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Balancing the FY03 Budget
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As approved by the Legislature, the FY03 State Budget is in
balance. Appropriations from all means of financing, as
adopted, total approximately $16.3 billion, of which State
General Fund (Direct) funding amounts to $6.6 billion. The
FY03 total budget represents a 1% increase over the FY02
budget.
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Although the Legislature voted to reduce taxes by roughly
$24 million, the Senate was able to put together a plan to
maintain the same expenditure level as proposed in the
Executive Budget and fund additional initiatives by utilizing
other means of financing. Actions by the Senate Finance
Committee that provided additional revenue to support the same
expenditure base that was formerly tied to full implementation
of the current tax base included the following:
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$23.4 million Defeasance - to accomplish a $23.4 million
defeasance, the Senate had to utilize $23.1 million in
Cash Capital Outlay....that is, we reduced cash capital
outlay projects by $23.1 million in order to use the
monies for a bond defeasance in FY02. The defeasance frees
up money in FY03 without adversely affecting the FY04
budget because the existing debt service schedule will
decrease by $23 million in that year.
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$9.1 million in Means of Financing Swaps in the
Departments of Education and Agriculture. In the
Department of Education, $6.7 million in federal funds
replaced State General Fund. In the Department of
Agriculture, $2.4 million in Louisiana Agriculture Finance
Authority (LAFA) monies replaced State General Fund.
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HB 266 dealing with the licensing tax on insurance
premiums was used to address a deficit in the
Firefighters' Retirement System. The State will receive
roughly $5.7 in funding from the increase in insurance
premiums above the FY02 official forecast.
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In April, the Revenue Estimating Conference recognized an
additional $17.4 million dollars for FY02. The additional
money subsequently was used for the FY02 Supplemental
Appropriation Bill. The Conference also recognized an
additional $12.1 million for FY03. The recognition of the
additional $12 million for FY03 and an increase in dedicated
funds (SELF Funds) helped fund budgetary needs that were not
included in the Executive Budget as originally proposed to the
Legislature in early Spring.
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Specific Expenditures in HB 1 - "Supplemental
Section" expenditures are no longer directly linked or
contingent upon specific revenue sources (such as the TOPS
program linked directly to the passage of the suspension of
the $25 per child education tax credit). Instead, the
Supplemental Section is contingent on all revenue sources up
for renewal during the 2002 Regular Session. The effect of
this change means that in the event a particular tax measure
did not pass, all expenditures in the Supplemental Section
will share a pro rata reduction.
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At the time of publication of this document, all of the tax
measures supporting items in the "Supplemental
Section" have been enacted and were recognized and
incorporated into the FY03 Official Forecast by the Revenue
Estimating Conference at its June 20 meeting.
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