TRANSFORM LOUISIANA


ISSUE: 1. NO. 2


December 16, 2009



THE FINANCES OF STATE GOVERMENT IN LOUISIANA




Table of Contents

The Purpose of the Web Magazine

The Philosophy of the Magazine

The Key Arguments

The First Issue

The Second Issue

Sources

Background

Courts

Judicial Branch Agencies

  • Compensation
  • Critical Commentary:
  • Conclusion
  • Suggestions for Improvement

    Further Reading

    Glossary

    Trivia Quiz

    List of Data Charts

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    Louisiana's Government Must Be Transformed

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    If you do not wish to receive future issues of this magazine, please e-mail us at the above address and we will discontinue sending notices of future issues to you. If you have questions or suggestions, please let us hear from you. We will control the letters and responses we receive from our readers, but we welcome thoughtful comments, questions, and suggestions.




    The Purpose of the Magazine



    The purpose of the magazine is to motivate Louisiana's leaders and its people into taking immediate steps to transform the structure, financing, processes and political ideologies of state government as a means of improving the state’s human condition, and as a means of building a better future, bright with opportunity and promise for all people.

    This magazine is free-of-charge, free of advertising, free of party affiliation, and copyright-free. It intends to advocate one message--that the government of Louisiana must be transformed, if the state and its people will have the resources to meet the human development challenges they are facing and will continue to face.

    The primary audiences of the magazine are elected officials, other government officials, the media, academicians, and policy research organizations. However, the magazine may be useful as background information for civic discussions and actions, and for educating students about government. To remedy some of the difficulties that the policy jargon may create, a glossary of terms is included at the end of each issue of the magazine.

    This magazine hopes to demonstrate the need for such transformation and to suggest ways to achieve it.




    The Philosophy of the Magazine



    The philosophy of the magazine is based on several principles, assumptions and beliefs:

    We believe that that we are one people, inextricably bound together by our history, our present circumstances, and the hopes of our future.

    We believe that wealth is created, not just by individual capital, entrepreneurship and labor, but by the sum total of the intellectual and cultural heritage of all the people. For this reason, the welfare and progress of each of us are dependent upon the welfare and progress of all of us. What Katrina has taught us, if nothing else, is that we are all at risk from many dangers and that we must work as one to survive, prevail, and ultimately excel.

    We believe that Government is a tool of the people. Its purpose is to help each of us to do those things that we cannot do as individuals. Its purpose is also to provide leadership, to manage the collective resources of the people efficiently and effectively, and to distribute equitably the resources of the state.

    We believe also that, throughout much of our history, this tool has not been very competent in leading us, in protecting us, in helping our children learn and develop, in administering efficient, effective, and equitable justice, and in providing manifold, economic, social, and cultural opportunities for all of us. Far too often, our elected leaders have adopted the style and politics of satisfying interests, instead of seeking the common good, making strategic choices, and providing for the general welfare.

    We believe that Louisiana requires a radical, purposeful, and strategic transformation of its government, particularly its state government.

    For this reason, we have selected the name "Transform Louisiana" to convey these beliefs and to provoke discussion and action. Readers should note that the word "reform" is not used. The word "reform" looks backwards to a pre-existing state of goodness. "Reform" is also a word with multiple, sometimes contradictory meanings. The word is often used as a code word for blindly cutting the size of government, or for eliminating or cutting that which some elected officials do not like, do not respect, or do not want. "Transform," on the other hand, is free of these connotations and is more future-oriented.




    Key Arguments



    The key arguments advocated by the magazine are:




    Summary of the First Issue


    TRANSFORM LOUISIANA

    ISSUE 1 NO. 1

    April 15, 2009



    In the first issue, we explained our interpretation of the role of government in Louisiana. We provided information on the structure of all three branches of state government, including information on the number of elected officials, departments and divisions, and the number of employees in each branch. We then commented critically on the background information by noting the complexity of the government and the large number of officials, agencies, and employees, by indicating the negative effects that the structure encourages, in terms of lack of transparency, unnecessary bureaucracy, redundancy, and the phenomenon of the silo effect, top-heavy administration, lack of service integration, and surplus judgeships. We concluded the substantive part of the first issue by making several suggestions for reform.

    In response to the first issue, readers made several comments and suggestions. Two readers strongly urged that the magazine indicate the name or names of the publisher and the resources behind the publication. Another suggestion was to identify t the sources of information more prominently in the text rather than place them in charts at the end of the issue. Lastly, readers noted several typographical errors and grammatical error. In this issue, we will address each of these suggestions and comments.

    We will begin by saying who we are. My name is Anthony Gagliano. I live in New Orleans and I am retired. I write and publish this web magazine with my own limited financial resources and my own limited skills in writing, editing, web knowledge, and distribution abilities. I am doing what I can, given all these limitations, to honestly and forthrightly say what I strongly believe needs to be done if Louisiana is to have a better future. I welcome thoughtful criticism and discussion and hope that others will join me in doing what they can to transform the state.

    The materials in the magazine are not under copyright and may freely be used by readers.




    The Second Issue


    TRANSFORM LOUISIANA

    ISSUE 1 NO. 2

    December 16, 2009



    THE FINANCES OF STATE GOVERNMENT IN LOUISIANA


    In this issue, we will focus on state finances. We will begin by describing the major sources of information on the state’s finances. We will proceed to provide background information on various aspects of state finances. We will then provide a critical commentary on several concerns indicated in the background, including concerns regarding transparency and accountability, judicial branch finances, and state’s financial priorities. We will conclude the substantive part of the issue by making several suggestions for change.




    Sources of Information



    Sources of Information: Louisiana

    Annual information on the financing of the state government of Louisiana is very transparent even though there are numerous problems. The general reader must consult multiple sources of information, struggle to comprehend a bewildering array of types of revenues and expenditures, funds, accounting entities, and exceptions. In addition, there is an incredible lack of aggregated, comprehensive information on the courts and the judicial branch agencies of the state. The general sources of information on state financing are provided in several annual or periodic Louisiana reports.

    The Comprehensive Annual Financial Report (CAFR)

    The Comprehensive Annual Financial Report (CAFR) on the financial condition of the State of Louisiana is prepared each year by the Office of Statewide Reporting and Accounting Policy of the Division of Administration with the objective of reporting the government’s operations as a single unified entity. The Division of Administration is responsible for the accuracy, completeness, and fair presentation of the data, representations, and disclosures presented in the CAFR.

    The basic financial statements in the state CAFR are audited each year by the Legislative Auditor. The goal of the independent audit is to provide reasonable assurance that the basic financial statements of the State are free of material misstatement. The independent audit involves examining, on a test basis, evidence supporting the amounts and disclosures in the basic financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. The independent auditor’s report is presented as the first component of the financial section of the CAFR.

    The CAFR presents information on the various departments, agencies, activities, and organizational units that are within the control and authority of the Louisiana Legislature and/or constitutional officers of the State. Louisiana, like that of the United States, has three branches of government – legislative (bicameral), executive, and judicial.

    As required by GASB Statement No. 14, “The Financial Reporting Entity,” as amended by GASB Statement No. 39, “Determining Whether Certain Organizations are Component Units,” a legally separate entity is considered to be a component unit of the State if at least one of the following criteria is met:

    (1) The state appoints a voting majority of the organization’s governing body and is able to impose its will on the organization or there is a potential financial benefit/burden to the state.
    (2) The entity is fiscally dependent on the state.
    (3) The nature and significance of the relationship between the state and the entity is such that exclusion would cause the financial statements of the state to be misleading or incomplete.

    Depending upon the closeness of the relationship with the state, the financial information of some component units are blended with those of the state reporting entity, while others are discretely reported. A component unit is considered blended and would be included in the reporting entity’s financial reports, if the following tests are met. The component unit’s governing body is substantively the same as the governing body of the primary government. The component unit provides services exclusively, or almost exclusively, to the primary government. The component unit, exclusively or almost exclusively, benefits the primary government even though it does not provide services directly to it. The following blended component units in Louisiana provide services almost exclusively to the primary government: the Louisiana Lottery Corporation, the Tobacco Settlement Financing Corporation, the Louisiana Correctional Facilities Corporation, the Louisiana Office Building Corporation ,the Office Facilities Corporation, Louisiana the Coastal Protection and Restoration Financing Corporation, the Louisiana Recovery Authority, and the various retirement systems.

    The Comprehensive Annual Financial Supplemental Report

    The Comprehensive Annual Financial Reports (CAFR) Supplemental Report provides more detail than does the CAFR on fund, revenue, and expenditure information. Unaudited, the report is designed to meet the needs of state personnel who need to look behind some of the CAFR numbers. The supplemental reports are available online dating back to the fiscal year ending June 30, 1998.

    Popular Annual Financial Report

    The Popular Annual Financial Report (Popular Report) is prepared within six months after the close of each fiscal year in accordance with R.S. 39:80(B). The purpose of the Popular Annual Financial Report is to provide a brief, objective, and easily understood analysis of the State’s financial performance for the preceding year, as well as to facilitate wide dissemination of the report to the public. It presents selected basic information about the State’s revenues, expenditures, financial position, budget, service efforts, and performance. The information, presented in a non-technical format, is intended to summarize and explain the basic financial condition and the operations of the State for the fiscal year covered by the Comprehensive Annual Financial Report (CAFR) for the State of Louisiana. The financial data presented in the government-wide financial analysis, general fund balance, and the unreserved and undesignated general fund balance sections of this report use the same accounting measurements and principles as the CAFR.

    Revenue Estimating Conference Forecast

    The Revenue Estimating Conference Forecast is an annual estimate of recurring and nonrecurring revenue sources available in the next fiscal year. The Forecast provides revenue information by each collection department, by each major fund, and by dedication status. The Revenue Estimating Conference Forecast does not contain estimates of the revenues generated by the courts and judicial branch agencies. The Forecast is published each year in the Louisiana Register, the state journal, and on the web site of the Office of Planning and Budget of the Division of Administration.

