Spending on Social Welfare Programs in Rich and Poor States. Final Report.. State Budget Development and Implementation

07/01/2004

In 1987, Louisiana moved from line item budgeting to program budgeting, and since 1997, it has implemented a performance-based budgeting system. The governor's office sets priorities and budget strategies. The legislature is not an independent body by practice, and is influenced by the governor, who carries line-item veto power. Political parties do not represent the major political divisions in Louisiana, and the governor's party has less impact on how the legislature reacts than in many other states. In general, Louisiana state government is more divided along policy lines.

The revenue forecast is adopted by the Revenue Estimation Conference, comprised of the governor, the president of the Senate, the Speaker of the House of Representatives (or their respective designees), and a faculty member from a public or private university in the state. The state constitution forbids the legislature from adopting a budget that exceeds the Conference's adopted revenue forecast. The budget originates in the Division of Administration (DOA), the central budget agency for the governor, which prepares the general budget guidelines for executive agencies. From August to December, the executive agencies prepare and submit budget requests to the DOA. The DOA then reviews the requests and prepares an executive budget for the legislature. Prior to the regular legislative session, the general appropriations bill is introduced, putting the governor's executive budget recommendations into a legislative proposal. This bill originates in the House, and, if passed, it is sent to the Senate. Once the bill is introduced in the Senate, it is referred to the Senate's Committee on Finance. After the Committee hearings, the Senate votes on the bill, and if passed, it is returned to the House for concurrence. The House then sends the bill to the governor for review and signature.

According to the Center on Budget and Policy Priorities, Louisiana faces a projected budget shortfall of $500 million in SFY 2005. Although Louisiana did not make any cuts after the budget was passed in SFY 2002, Louisiana reduced the SFY 2003 budget by $100 million mid-year. Louisiana has also been cutting state agency positions. Between SFYs 2001 and 2002, its full-time equivalent positions were reduced by 17.5 percent, including state administered welfare system positions.

Several areas of the state budget are considered non-discretionary and not subject to budget cuts, including natural resources programs, debt services, and the Minimum Foundation Program. Social services programs, however, are discretionary and subject to cuts. Higher education and economic development recently have been given higher priority in the budget process through efforts by the governor.

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