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Louisiana at the Crossroads Responsible Responses to Louisiana’s Financial Crisis

Louisiana at the Crossroads Responsible Responses to Louisiana’s Financial Crisis. WWW.LABUDGET.ORG. REC Forecast Change December to June. Percent of Total Budget. $1.6 billion ÷ $25.5 billion = 6%. FY12 Projected Shortfall Total FY11 Budget.

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Louisiana at the Crossroads Responsible Responses to Louisiana’s Financial Crisis

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  1. Louisiana at the Crossroads Responsible Responses to Louisiana’s Financial Crisis WWW.LABUDGET.ORG

  2. REC Forecast Change December to June

  3. Percent of Total Budget $1.6 billion ÷ $25.5 billion = 6% FY12 Projected Shortfall Total FY11 Budget Percent of total FY11 budget to be cut over 3 years

  4. Percent of State General Fund Spending $1.6 billion ÷ $7.7 billion = 21% FY12 Projected Shortfall FY11 State General Fund Percent of FY11 state general fund to be cut in FY12

  5. Percent of Discretionary Spending $1.6 billion ÷ $2.6 billion = 62% FY12 Projected Shortfall FY11 Discretionary Funds Percent of FY11 discretionary fund to be cut in FY12

  6. Spending Reverts to Pre-Katrina Levels (in 2009 dollars)

  7. Increases Since Pre-KatrinaFY05-FY10

  8. Fiscal Effect of Stelly Repeals

  9. FMAP Rate Change

  10. 5-Year Tax Exemption Budget $7.1 BILLION

  11. FY 2011 Budget Projections • State general fund revenues: $7.7 billion • Cost of tax exemptions: $7.1 billion • Tax code spending equals 92%of SGF revenues

  12. What Louisiana’s Tax Policies Cost $195 million $119 million $32 million $34 million $23 million $15 million Insurance Premium Tax Credit Motion Picture Investor Credit Income shifting by multistate corporations Paying companies to send their sales taxes on time Enterprise zone credit Horizontal drilling exemption

  13. Tax Exemption Budget Needs More Transparency • Example: Of 179 sales tax exemptions, 90 are lumped under “Other Exemptions” at a cost of $3.8 billion of $4.7 billion or 80%

  14. State & Local Taxes in 2007

  15. The budget is “devastating” Suspending tax exemptions is “something we should debate” Senate President Joel Chaisson Baton Rouge Business Report September 24, 2010

  16. Better Choices for a Better Louisiana • We need a balanced, transparent approach to solving Louisiana’s fiscal crisis. • Fiscal crisis is due in part to the global recession but is also of our own making. • Spending is not the problem. • We need RESPONSIBLE revenue measures, spending measures, and COMMON SENSE savings. • Revenue measures must be thoughtful, adequate, sustainable, and fair.

  17. WWW.LABUDGET.ORG

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