    Single Audit

    The Single Audit is a federally mandated audit requirement designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the basic financial statements, but also on the audited internal controls of the government and compliance with legal requirements with special emphasis on internal controls and legal requirements involving the administration of federal awards. The Single Audit is available on the web site of the Legislative Auditor.

    Governor’s Executive Budget

    The Governor’s Executive Budget, which was authorized by Act 247 of the Regular Legislative Session of 2005, presents the proposed budget of the the Governor in a concise manner. This streamlined format consists of two parts. Part One contains, among other things, a revenue forecast, a table of discretionary and non discretionary funding positions in each department, a comparison of the existing and enacted budgets, and a statewide summary of budget information for the specific fiscal year. Part Two provides a detailed schedule of budget information by department and in terms of discretionary and non-discretionary funding.

    Executive Budget Supporting Document

    The Executive Budget Supporting Document includes expanded program financial information, including statements of program mission, goals and key and supporting objectives, performance indicators, general performance data trends, external comparisons, and explanatory notes for each program.

    Presentation of the Executive Budget to the Joint Legislative Committee of the Budget

    Each year, the Division of Administration presents the Executive Budget to the Joint Legislative Committee on the Budget. The presentation provides summary information on the Executive Budget, often presented with charts showing changes over time and emphasizing the Governor’s priorities.

    State Budget Document

    The State Budget provides a detailed financial plan for each fiscal year with respect to means of financing and expenditures. The State Budget is a more elaborated and revised version of the Executive Budget and consists of three sections, The first section contains a comparative statement, an economic outlook, statewide discretionary and non discretionary funding and positions, comparisons of the existing operating budget to the enacted budget, by department and by functional area, and historical trends by department. The second section, titled Part One, contains a statewide summary of budget information. Section three, titled Part Two, contains a detailed budget schedule, by department.

    Children’s Budget

    Pursuant to the provisions of R.S. 46: 2602 the Governor’s Children’s Cabinet is required to make recommendations to the Children’s Budget, which eventually will become a separate section of the General Appropriations Act. The Children’s Budget contains a listing of the services and programs funded by state government for children and their families. Information on the Children’s Budget is available on the Louisiana Legislature’s website.

    LaTrac

    LaTrac is a database that enables the tracking of state government spending. LaTrac provides spending information directly from the general ledger, and as such represents actual historical accounting data presented by fiscal year and cumulative year to date. LaTrac is updated on a monthly basis with the most recent available complete month. At this point in its development, LaTrac contains major categories of spending and more detailed categories under each major category. For example, a major category would be salaries. The breakdown below salaries would be regular salaries, overtime salaries, etc. This data is provided in a statewide, departmental, and agency basis. LaTrac data are available on the Louisiana Government website.

    Legislative Appropriation Acts

    As part of the legislative process, the House and Senate consider four separate appropriation bills and a capital outlay bill. Most the executive branch activities are considered in the general appropriations bill. Funding for the legislature is considered in the legislative appropriations bill. Funding for the courts is considered in the judicial appropriations bill. Funding for internal service funds, auxiliary accounts, or enterprise funds, and certain agencies, institutions and officials is considered in the ancillary appropriations bill. Funding to amend the previous year’s budget is considered in the supplemental appropriations bill All capital outlay items are considered in the capital outlay bill. All bills of the legislature may be tracked on the Louisiana Legislature’s website.

    Louisiana Department of Revenue Annual Tax Collection Report

    The Department of Revenue Annual Tax Collection Report is a statistical document containing the information on the collection of major taxes for the latest five years, monthly tax collections for the most recent year, cash collections after accrual adjustments for the last two years, a fifteen-year cash collection record, a summary of tax collections and refunds by tax-free type. The report also provides, a comparison of taxes in all states by major source, tax collections per capita for all states, total tax collections by state, except severance taxes, tax collections and collections per capita for all parishes, local dedications of hotel/motel collections, various dedications, and data by tax type.

    Louisiana Department of Revenue Annual Tax Exemption Budget

    Section 1517 of Title 47 of the Louisiana Revised Statutes requires the Louisiana Department of Revenue to prepare an annual tax exemption budget. The report includes the following information:

    The Department is able to provide all of the required information except for the costs of administering and implementing each tax exemption.

    Annual Discrete Financial Audits

    The Louisiana Legislative Auditor publishes annual financial audits of every state and local governmental entity, having revenues in excess of $200,000. The reports are available by year, by agency, and by parish and contain audits directly performed by the Legislative Auditor and those performed by certified public accountants retained by the various public entities. These discrete financial audits are not aggregated, in any way, by type of agency. In addition, many of the reporting entities, especially those in the judicial branch, do not provide information on their total funding but only those funds under their direct control. Consequently, the revenues received by most district, city, and parish courts and by the judicial branch agencies from state government and the revenues received by these entities from their respective local governments are generally not reported in the discrete financial audits by each particular court or agency.

    Actuarial Reports

    The legislative actuary, who is part of the Legislative Auditor’s Office, is responsible for providing reports on the actuarial soundness of the state and statewide retirement systems funded in whole or in part, out of public funds. There are thirteen retirement systems, of which four are designated as state systems and nine are designated as statewide systems.

    The four state systems guaranteed by the state constitution are: the Louisiana State Employees’ Retirement System (LASERS); the Teachers’ Retirement System of Louisiana (TRSL); the State Police Pension and Retirement System (STPOL); and the Louisiana School Employees’ Retirement System (LSERS).

    The nine statewide retirement systems are not guaranteed by the state constitution are: the Louisiana Assessors’ Retirement Fund (ASSR); the Clerks of Court Retirement Relief Fund (CCRS); the District Attorneys’ Retirement System (DARS); the Firefighters’ Retirement System (FRS); the Municipal Employees” Retirement System (Plans A & B (MERS); the Municipal Police Employees Retirement System the Parochial Employees Retirement System (Plans A & B (PERS); the Registrars of Voters Employees’ Retirement System (RVRS); and the Sheriffs’ Pension and Relief Fund (SPRF). The latest consolidated actuarial report or the thirteen state and statewide retirement systems was in November, 2007, and covered the 2006 year. Actuarial reports on each system are generally provided annually.

    Judicial Compensation Commission

    The Judicial Compensation Commission was created by Act 1077, Regular Session, 1995, to evaluate salaries payable to judges and to make recommendations to the legislature concerning these salaries. In 2003, the Commission retained Loren C. Scott, and Associates to develop a report on judicial salaries that became the basis of a series of recommendations, spread over time, for raising judicial salaries and bringing judicial pay more in line with the southern average.

    Sources of Information: State Comparative Information

    The Council of State Governments: the Book of the States

    The Book of the States contains essential and hard to find information in easy to read articles, tables and charts. Published since 1935, The Book of the States provides data, articles, and comparisons for all 56 U.S. states and territories. Within The Book of the States, one can find analysis and comparative information on a wide range of topics. The book not only focuses on historical data, but also highlights trends in various state public policy areas.

    Digest of Education Statistics

    The Digest of Education Statistics is a publication of the National Center of Education Statistics. The Digest contains comparative information on direct general expenditures and expenditures on lower and higher education for every state and for the United States as a whole.

    Kaiser Family Fund State Health Facts

    State Health Facts is a project of the Henry J. Kaiser Family Foundation that is designed to provide up-to date and easy to use health and other data on all fifty states. Much of the data are based on federal sources. Some data have copyrights and should be used with permission.

    The National Association of State Budget Officers (NASBO), The Fiscal Survey of the States, the NASBO Annual Expenditure Report, and the NASBO report on Budget Processes in the States

    The Fiscal Survey of States is published twice annually by the National Association of State Budget Officers (NASBO) and the National Governors Association (NGA). The series was started in 1979. The survey presents aggregate and individual data on the states’ general fund receipts, expenditures, and balances. Although the report does not contain the totality of state spending, it does present information on those funds used to finance most broad-based state services. The data presented are the most important elements in determining the fiscal health of the states.

    Separate surveys on total state spending are also conducted annually. The field surveys, on which the report is based, are generally conducted by NASBO from July through November of each year and are completed by state budget officers in all 50 states.

    Forty-six states begin their fiscal years in July and end them in June. The exceptions are Alabama and Michigan, with October to September fiscal years; New York, with an April to March fiscal year; and Texas, with a September to August fiscal year. Additionally, 20 states operate on a biennial budget cycle. The annual expenditure report has many notes that qualify the data collected.

    NASBO also publishes an annual report on Budget Processes in the States.

    The National Center for State Courts

    The National Center for State Courts publishes on its web site an annual Survey of Judicial Salaries, containing the mean, median, range, and rank of judicial salaries for state courts of last resort, intermediate appellate courts, and general jurisdiction courts. The Survey also had sections reporting data state by state and providing explanatory notes.

    The National Conference on State Legislatures (NCSL)

    The National Conference of State Legislators has several publications that compare fiscal and other conditions of state governments. For our purposes here, we wish to highlight the following NCSL publications:

    Other relevant NCSL publications are listed in the Further Reading Section of this issue of the magazine.

    The State Handbook of Economic, Demographic, and Fiscal Indicators

    The State Handbook of Economic, Demographic, and Fiscal Indicators is published biennially by the American Association of Retired Persons (AARP). The Handbook facilitates state-by-state national comparisons of a variety of economic, demographic, and fiscal indicators. The Handbook provides tables and maps of the selected indicators and cites and explains the sources and terminology used. The Handbook also contains local government information, especially on property taxation.

    The Tax Foundation

    The Tax Foundation was founded in 1937 to educate taxpayers about sound tax policy and the size of the tax burden borne by Americans at all levels of government. The Tax Foundation provides annual state and local comparative financial information through standard and special reports.

    United States Bureau of the Census, Census of Governments

    The Census Bureau conducts a census of governments at five-year intervals and an annual survey for the intervening years. The overall census covers government organization, employment, payrolls, and finances. The information on state and local government finances is available in files and viewable tables. The statistics cover government financial activity in four broad categories: revenue, expenditure, debt, and assets. Data are available online from 1992, the latest being 2007. Most of the data in state and local finances report are gathered by a mail canvass of appropriate state government offices that are directly involved with state-administered taxes. Follow-up procedures include the use of mail, telephone and e-mail until data are received. Approximately 80 percent of the reporting units respond to data requests. For those reporting units that do not report, data are compiled by trained representatives of the Bureau of the Census from official state government records resulting in one hundred percent data coverage.

