we are paying for future years of medicaid costs? We are not.
I understand that. The Feds only offered a 100% match through 2015. Since then the state match has increased annually and by 2020 it will cap at 10%. As of now we are somewhere in the 96%-94% federal match.That means that the state has INCREASED medicaid spending every year since expansion. Plus, all of the enrollment counts were grossly underestimated so that is adding to the cost.
To put it simply: The increased match requirement from the state + higher enrollment counts = more spending.
quote:
Since you are only showing me a cutoff page... is that "state spending" only state revenue dollars? Or is that total state spending including federal dollars?
I wasn't trying to show you the entire page, just the graph. And it is only state revenue dollars as referenced by the fricking key at the bottom. Do I really have to spell all of this out
Keep in mind that we are closer to the high impact projections since enrollment is higher than projected.
Posted on 5/24/18 at 4:13 pm to Gaspergou202
quote:
JBE’s spending management resulted in a one BILLION DOLLAR DEFICIT ($994,000,000.00)!
Follow me here.
When Jindal left office, our budget deficit for the first year of JBE (with no new spending, and some spending cuts actually) was 1.3 BILLION.
Jindal sold property, swept money out of reserve accounts, and delayed payments to avoid having to raise taxes.
Jindal did not cut expenses.
When JBE came in... there was no more reserve money to sweep, no more excess property to sell, no more bills to delay paying, no more accounting tricks.
The GOP in the legislature approved a 1.3 billion dollar sales tax hike. JBE signed it... but the GOP sent it to him to sign.
Sales tax hike lasted two years, it was temporary.
Now, two years later... about half of that 1.3 billion is coming from spending cuts, federal tax reform, and better oil and gas prices.
So, we can maintain half of the GOP-approved and JBE-signed tax increases from two years ago, or, we can cut spending by that amount.
That's where we are. It's not hard.
Posted on 5/24/18 at 4:18 pm to Drunken Crawfish
quote:
I wasn't trying to show you the entire page, just the graph. And it is only state revenue dollars as referenced by the fricking key at the bottom.
It said state spending. Which generally means, the state budget, which generally means, the entire state budget, including federal passthrough revenues.
Posted on 5/24/18 at 4:33 pm to LSUFanHouston
That is the State's portion of medicaid expansion spending. I think the actual spending for the state per year for Medicaid is somewhere around $8-$9 billion.
Posted on 5/24/18 at 5:00 pm to LSUFanHouston
The thing that amazes me is that some people want to cut at all costs. It has gotten to the point where businesses are begging the state to raise taxes because the lack of infrastructure investment is making them uncompetitive. Look at the recent deals to bring companies it - they all require the state to spend more on education. So if businesses are sending the message that the state needs to spend more - doesn't that make the republicans who want to cut the budget anti-business?
Posted on 5/24/18 at 5:22 pm to LSUFanHouston
You can look up the exact figures, but when JBE got his 1.2 Billion dollar tax increase the state's revenues ( excluding federal revenues) jumped from roughly 8 Billion to almost 9 Billion.
Think about that. At a time when a lot of folks were struggling Edwards raised the state's take over 10 percent.
Think about that. At a time when a lot of folks were struggling Edwards raised the state's take over 10 percent.
Posted on 5/24/18 at 5:28 pm to LSUFanHouston
That's not how to have a discussion on this Board. You have to call JBE an idiot, posit that everything needs to be cut, and then proclaim anyone who deals in reality to be gay.
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