    The statistics are subject to possible inaccuracies in classification, response, and processing. Every effort is made to keep such errors to a minimum through care in examining, editing, and tabulating the data. The tax figures shown are net of refunds. They include amounts of state-imposed taxes collected or received by the state and subsequently distributed to local governments. Locally collected and retained tax amounts are not included in the state government survey. The tax revenue data pertain to state fiscal years that end on June 30, in all but four states. Amounts shown for these four states reflect the different timing of their respective fiscal years, which are the 12-month periods ending on March 31, for New York, August 31, for Texas, and September 30, for Alabama and Michigan. The tax data presented by the Census Bureau may differ from data published by state governments because the Census Bureau may be using a different definition of which organizations are covered under the term, “state government.” In the Census, the term “state government” refers not only to the executive, legislative, and judicial branches of a given state, but also includes agencies, institutions, commissions, and public authorities that operate separately or somewhat autonomously from the central state government but where the state government maintains administrative or fiscal control over their activities as defined by the Census Bureau. For further information on the definition and organization of governments, one should consult the Government Finance and Employment Classification Manual and the 2007 Census of Governments. Comparing taxes across states can be difficult. The Census Bureau’s statistics on tax revenue reflect taxes a state collects from activity within the state, not necessarily from its people within a state. Alaska, for instance, does not have general sales taxes or individual income taxes, but it does collect severance taxes from companies that extract oil and natural gas. Like Alaska, Florida does not collect individual income taxes. Instead, Florida relies heavily on a general sales tax, which is partially supported by visitors from outside Florida. In that sense, both Alaska and Florida collect “exported taxes” – taxes from people or organizations that may reside outside of their state.

    The U.S. Bureau of the Census also publishes, in five-year intervals, information on public education finances. The latest report, published in 2007, contains financial statistics relating to public elementary-secondary education. It includes national and state financial aggregated data for each public school system with an enrollment of 10,000 or more.




    Background



    Introduction

    This section describes and analyzes the finances of the state government of Louisiana by examining its assets, liabilities, revenues, expenditures, and fund balances. Special attention is given to an examination of the financing of the courts and the judicial branch agencies of the state. Because this section includes the use of many technical terms, the reader may wish to consult the glossary at the end of this issue of the magazine. The background section will begin with a description of the state’s accounting system.

    The State Accounting System

    The accounting system of the state comprises the total structure of records, methods and procedures used by accounting professionals to identify, present, classify, and record information on the financial position and operation of governmental units or their funds, account groups, organizational components and used by those accounting professionals to maintain financial accountability. The major records and reports of the accounting system include statements of assets, liabilities, net assets, statements of revenues, expenditures, fund balances, statements of cash flows, types of funds, budget reports, combining and combined reports, explanatory notes, revenue estimates, reports on compensation, retirement systems, group benefits, discrete audits, and audits of federal grants and programs.

    The State Reporting Entity

    The state reporting entity consists of the various departments, agencies, activities, and organizational units that are within the control and authority of the Louisiana Legislature and/or constitutional officers of the state. The state, like that of the United States, has three branches of government – legislative (bicameral), executive, and judicial.

    The basic financial statements of the state government of Louisiana are prepared in conformity with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board (GASB). The State uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements and to assist in the management of its budgetary operations.

    As required by GASB Statement No. 14, “The Financial Reporting Entity,” as amended by GASB Statement No. 39, “Determining Whether Certain Organizations are Component Units”, a legally separate entity is considered to be a component unit of the state if at least one of the following criteria is met:

    1. The state appoints a voting majority of the organization’s governing body and is either able to impose its will on the organization or there is a potential financial benefit/burden to the state.
    2. The entity is fiscally dependent on the state.
    3. The nature and significance of the relationship between the state and the entity is such that exclusion would cause the financial statements of the state to be misleading or incomplete.

    The reporting entity includes the component units of state government.

    Blended Component Units

    Depending upon the closeness of their relationship with the State, some component units are blended with the state reporting entity, while others are discretely reported.

    The following blended component units provide services almost exclusively to the primary government:

    The Discretely Presented Component Units

    The discretely presented component units are reported in separate columns to emphasize that they are legally separate from the State. The voting majority of the following major discretely presented component units’ board members are appointed by the State and the State is able to impose its will on the organizations through budgetary oversight. The discretely presented component units include:

    Related Organizations

    Related organizations are those entities for which the primary government’s accountability does not extend beyond appointing a voting majority of the board. Consequently the State is not financially accountable, and the finances of the related organizations are not reported in the basic financial statements of the State. The related organizations currently include: the Algiers Park Commission; the Allen Parish Reservoir District ; the Ascension-St. James Airport and Transportation Authority; the Associated Branch Pilots of the Port of Lake Charles; the Associated Branch Pilots of the Port of New Orleans; the Bayou Desiard Restoration Commission; the Bayou Lafourche Fresh Water District; the Castor Creek Reservoir District; the Crescent River Port Pilots’ Association; the Ernest N. Morial New Orleans Exhibition Hall Authority; the Fourteenth and Sixteenth Wards Neighborhood Development District; the Grand Isle Independent Levee District; the Greater New Orleans Biosciences Economic Development District; the Greater Ouachita Port Commission; the Jackson Parish Dugdemona Watershed Reservoir Authority; the John K. Kelly Grand Bayou Reservoir District; the Louisiana Airport Authority; the Louisiana Disaster Recovery Foundation, Inc.; the Louisiana Research and Development Council; the New Orleans and Baton Rouge Steamship Pilots’ Association; the Parish Hospital Service Districts; the River Parishes Transit Authority; the River Region Cancer Screening and Early Detection District; the St. Bernard Port Harbor and Terminal District; the St. Mary Levee District; the Seventh Ward Neighborhood Development District; the South Tangipahoa Parish Port Commission; the Southwest Acadiana Parishes Public Housing Rehabilitation District; the Terrebonne Levee and Conservation District; the Twelfth and Thirteenth Wards Neighborhood Development District; and the West Ouachita Parish Reservoir Commission.

    Joint Ventures

    A joint venture is a legal entity or other organization that results from a contractual arrangement and is owned, operated, or governed by two or more participants as a separate and specific activity subject to joint control, in which the participants retain (1) an ongoing financial interest or (2) an ongoing financial responsibility. The purposes of a joint venture are to pool resources and share the costs, risks, and rewards of providing goods or services to venture participants directly, or for the benefit of the general public or specific service recipients. The Sabine River Authority of Louisiana participates equally with the Sabine River Authority of Texas in the Sabine River Compact Administration. Separate financial statements are prepared for the operations of both parties to the Compact. The Compact was created under authority granted by an act of the Congress of the United States to provide equitable apportionment of the waters of the Sabine River and its tributaries. The costs of the Compact are to be paid equally by the two states, which share equally in the costs of the Joint Operation. Each state owns an undivided one-half share of all lands acquired for the project, and each state owns and is entitled to 50% of the water produced and 50% of the power generated by the Joint Operation and may sell, use, or otherwise dispose of its share without consent and permission of the other Authority. The Sabine River Authority of Louisiana’s share of the joint ventures is reported as a discrete component unit in the accompanying basic financial statements.

    Jointly Governed Organizations

    A jointly governed organization is one governed by representatives from each of the governments creating it and in which the participants do not retain an ongoing financial interest or financial burden. Such entities, therefore, are not reported in the basic financial statements of the State. These organizations include the Gulf States Marine Fisheries Commission, the Southern Rapid Rail Transit Commission, the Interstate Commission for Adult Offender Supervision, and the Interstate Commission for Juveniles.

    Caveats

    The most comprehensive financial statements of state government are presented in the CAFR as government-wide reports that provide information on the executive and legislative branches, and some judicial branch finances.

    It should also be noted that the financial information in the CAFR, the Popular Annual Financial Report, and the Supplemental CAFR do not include the self-generated finances of the lower courts (i.e., courts below the appellate level) and the finances of the judicial branch agencies such as the parish clerks of court, the district attorneys, the sheriffs, the coroners, the city marshals, and the justice of the peace constables. These financial documents also do not include the revenues and the costs paid for by local governments on behalf of the lower courts and the judicial branch agencies. Consequently, there is no audited consolidated way to account for all of the revenues of the lower courts and the judicial branch agencies. This is a deficiency that not only affects transparency and accountability but also such other concerns, such as the number and cost of judgeships, district attorney pay, the number and cost of assistant district attorneys, the control of the fund balances held by such entities, and other matters.

    This raises the most basic of questions affecting the finances of the state. What is the state government of Louisiana? Most people would think that state government is that which the Louisiana Constitution defines state government to be. Despite these constitutional provisions, state government operates in practice quite differently in terms of its finances. The finances of the state executive and legislative branches and some of the finances of the judiciary are treated as if they were part of one government, while others are not. The big problem is with the judicial branch where the finances of the lower courts and the judicial branch agencies are not treated as being part of the state government. The self-generated finances of each lower court and judicial branch agency are accounted for in the annual financial audit of each court and judicial branch agency. However, the revenues derived from local government and from state government are not. Moreover, there are no sources of information that aggregate the basic financial statements of each agency and type of agency so that public officials or ordinary citizens can know how much they cost the people of Louisiana individually or, by type of court or agency, or in total. We will elaborate these concerns in the Critical Commentary section of this issue of the magazine.

    Most financial documents are snapshots in time and have different purposes. As a result, data may differ significantly even within a fiscal year depending on the document and the time of issuance of the financial document. Consequently, every effort has been made in this issue of the magazine to report data from the same sources when discussing specific areas of concern.




    Governmental Funds


    The Major Funds

    The major governmental funds of the State are the general fund, the bond security and redemption fund, and the Louisiana education quality trust Fund. In addition, the State also has proprietary funds and fiduciary funds.

    The General Fund

    The general fund is the principal operating fund of the State and was established administratively to provide for the distribution of funds appropriated by the State Legislature for the ordinary expenses of state government. Transactions related to resources that are not accounted for in other funds are accounted for in the general fund. Revenues are provided from the direct deposit of federal grants and the transfer of state revenues from the bond security and redemption fund after debt service requirements have been met.

    The Bond Security and Redemption Fund

    This fund is used to provide for the collection of all money deposited into the state treasury except federal funds, donations or other forms of assistance when the terms and conditions of the related agreements require otherwise. Each fiscal year, an amount is allocated from this fund sufficient to pay all obligations secured by the full faith and credit of the state, due and payable, within the current fiscal year, including principal, interest, premiums, and sinking or reserve funds. The money remaining in the bond security and redemption fund is credited to the general fund, except as otherwise provided by law.

    The Louisiana Education Quality Trust Fund

    The Louisiana education quality trust fund uses the revenues received from the federal government from mineral production or leases on the outer continental shelf for various purposes aimed at improving the quality of education in Louisiana.

    Proprietary Funds

    Unemployment Trust Fund

    This fund accounts primarily for the unemployment contributions from employers for the payment of unemployment benefits to eligible claimants.

    Fiduciary Funds

    By definition, these funds account for assets held by a governmental unit in a trustee capacity or as an agent for individuals, private organizations, other governmental units,and/or other funds, and cannot be used to address activities or obligations of the government. There are four types of fiduciary funds:

    Pension Trust Funds

    Pension trust funds account for resources held in trust for members and beneficiaries of the four employee pension plans. Four separate pension trust funds are maintained for state government employees, teachers, and law enforcement officers. The pension funds are as follows: Louisiana School Employees’ Retirement System; the Louisiana State Employees’ Retirement System; the Louisiana State Police Retirement System ; and the Teachers’ Retirement System of Louisiana.

    Investment Trust Funds

    Investment trust funds account for the portion of the government’s investment pools that belong to others. The Louisiana Asset Management Pool is the only investment trust fund of the State.

    Private Purpose Trust Funds

    Private-purpose trust funds report all other trust arrangements benefiting those outside the government. Currently, the Louisiana Education Tuition and Savings Fund is the only private-purpose trust fund Louisiana maintains.

    Agency Funds

    Agency funds contain resources held by the government in a temporary, purely custodial capacity and do not involve measurement of results of operations. Among the largest of the agency funds are the Escrow Fund, Insurance Trusts, Payroll Clearing Fund, and the Miscellaneous Agency Funds.

    Among the agency funds are:

    The Budget Stabilization Fund

    The fund was created in 1998 to restructure and rename the revenue stabilization mineral trust fund (rainy day fund). The money in the fund is derived from several sources including twenty-five percent of non-recurring revenues, money available for appropriation from the state general fund, funds in excess of certain expenditure limits, and mineral revenues in excess of the established cap. Money in the fund is not available for appropriation except under specific conditions specified in the enabling legislation.

    Capital Outlay Escrow Fund

    This fund was established in 1974 to provide for the capital outlay expenditures of the State as appropriated in the annual capital outlay appropriations act. The fund accounts for a large volume of ongoing and new construction, routine maintenance and repairs, as well as repairs and renovations related to the damage caused by hurricanes Katrina and Rita.

    Coastal Protection and Restoration Fund

    This fund was created in 1989 to provide a dedicated, recurring source of revenues for the development and implementation of a program to protect and restore the coastal area of Louisiana.

    Louisiana Medical Assistance Trust Fund

    This fund was established in 1992 to assists in the operation and maintenance of the Medicaid program in the State. In fiscal year 2008, transfers out amounted to $502 million and transfers in were $149 million.

    Louisiana Mega-Project Development Fund

    This fund was created in 2007 to finance all or a portion of economic development mega-projects which may be necessary in order to successfully secure the creation or retention of jobs by a business entity.

    Patients’ Compensation Fund

    This fund, established in 1988, is used to assist medical malpractice claimants.

    Support Education in Louisiana First Fund

    This fund was created in 2001 to provide salary increases for public school certificated personnel and classroom teachers, and post secondary education faculty.

    Transportation Infrastructure Model for Economic Development (TIMED)

    This fund was established in 1989 to be used exclusively for specific road and bridge projects with portions designated for the Port of New Orleans and the New Orleans International Airport.

    Transportation Trust Fund

    This fund, established in 1989, was created to receive the excess revenues on gasoline, motor fuels, and special fuels taxes. Purposes of the fund include highway construction and maintenance, statewide flood control, and ports and airports priority programs, among others.

    Video Draw Poker Device Fund

    This fund was created in 1991 to receive revenues collected by the Gaming Division of the Office of State Police for fees, fines, penalties, and all other monies collected from video poker devices.




    Assets, Liabilities, and Net Assets, FY 2008


    The overall financial position and results of operations of state government are summarized in the government-wide annual balance sheet of assets, liabilities, and net assets. Assets are economic resources having monetary value. Liabilities are debts that are owed. Net assets are the difference between assets and liabilities. Unrestricted net assets are assets that are not dedicated or reserved for specific purposes.

    The government-wide balance sheets in the CAFR report three types of activities: governmental activities, business-type activities, and primary government activities, which are a combination of the governmental and business-type activities. Governmental activities are mostly supported by taxes and federal grants. Most services normally associated with state government fall within this section. Business-type activities are those that recover all or a significant portion of their costs through user-fees and charges paid by the external users of the goods and services of these business-type activities. The component units are legally separate organizations that are financially accountable to state government.

    In FY 2008-2009, the CAFR reported that the primary government, which includes only the governmental and business-type activities of state government, had approximately $34.9 billion of total assets, $13.7 billion of total liabilities, and $21.2 billion of total net assets, of which $6.8 billion were restricted and $1.62 billion were unrestricted.

    The FY 2008 balance sheet of the component units of state government had approximately $9.2 billion of assets, $5.1 billion of liabilities, and $4.1 billion of net assets.

    In FY 2008, the general fund of the state had $4.5 billion of assets, $2.9 billion of liabilities, and a fund balance of $1.6 billion of which $792,567 million was unreserved and undesignated.

    According to the Louisiana Constitution, surpluses in the general fund can only be used for capital construction, the retirement or defeasement of debt, payment against the accrued liability of the public retirement systems or deposit into the budget stabilization fund, deposit in the coastal protection restoration fund, or for new highway construction for which federal matching funds are available.

    Change in Assets, Liabilities, and New Worth

    In FY 2008, net assets increased by 5% from the previous year. Unrestricted net assets for governmental activities increased 80%, and unrestricted net assets for business-type activities increased 4%.

    General fund assets increased from $1.8 billion in FY 1994 to $4.5 billion in 2008, an increase of about 150%%. Liabilities increased from $1.2 billion in FY 1994 to $2.9 billion in FY 2008, an increase of 142%.

    Revenues, FY 2008

    Revenues in the Louisiana Comprehensive Annual Financial Report (CAFR) are divided into revenues relating to governmental activities and revenues relating to business-like activities. Both of these general types of revenues are further subdivided into program revenues and general revenues. Program revenues are subdivided into charges for service, operating grants and contributions, and capital grants and contributions. General revenues are subdivided into income taxes, sales and use taxes, other taxes, and other revenues.

    In FY 2008-2009, the CAFR reported total revenues of approximately $29.6 billion, of which $28.8 billion related to governmental activities and $762. 3 million related to business activities. In that same year, CAFR reported the revenues of the component units to be $1.8 billion and the revenues of the general fund to be $13.4 billion.

    It should be noted, once again, that the CAFR and all other state government financial documents, except the discrete financial audits, do not include the self-generated revenues of the lower courts and the judicial branch agencies, nor do they include the revenues provided by local governments to the lower courts and judicial branch agencies of state government. Consequently, there is no consolidated way to account for all of the revenues of the lower courts and the judicial branch agencies of state government.

    To offset the deficiency noted above and to present information in more detail than is provided in the CAFR, we have combined the information for FY 2008 from various Louisiana state and local government reports to create , a composite revenue picture of reported estimates and my own estimates of unaudited information. This information is presented in the subsection on judicial branch finances.

    Change in Revenues, FY 1994-FY 2008

    The February 18, 2009 Revenue Estimating Conference forecast of available general fund revenue in FY 2008-2009 was $9.4 billion, which was down from the prior year forecast, probably because of the decline in oil revenues and the effects of national recession. The FY 2008-2009 Revenue Estimating Conference forecast that taxes, licenses and fees were down 7.6% statutory dedications were down 2.2%, and general fund revenues were down 8.1%. The forecast reported that annual revenue increases greater than $15 million included mineral bonuses which were up 105.55% and insurance excise premium license taxes which were up 4.7%. The same forecast reported that revenue losses in individual income taxes (10.7%), severance taxes (21.3%%, mineral royalties (18.9%, vehicle sales taxes (5.7%, corporate income and franchise taxes combined (1.6%, (interest income (20.5%) , sales taxes (.8%), motor vehicle licenses (21.2%) and riverboat gaming (4.5%).

    During the period from FY 1994 to FY 2008, total revenues grew from $11.6 billion in FY 1994 to $28.8 billion in FY 2008, a growth rate of 148.3%. General fund revenues grew from $4.6 billion in FY 1994 to $13.4 billion in FY 2008, an overall increase of 191.4% and an annual increase of about 13%, with the highest growth occurring between FY 1998 and FY 2003.

    Expenditures, FY 2008

    Expenditures in the FY 2008 Louisiana Comprehensive Annual Financial Report (CAFR) are divided into expenditures relating to governmental activities and expenditures relating to business-like activities. Governmental activities are divided into the following categories: general government; culture, recreation, and tourism; transportation and development; public safety; health and welfare; corrections; youth services; conservation and environment; education; other; intergovernmental and interest on long-term debt. Business expenditures include the unemployment trust fund and other special funds. In FY 2008-2009, the CAFR reported total expenditures of $28.4 billion for the primary government, i.e., including governmental and business-type activities. In that same fiscal year, the CAFR reported that the expenses of the component units were approximately $6.1 billion and general fund expenses were $25.6 billion.

    Discretionary and Non-Discretionary Expenditures

    Louisiana distinguishes discretionary from non-discretionary expenditures. Non-Discretionary expenditures are those that are:

    In FY 2008, about $13.3 billion of total expenditures or about 38.7% was non-discretionary and about $4.9 billion or half of the general fund was non-discretionary.

    Change in Expenditures, FY 1994-FY 2008

    Total expenses grew from $24.7 billion in FY 2007 to $28.4 billion in FY 2008, a change of 13.02% and total expenses grew from approximately $10.9 billion in FY 1994 to $28.4 billion in FY 2008, a change of 160.6%. General fund expenditures grew from $9.6 billion in FY 2007 to $25.6 billion in FY 2008, a change of approximately 166.8%.

    Fund Balances

    The ending fund balance of the general fund in FY 2008-2009 was $1.6 billion. This amount constituted about 7.3% of general fund revenues.


    Budgets and Budgetary Accounting

    Legislation requires that on or before November 15, the head of each spending agency submit to the Governor, the Joint Legislative Committee on the Budget, and the Legislative Fiscal Office an estimate of the financial requirements and receipts of the budget unit for the upcoming fiscal year (RS 39:33). The Governor is required to prepare an executive budget and transmit a copy to each member of the Legislature on the first day of the regular session (RS 39:37). The budget is enacted into law by the Legislature and sent to the Governor for signature.

    The State Constitution prohibits the passage of an unbalanced budget (Article VII, Section 10). The Governor may veto any line item appropriation, subject to legislative override. RS 39:73 authorizes the transfer of funds between programs within a budget unit. The Commissioner of Administration may approve such a transfer when, in aggregate, the transfers are not more than 1% of the total appropriation to the budget unit and sufficient evidence is presented. The Commissioner, with the approval of the Joint Legislative Committee on the Budget, may approve the transfer of funds between programs within the budget unit when, in aggregate, the transfers do not exceed 25% of the total appropriation to the budget unit and sufficient evidence is presented. These and other requests for transfers are submitted by the budget unit to the Legislative Fiscal Office.

    According to RS 39:111, the Governor is required to submit to the Legislature, no later than the eighth day of the regular session, a proposed five-year capital outlay program. The Legislature enacts into law a bill incorporating the first year of the five-year capital outlay program. The Legislature adopts a concurrent resolution for the remaining four years of the five-year capital outlay program, itemizing the capital projects and the amount and source of funding for each of the subsequent four years.

    According to RS 39:77, in no event shall any budget unit commit to an expenditure in excess of the unencumbered balance of the allotment to which the resulting expenditure would be charged, without prior approval of the Interim Emergency Board and two-thirds of the Legislature. The Revenue Estimating Conference has been established to provide an official estimate of anticipated state revenues for each fiscal year. Appropriations by the Legislature from the state General Fund and dedicated funds for any fiscal year shall not exceed the official forecast in effect at the time the appropriations are made. The Governor may direct the Commissioner of Administration to reduce or disapprove warrants in order to prevent a cash deficit.

    In accordance with RS 39:82(A), agencies are allowed 45 days for closing out prior year activities. This statute limits the use of appropriation balances after the June 30 close to true liabilities, delineates those items eligible for roll forward treatment, and establishes a 45-day period to request such carry-forwards. After that time, all appropriations lapse, except permanent capital outlay appropriations that remain active until the projects are complete. Additionally, upon approval by the Commissioner of Administration, any federal funds and any state funds appropriated during a fiscal year specifically for matching federal grants may be carried forward into the upcoming year's appropriation. Governments are required to present the original, final, and actual budgetary basis of the general fund and each individual major special revenue fund that has a legally adopted budget. These and all monies from self-generated revenues are available for expenditure in the amounts appropriated. The Commissioner of Administration may approve increases from self-generated revenues, not exceeding in aggregate 5% of appropriated self-generated revenues. Only with the approval of the Division of Administration and the Joint Legislative Committee on the Budget will any larger increase in self- generated revenue over the amount appropriated be available to agencies for expenditures.

    Funding for the state is considered by the legislature in four appropriations bills (the general, legislative, judicial, and ancillary appropriation bills), and in the capital outlay bill. The bills authorize funding for the state government and for other purposes upon enactment.

    The annual budget of the legislature is prepared by the Legislative Budgetary Control Council. The Council is a joint legislative committee that was created to establish rules and regulations govern expenditures of the legislative branch, prepare and submit legislative requests, review and approve legislative requests, and prepare and submit financial statements pertinent to the legislative budget process (see R.S. 24:38).

    The annual state-funded budget of the courts is prepared by the Judicial Budgetary Control Board, a thirteen-member board appointed by the Supreme Court and chaired by an associate justice of the Supreme Court. The duties of the Board are to review and approve budgetary requests from the courts, prepare financial statements, authorize the transfer of funds, set purchasing procedures, approve certain contracts, recommend travel and office expenses, and perform other financial services on behalf of the court system (see Supreme Court Rule 24:38.1).

    In FY 2008, the legislature appropriated a total of $33.4 billion for state governmental expenses. The general appropriations act was about $29.9 billion; the ancillary appropriation act was about $1.8 billion; non-appropriated requirements were about $531.7 million; the judicial appropriation act was $143.9 million; the legislative appropriation act was $86.6 million; and capital outlay was $990.3 billion. Approximately $9.7 billion was appropriated for the general fund.




    Judicial Branch Finances


    Supreme Court

    The Supreme Court is funded by the annual judicial appropriation act and by self-generated revenues from the Court’s fee accounts, the fee account of the Judicial College, the fee accounts of the Law Library of Louisiana, interest income, and other self-generated sources. Most of the Court’s total funds – about 94%-- is derived from the appropriation. The finances of the Supreme Court are complex because the Court is responsible for receiving and managing the appropriated funds not only for its own internal needs but also for many of the needs of the courts of appeal, the district courts, the city and parish courts, and a number of programs specified in the judicial appropriation act. Furthermore, the judicial appropriation act usually contains provisions allowing the Court to roll over remaining unexpended or unencumbered funds from year to year. In addition, the Judicial Budgetary Control Board has the authority to approve the transfer of funds within the Court system as needed.

    The Supreme Court and other entities in the judicial branch are recipients of federal funds, which, for our purposes here, are included as self-generated income throughout this section of the magazine.

    Chart 1 The Finances of the Supreme Court, in FY 2008-2009, were as follows:

    Appropriated Revenues $64.7 Million
    Non-Appropriated Revenues $2.4 Million
    Total Revenues $67.1 Million
    Appropriated Expenses $78.3 Million
    Non-Appropriated Expenses $2.5 Million
    Total Expenses $80.8 Million
    Total Fund Balance $28.6 Million

    (Sources: FY 2008 Judicial Appropriation Act; and FY 2008 Financial Audit of the Supreme Court).

    The Courts of Appeal

    Like the Supreme Court, the courts of appeal are funded primarily by the annual judicial appropriation act through the Supreme Court. In FY 2008-2009, the five courts of appeal received collectively from the appropriation about $40,329,998. This amount paid for the salaries of the fifty - three judges of the courts of appeal and for the operations of the courts. The funding was distributed as follows: 1st Circuit Court of Appeal - $9,165,211; the 2nd Circuit Court of Appeal - $5,046,875; the 3rd Circuit Court of Appeal - $7,608,304, the 4th Circuit Court of Appeal - $6,962,630; and the 5th Circuit Court of Appeal - $5,250,141.

    In addition to the funds appropriated by the legislature through the judicial appropriations act, the courts of appeal also generated from their collective fee accounts about $982,672 in FY 2008. The revenues generated by each court were as follows: 1st Circuit - $203,736; 2nd Circuit - $140,700; 3rd Circuit- $169,708; 4th Circuit – $163,296; and the 5th Circuit-$297,474. In FY 2008, total expenses of the five courts were collectively about $32.9 million, leaving a collective total fund balance of $5.3 million.

    (Sources: FY 2008 Judicial Appropriations Act; FY 2008 Financial Audits of the Courts of Appeal.)

    District Courts

    The district courts are funded by a combination of state, local, and self-generated funds. The state pays:

    In FY 2008-2009, the judicial appropriation act provided a total of $38.2 million for the district courts. The state government also supported, through the Supreme Court, most of the funding for the district courts’ drug courts, the Families in Need of Services (FINS) programs, and the Court Appointed Special Advocates (CASA) programs. (Source: FY 2008 Judicial Appropriation Act).

    Local governments pay for a large part of the operations of the district courts and for the maintenance and operations of the facilities used by the district courts. This local support is generally derived from three sources: general funds, criminal court funds and special taxes that are levied for such purposes.

    The criminal court funds are usually shared with the district attorneys. Under the provisions of R.S. 15:571.11, the sheriff of each parish is required to collect all conviction fines in criminal cases and prosecutions for violations of state law or parish ordinances and all fines and forfeitures imposed by district courts and district attorneys, except for forfeitures of criminal bail bonds placed by commercial securities. After retaining 12% of such funds as a collection fee for his own sheriff’s general fund and after remitting an additional 12% of such funds to the district attorney, the sheriff deposits the remainder of such funds into the treasury of the parish in a special criminal court fund. Upon motion of the district attorney and approval of the district court, such funds may be used to defray the expenses of the criminal courts of the parish. The expense may include those relating to recording and transcribing the proceedings of the felony trials of indigent persons, the preparation of records in the appeals in such cases, the petit and grand jury, witness fees, the attendance of the sheriff and clerk of court, the parish law library, and other expenses enumerated in the statutes.

    The amount of local funding provided to the district courts is not known and is very difficult to estimate. The financial audits of the local governments generally lump their general fund appropriations to the courts and judicial branch agencies into one line item called “judicial. In addition, the allocations of criminal court fund revenues, generally between the district attorney and the court, are not always specified, and the data are never aggregated by amount and type of recipient.

    The district courts also have revenues from several self-generated sources, including judicial expense funds, 5% child support fees, indigent transcript fees, court reporter fees, misdemeanor probation fees, criminal court costs, federal funds, and interest income. District courts also share in the revenues from bond fees and bond forfeitures with district attorneys and other judicial branch agencies.

    The authority for the collection of civil fees and criminal court costs for the various judicial expense funds of the general jurisdiction district courts is provided in R.S. 13:991 -13:996. The revenues derived judicial expense funds are required by law to be deposited and managed in an account separate from all other accounts maintained by the district courts. Under the applicable statutes, this separate account is referred to by various names – judicial expense fund, judicial clerk fund, or the district court fund. The monies deposited in such funds may be used for certain designated purposes as well as for “any purpose or purposes connected with, incidental to, or related to the proper administration of the court or the offices of the individual judges, except the payment of the salaries of judges. Sometimes the judicial expense fund, however it is the overall name used by district courts to refer to that fund in which they maintain their self-generated revenues – the revenues under their direct control. Sometimes, however, the judicial expense fund is distinguished from special funds, such as the adult and juvenile drug court funds, the commissioner fund, the misdemeanor probation fund, the FINS fund, and the child court fund, which is sometimes called the hearing officer fund, or the domestic relations fund.

    District courts are also financed, in part, by the forfeiture of commercial surety bonds collected by the prosecuting district attorney. Upon collection, the district attorney distributes the funds as follows: 30% to the district attorney; 25% to the criminal court fund of the parish in which the bond was posted; 25% to the sheriff of the parish where the bond was posted; and 20% to the indigent defender program for the parish where the bond was posted.

    District courts also receive bond premium fees. Criminal bail-bond premium fees are assessed against criminal bail bonds underwritten by commercial sureties. The fee is equal to two dollars for each one hundred dollars worth of liability underwritten by the commercial surety. The fee is collected by the sheriff of the parish, in which the bond is underwritten, and is then distributed generally as follows: 25% to the judicial court fund or its equivalent; 25% to the sheriff's general fund; 25% to the district attorney's operating fund; and 25% to the indigent defenders program.

    Some district courts have misdemeanor probation programs that charge a court cost or fee for placing convicted misdemeanor defendants on probation. The court cost or fee is used to support the cost of the probation office and the court.

    District courts, like other judicial agencies, also generate revenues from a number of other miscellaneous sources, including federal funds and interest and dividend income. The total finances of the district courts are practically impossible to determine because of the way in which local funds and self-generated funds are reported. However, to present some sense of scale, we know that in FY 2008-2009 the finances reported in the discrete financial audits of the district courts, finances that primarily consisted of self-generated revenues, indicated that the general funds of the district courts had collectively about $33.3 million in revenues, about $30.7 million in expenses and about $29 million in fund balances. Total self-generated revenues, expenses, and fund balances were significantly higher than those in the general fund.

    Based upon known data and projected data, we estimate that the total general revenues and the general fund balances of the district courts in FY 2008 were approximately:

    Chart 2 District Court Finances, FY 2008 (In Millions)

    State Local Self-Gen Total Gen. Fund Balances
    $38.2 $58.1 $33.3 $129.6 $29.0

    (See Chart 11 for Summary, Notes and Assumptions)

    City and Parish Courts

    The parish and city courts are financed by a combination of state, self-generated, and local revenues.

    State government pays part of the salary of the judge of the Ascension Parish Court and a portion of the salaries of the city court judges. Local governments pay for part of the salaries of the judges and for either all or part of each court’s operations. Self-generated revenues generally pay for most of the operational costs of the courts either indirectly through the city or parish’s budget process or directly as a supplement allowed by the city or parish to be retained for the use of the court.

    In FY 2008-2009, the state government paid each city court judge and the judge of the Ascension Parish Court approximately $36,544 as a state salary. For some reason, the judges of the First and Second Parish courts in Jefferson Parish are not paid a state salary. In FY 2008-2009, the state paid salaries to the judge of the Parish Court of Ascension and to the city court judges which totaled $2,521,581. The state government, through the Supreme Court, also provided a few city courts with funding to support their FINS, Drug Court, and CASA programs.

    The municipal governments and the parishes of Ascension and Jefferson paid a local salary to their respective judges and paid for the operations and court facilities through their local budget process or by allowing their respective courts to retain self-generated revenues for their operations and for judicial salaries. The aggregate amount of funds paid by local government to city and parish courts is not known.

    Most city and parish courts are allowed by their municipalities to retain either all or a portion of their self-generated revenues to pay for operations and for judicial salaries. City and parish courts collect filing fees, copy fees, court reporter fees, criminal court costs, fines, and witness fees. Typical expenses include salaries for the judge, the clerk of court and the clerk’s staff, the court administrator and the administrator’s staff, law clerks, secretaries, travel, continuing legal education, and the general costs of operations.

    In total, the FY 2008-2009 discrete financial audits of the city and parish courts indicated that these courts had aggregate revenues of about $29 million, expenses of about $27 million, and fund balances of about $16 billion.

    There are no published sources that provide an accurate aggregate picture of all city and parish court financing.

    We estimate that the total general revenues and fund balances of the city and parish courts in FY 2008 were about:

    Chart 3 City and Parish Court Finances, FY 2008 (In Millions)

    State Local Self-Gen Total Gen. Fund Balances
    $2.5 * $29.2 $31.7 $16.3

    (See Chart 11 for Summary, Notes and Assumptions)

    * Local funds included in self-generated column

    Justices of the Peace

    Justices of the peace are financed from local, state, and self-generated revenues.

    Local governments provide a local salary that, under state law, may never be less than $30 per month. The actual local salaries of the justices of peace are much higher averaging about $3,505 per year’ Justices of the peace also receive a state salary of $100 per month, contingent upon attendance at annual training course sponsored by the Attorney General (see R.S. 49:251.1 and R.S. 13:2591).

    Most justices of the peace have self-generated revenues, which they derive from civil cases relating to moveable property not exceeding $5,000 of value and from cases involving landlords and tenants (Code of Civil Procedure Art. 4911-4912). Justices of the peace also receive contempt of court fees in civil(CCP Art. 4914, fees for performing marriages, (R.S. 9:203), fees for notarial work, (R.S. 13:2586.1.

    Very few justices of the peace have total revenues greater than $15,000.

    We estimate that the total revenues of all justices of the peace in FY 2008 were:

    Chart 4 Justice of the Peace Finances, FY 2008

    State Local Self-Gen Total Gen. Fund Balances
    $466,800 $1,363,570 $752,382 $2,582,758 $0

    (See Chart 11 for Summary, Notes and Assumptions)

    Mayors Courts

    The mayors courts are financed exclusively from self-generated revenues, unless, from time to time and rarely, expenses exceed revenues in which case the local government makes up the difference. The mayors courts derive most of their self-generated revenues from fines and court costs imposed on persons found guilty of local ordinance offenses, such as parking, traffic, and litter violations.

    We have no published sources that aggregate the total revenues, expenses, and fund balances of the mayor’s courts.

    We estimate that the revenues of all mayors courts in 2008 were about $4.5 million (See Chart 11 for Summary Notes and Assumptions).




    Parish Clerks of Court


    The elected parish clerks of court receive most of their operating income from self-generated revenues. Most of these revenues are derived from civil filing fees, copy costs, the recordation of mortgages, conveyances, and notarial records, criminal court costs, supplemental compensation fees, birth and other certificates, licenses and permits, federal and other grants, interest income and other sources.

    Parish clerks of court also receive some funds from their local parish governments primarily through the general funds of their local governments but sometimes from criminal court funds and other revenues. For example, the Clerk of the Criminal Court in Orleans Parish receives most of his revenues from the local government..The local governments also provide and maintain the facilities in which the parish clerks of court are located.

    The clerks of court receive some funds from the state to pay for the costs of some elections. Under the provisions of R.S.18:1400.4 et seq., the state is required to pay the election expenses of the clerks of court and the parish boards of election for gubernatorial, congressional, and presidential elections. The state is also required to pay half of the cost of local municipal, elections, or local tax, bond, or debt propositions.

    In FY 2008-2009, the clerks of court had collectively self-generated revenues of about $152 million, expenses of about $148 million, and fund balances of about $96 million.

    We estimate the total general revenues and general fund balances of the clerks of court in FY 2008 were as follows;

    Chart 5 Finances of Parish Clerks of Court (In Millions)

    State Local Self-Gen Total Gen. Fund Balances
    $1.6 $4.0 $151.6 $156.0 $96.0

    (See Chart 11 for Summary, Notes and Assumptions)

    Sheriffs

    The sheriffs are funded by local ad valorem taxes for law enforcement and for the operations and construction of jails. Sheriffs also receive revenues from state funds, local governments, and self-generated sources.

    Local ad valorem taxes for law enforcement and for jail operations are the largest sources of funds for sheriffs.

    The state provides funding for supplemental law enforcement pay and for the housing of state prisoners in local jails after conviction. The state also pays a portion of state revenue sharing for general operations and for retirement benefits.

    In FY 2008-2009, the sheriffs of the state collectively received $40.million in state law enforcement supplemental pay that benefited 7,976 officers. The sheriffs also received state funds for housing state adult prisoners and juvenile offenders and for managing the adult local work release program. The state paid about $130.8 million for housing state adult prisoners; $6.1 million for housing juvenile offenders, and $22.1 million for managing the adult local work release program.

    The sheriffs receive a large share of their funds from local government for juvenile and adult detention and jail operations, court attendance, bailiff services, and the transportation of prisoners. In FY 2008, local governmental contributions to sheriffs were about $88.5 million.

    Most of the revenues of sheriffs are self –generated in the sense that those funds are under their direct fiscal control. As collectors of ad valorem and often sales taxes within every parish except Orleans, sheriffs receive tax collection fees expressed as a percentage of the yield of each type of tax for each type of tax recipient entity. Such entities include the parish governments, some municipal governments, local and state districts, and local school boards. Sheriffs, except in Orleans Parish, receive a 12% fee from the yield of the fines collected in their respective parishes. Twelve percent of the remainder of the yield of the fines are then provided to the district attorney of the district in which the parishes were located. The remainder, after the sheriffs and district attorney deductions, is placed in each parish’s criminal court fund. Each sheriff also receives funding from a portion of the criminal court costs assessed by each district court in criminal and traffic proceedings.

    Sheriffs also receive fee income from service of process in civil cases and from special notices in cases involving property seizures. In criminal cases, sheriffs generally provide service without charge to the party or to the public parties involved in the case. In some districts, however, courts pay the sheriffs for such service. Sheriffs receive fees from the court-ordered seizures and sale of moveable and immoveable properties. They also receive funding from bond forfeitures and from the drug or special asset forfeiture program. The drug or special asset forfeiture program was established in accordance with the Seizure and Controlled Dangerous Substance Property Forfeiture Act of 1989 (R.S. 40:2600). The assets involved in the program consisted of seized property and money seized during controlled substances cases. If not rightfully claimed, such funds were subject to forfeiture by declaration of the courts. Upon judicial determination of forfeiture, the district attorney is allowed to:

    If the assets are sold, they are divided by court order first to satisfy any security interest or lien, and then as follows: 60% to the law enforcement agency seizing the asset; 20% to the Criminal Court Fund; and 20% to the district attorney’s general fund. The funds are intended to enhance drug law enforcement.

    Sheriffs are also major recipients of federal funds from the Department of Justice and the Department of Homeland Security.

    The sheriffs generally use several funds to account for their finances, the largest being their general funds. Other special funds that are used include: construction funds; inmate funds; jail or detention funds; tax collection funds; homeland security funds; bond funds; civil funds; and other non-major funds.

    In FY 2008-2009, the sheriffs, including those in Orleans Parish, had aggregate revenues in their general funds of approximately $992.9 million. In that same year, the aggregate expenses of all sheriffs were about $965.8 million, and their general fund balances were about $387.7 million. These finances were only general fund finances. The finances in the sheriff’s special funds were significantly lower, except for those special funds for jail operations and construction.

    We estimate that the total general revenues and general fund balances of all sheriffs in FY 2008 were:

    Chart 6 Finances of the Sheriffs, FY 2008 (In Millions)

    State Local Self-Gen Total Gen. Fund Balances
    $158.9 $85.6 $992.9 $1,237.4 $387.7

    (See Chart 11 for Notes and Assumptions)

    District Attorneys

    The funding of the district attorneys is derived from state, local government, and self-generated revenues.

    The state pays each district attorney a state salary and part or all of the salaries of 568 assistant district attorneys recommended for state funding by the state commission created for that purpose. In addition, the state also pays all or part of the salaries of approximately 61 victims’ assistance coordinators. About five district attorneys receive funds from the Supreme Court to manage the Families in Need of Services (FINS) programs in their areas.

    In FY 2008-2009, the state appropriated $29.6 million for the district attorneys throughout the state. Each district attorney received a state salary of $50,000. Each assistant district attorney, recommended by the commission received a state salary or warrant of $45,000; and each victim coordinator received a state salary of $32,622.

    Local governments provide funding to their district attorneys through their general and criminal court funds, and sometimes through special taxes. In addition, the parish school boards and governing authorities of the parishes of Iberia, St. Mary, and St. Martin contribute annually to the district attorney serving as their local counsel. The aggregate amount of funding provided by the local governments to the district attorneys is not available in any published source primarily because each local government tends to lump together its contributions to the judicial branch agencies of their parish in one line item labeled “judicial”. In addition, the discrete audit reports of the district attorneys generally omit the contributions made by the local and state governments to their funding and the way in which the criminal court funds are divided is not always specified.

    District attorneys generally receive self-generated funds from the following sources: a percentage of criminal fines, criminal court costs, bond forfeitures, bond fees, worthless checks, drug asset forfeitures, and interest income. In addition, most district attorneys are recipients of federal IV-D (child support enforcement) revenues from the Louisiana Department of Social Services, and recipients of federal Byrne, VAWA, JAIBG and other revenues from the U.S. Department of Justice through the Louisiana Commission of Law Enforcement (LCLE). One of the most important federal sources is the IV-D program which provided district attorneys collectively about $17.9 million in FY 2008.

    The district attorneys, like other agencies, use several funds to maintain and account for their finances. Among these funds are the general fund and several special funds, including the IV-D fund, the worthless check fund, the misdemeanor probation fund, the pre-trial diversion or intervention fund, the victims assistance fund, the TASC or truancy fund, the families in need of services or FINS fund, the criminal court fund, the drug court fund, and several other non-major funds. The largest of these funds is the general fund.

    The self-generated funds are reported in the annual discrete financial statements of each district attorney. Some of these reports indicate that the district attorney is a component unit of the parish for reporting purposes. Others state or imply that the district attorney is a primary reporting entity. In these reports, it is not always clear why they are regarded one way or another.

    In FY 2008-2009, the general fund finances reported by the various district attorneys indicated that collectively the district attorneys had revenues of about $77.8 million, expenses of about $69 million, and fund balances of about $40.8 million. The total finances of the district attorneys were significantly higher than the finances accounted for in the general fund. The discrete financial reports indicated that, in that same year, the total funds of all of the district attorneys reported about $109.7 million in revenues, about $140.2 million in expenses, and about $65.6 million in fund balances.

    The finances reported in the financial reports, however, do not present a complete picture of the resources available to the district attorneys for their salaries and operations. Many of the financial reports of the district attorneys contain statements that the expenditures of the district attorney paid out of the funds of the criminal court, the parish council or police jury, or the state are not included in the audits, thus rendering a total accounting very difficult and practically impossible to determine with certainty.

    We estimate that the total general revenues and general fund balances of the district attorneys in FY 2008 were about:

    Chart 7 Finances of the District Attorneys, FY 2008 (In Millions)

    State Local Self-Gen Total Gen. Fund Balances
    $40.0 $60.8 $78.9 $179.7 $40.9

    (See Chart 11 for Summary, Notes and Assumptions)

    Coroners

    Coroners generally receive most of their funding from their respective local governments. In accordance with R.S. 33:1556(B) the local governments are supposed to pay for all “necessary or unavoidable expenses of the coroners as certified by the coroners as being unavoidable." In most situations, the pay and operating expenses of the coroner are a matter of negotiation and agreement between the coroner and the parish government. In at least two parishes (Jefferson and St. Tammany, the coroner is the beneficiary of a dedicated millage that funds the coroner’s salary and operations. Because of the ambiguity of the statutory language, several lawsuits have been filled over the years regarding coroner pay and operational support.

    There are no readily available sources of information that reports the amount and type of revenues provided by local governments to coroners.

    In addition to the funding from their local governments, coroners also receive revenues from the following self-generated revenues: fees for mental examinations prior to commitment, criminal court costs, fees for forensic investigations, viewing bodies, performing autopsies, performing laboratory tests, assisting physicians in interdiction and commitment, and performing medical examinations. Coroners are also recipients of income from bail bond fees, and interest income.

    The individual financial audits are generally required to provide information on the finances of the coroners, but most coroners do not file audit reports, either because their revenues are below the limit required by the Legislative Auditor to be reported, or because their revenues are reported as part of the audits of their local governments.

    On the basis of the twelve audits that have been reported, the finances of the coroners in FY 2008-2009 were about $8.1 million in revenues, about $10.3 million in expenses, and about $16.2 million in fund balances.

    We estimate that the total revenues and general fund balances of the coroners in FY 2008 were:

    Chart 8 Finances of the Coroners, FY 2008 (In Millions)

    State Local Self-Gen Total Gen. Fund Balances
    $0 $11.6 $10.3 $21.9 $16.2

    (See Chart 11 for Summary, Notes and Assumptions)

    City Court Marshals and Constables

    Marshals and city court constables are financed mostly by self-generated income, local city revenues, and, in some cases state supplemental pay.

    The self-generated revenues of the marshals and constables. are derived primarily from service of process, the seizure and sale of property as ordered by the city court, and , the service and enforcement of warrants.

    The city government pays for some of the expenses of the marshals through its annual budget processes primarily from revenues received from the city court. The aggregate amount of revenues paid by local governments to marshals is not known.

    Some marshals are eligible to receive state supplemental pay but the number and the amount are not specified in the general appropriation act.

    In FY 2008-2009, the financial audits of the city marshals and constables, when combined, indicated that their finances from self-generated, some local governments, and state supplemental pay sources were about $13 million in revenues, $12 million in expenses, and $8 million in fund balances.

    We estimate that the total revenues and general fund balances of the marshals and city court constables in FY 2008 were:

    Chart 9 Finances of the City Court Marshals and Constables, FY 2008 (In Thousands)

    State Local Self-Gen Total Gen. Fund Balances
    $58 $2,500 $13,000 $15,500 $7,800

    (See Chart 11 for Summary, Notes and Assumptions)

    Justice of the Peace Constables

    Justice of the peace constables are financed by state, local government, and self-generated revenues. Most constables, like justices of the peace, are one-person operations and do not have staffs or contract personnel to assist in the performance of their duties.

    Police juries in parishes having populations over 5,000 are required to pay constables and justices of the peace a salary that is not less than $30 per month (33:1702). Some statutes require constables not to be paid less than $75 per month. Probably most constables are paid at least $200 per month or about $3,500 per year.

    Justice of the peace constables receive supplemental law enforcement pay from the state of $100 per month or $1,200 per year. This pay is contingent upon attendance at an annual training course sponsored by the Attorney General (see R.S. 13:2591 and R.S. 49:251.1), if funds are available.

    Constables are also authorized to supplement their salaries by charging fees in civil matters, for serving process, the court-ordered the seizure and sale of property, and for serving and enforcing warrants, and garnishments.

    In FY 2008, we estimate the total revenues of the justice of the peace constables were as follows:

    Chart 10 Finances of the Justice of the Peace Constables, FY 2008

    State Local Self-Gen Total Gen. Fund Balances
    $466,800 $1,363,576 $752,383 $.2,582,758 NA

    (See Chart 11 for Summary, Notes and Assumptions)

    Summary, Notes and Assumptions

    Based on known and estimated revenues, the total general revenues and general fund balances of the courts and judicial branch agencies in FY 2008 were about as follows:

    Chart 11 Judicial Branch Finances: Summary, Notes and Assumptions, FY 2008 (In Millions)

    Government Body State Local Self-Gen Total Gen. Fund Balances
    Supreme Court $64.711 $0 $2.422 $67.1 $28.622
    Courts of Appeal $40.31 $0 $.9853 $41.3 $5.33
    District Courts $38.21 $58.14 $33.35 $129.6 $29.05
    City/Parish Courts $2.51 $06 $29.27 $31.7 $16.37
    J.P. Courts $.4678 $.1.49 $.810 $2.6 $011
    Mayors Courts $0 $0 $4.512 $4.5 $0
    Clerks of Court $1.613 $4.014 $151.615 $156.0 $96.015
    Sheriffs $158.916 $85.617 $992.918 $1,237.4 $387.719
    District Attorneys $40.020 $60.821 $78.922 $179.7 $40.923
    Coroners $024 $11.625 $10.326 $21.9 $16.227
    Marshals $.05828 $2.529 $13.030 $15.5 $7.731
    J.P. Constables $.46732 $1.429 $.833 $2.634 $035
    Total $347.2 $288.9 $1,353.2 $1,926.8 $531.7

    Notes

    1. Derived from FY 2008 Judicial Appropriation Act;

    2. Derived from FY 2008 Financial Audit of the Supreme Court.

    3. Derived from FY 2008 financial audits of the courts of appeal added together.

    4. Estimated from a sample of FY 2008 police jury and parish government financial audits. Includes general funds, criminal court funds, jury and witness attendance funds. Excludes funding for FINS and drug courts and CASA; Assumes that total general funds and criminal court funds are 40% of the funds listed in the audit, except in parishes where such revenues are known. Adjustments are made to reduce double counting of local and self-generated revenues.

    5. Derived from FY 2008 financial audits of the district courts.

    6. Assumes that local government contributions are ultimately derived from a mix of city and parish court revenues, regardless of which contributions are actually derived from governmental funds or from self-generated funds.

    7. Derived from FY 2008 financial audits.

    8. State pay for justices of the peace are $100 per month or $1,200 per year. Assumes 389 justices of the peace..

    9. Assumes that local revenues are based on local pay for justices of the peace. Local pay is based on a sample of JP courts from the FY 2008 financial audits that indicate an average local pay of $3,505 per judge per year.

    10.Self-generated revenues of justices of the peace based on a sample of JP courts, having average self-generated revenues of approximately $1,934 per judge per year..

    11. Assumes that the fund balances of the justices of the peace are negligible.

    12. Based on a conviction base of 150,000 defendants of ordinance violations each paying about $30 per conviction in court costs. The conviction base is calculated by dividing the amount of funds remitted to the Supreme Court from mayors courts for the CMIS project.

    13. Derived from the FY 2008 receipts paid by the Secretary of State to clerks of court for elections in that year.

    14. Estimated from FY 2008 fiscal audit data of police juries, parish governments, and the City of New Orleans.

    15. Derived from FY 2008 financial audit reports of the clerks of court.

    16. Derived from the FY 2008 General Appropriations Act reporting revenues for supplemental law enforcement pay, the housing of adult and juvenile prisoners, and the supervision of the work release program.

    17. Estimated from a sample of FY 2008 police jury financial audits, primarily reporting revenues to the sheriffs for the support for detention and prisoner care.

    18. Derived from the FY 2008 financial audits.

    19. Derived from the FY 2008 financial audits.

    20. Derived from the FY 2008 General Appropriations Act reporting revenues to the district attorneys for the state pay of district attorneys and the support of assistant district attorneys and victim assistance coordinators.

    21. Estimated from a sample of financial audits of parish governments and the City of New Orleans supplemented by data from parish budgets. Adjusted for double-counting of local and self-generated data.

    22. Derived from the FY 2008 financial audits of the district attorneys.

    24. Assumes that coroners do not currently receive state revenues.

    25. Estimate based on a sample of the financial audits of the police juries and parish governments.

    26. Derived from the FY 2008 financial audits of the coroners.

    27. Derived from the FY 2008 financial audits of the coroners.

    28. Based on the supplemental pay received by marshals from the state.

    29. Estimated based on the financial audits of city and parish governments.

    30. Derived from the FY 2008 financial audits of the city court marshals and city court constables.

    31. Derived from the FY 2008 financial audits of the city court marshals and city court constables.

    32. Assumes 389 constables all receiving a monthly state salary of $100 per month or $1,200 per year.

    33. Based on a sample of local constable pay derived from the FY 2008 audits. Assumes 389 constables, having an average local pay of $3,402 per constable per year.

    34. Based on a sample of constable revenues derived from the FY 2008 financial audits indicating average revenues of $1,929 per constable per year.

    35. Assumes that the fund balances of the justices of the peace are negligible.

    Please also note that the general revenues of the above entities exclude the revenues, that are maintained in fiduciary or other special funds. The total revenues of several judicial branch agencies are higher than reported here.




    Compensation

    Introduction

    The State of Louisiana compensates its employees in a variety of ways in exchange for their services. The compensation generally includes salaries, perquisites, and other benefits. Salaries are defined usually as compensation that counts toward retirement. It may include supplemental compensation and eligible housing allowances. Perquisites include use of automobiles and sometimes drivers, the use of public facilities as residences, and payments covering the cost of expenses. Other benefits include pension benefits, retirement options, deferred compensation, health insurance and life insurance, vacation, sick leave and annual benefits.

    Executive Branch Salaries

    The salaries of executive branch elected officials in Louisiana are not published in the CAFR, the budget documents, the appropriation bills, or any official state source. However, information is available through secondary sources such as the Washington State Citizens’ Commission on Salaries (2006), and the Council of State Government’s Book of the States (2008).

    According to the 2008 Book of the States, the salaries of Louisiana’s executive branch elected officials were: Governor-$130,000; Lieutenant Governor - $115,000; Secretary of State - $115,000; Attorney General - $115,000; Treasurer - $115,000; and the Commissioner of Agriculture - $115,000.

    The salaries of non-elected officials, such as department heads and key administrative personnel, ranged from about $99,000 to about $134,000. According to the Louisiana Department of Civil service, the average salary of a classified (civil service) worker) was $39,616 in 2008. The average salary of an unclassified worker was $59,246.

    Legislative Branch Salaries

    According to the National Conference of State Legislators, Louisiana legislators received a base annual salary of $16,800 and a per diem rate based on the federal rate, which in FY 2008 was $143 per day.

    In addition to their salaries, Louisiana legislators receive other benefits. They are eligible to vest in Lasers, the state’s retirement system, to earn credit from other public retirement systems, and to transfer their retirement benefits from other retirement systems, if eligible. State legislators are also eligible for group benefits, such as health insurance, life insurance, and deferred compensation.

    It is difficult to compare the compensation of Louisiana legislators to other states for a variety of reasons. Some states only provide salaries to their legislators and not per diem rates. Per-diem rates vary greatly. States vary in terms of the length and frequency of sessions and the amount and type of fringe benefits.

    With respect to salaries, Louisiana legislators ranked 23rd among the states paying legislative salaries and its per-diem rates were lower than Alabama, Kentucky, and South Carolina. Legislative salaries in Louisiana have not increased since 1980 and per diem rates have not kept pace with inflation. In FY 2006, the Louisiana Compensation Review Commission estimated legislative per diem rates were about $6,000 per legislator, making legislative salary and per diem compensation about $22,800 per legislator per year. In that same year, the Louisiana Compensation Review Commission recommended a 12% cost of living increase and the folding of the per diem into the new salary level. It also recommended annual cost-of-living increases be established by law. The recommended legislation did not pass. In 2008, the legislature proposed increasing legislative salaries to about $70,000 -- a proposal; that was so roundly criticized that that it had to be vetoed by the governor, even though he indicated that he would sign the legislation if passed.

    Judicial Branch Salaries

    Salaries of the Appellate and Trial Courts and Their Personnel

    Judicial salaries in Louisiana are paid from multiple sources. The salaries of supreme court justices, the courts of appeal judges, district court judges, including the juvenile and family court judges are paid in large part by state appropriations through the judicial appropriation act based on the recommendations of the Judicial Compensation Commission (R.S. 13:42 et seq.).

    The Judicial Compensation Commission was created by Act 1077, Regular Session, 1995, to evaluate salaries payable to judges and make recommendations to the legislature concerning these salaries. In 2004, the Commission recommended that the actual salaries of the justices and judges of the Supreme Court, the courts of appeal, and the district courts be increased by 4-1/2%, 4-6/10%, and 4-9/10%, respectively, each year on July 1, 2008, July 1, 2009, and July 1, 2010, subject to an annual appropriation for such purposes. The Commission also recommended that the state-paid actual salary of city court and parish court judges be increased by 4-9/10% each year on July 1, 2008, July 1, 2009, and on July 1, 2010, subject to an annual appropriation for such purposes.

    These judicial salaries are supplemented by payments from the Judicial Supplemental Compensation Fund (R.S. 13:10.3), which provides supplemental funding to the supreme court justices, the court of appeal, judges the district courts, and the city and parish courts judgers from civil filing fees derived from the respective courts and clerks of court. The filing fee, which adjusts annually according the federal Consumer Price Index, pays each Supreme Court justice, court of appeal judge, and district court judge an equal amount, after deductions are made for the fund’s expenses and for the retirement benefits of each justice and judge. . Each city and parish court judge (1st and 2nd Jefferson Parish Court judges excepted) receive an amount that is in the proportion to that their current state-paid salary bears to the current state-paid salary of a district court judge.

    In accordance with R.S. 13:103, the justices of the Supreme Court are reimbursed for reasonable housing and other expenses while on financial duty. These expenses are paid out of the self-generated funds provided by the Supreme Court’s fee account and provide each justice $1,500 per month for a total of $10,500 per justice per year.

    In 2008, the Survey of Judicial Salaries, published by the National Center for State Courts, reported judicial salaries in Louisiana, as of December 31, 2007, for the following positions: Supreme Court chief justice $138,000; Supreme Court associate justices - $131,000; Courts of Appeal – $124,000; District Courts - $118,000; Parish Courts - $70,000; and City Courts- $37,000 (state salary only).

    The Survey also reported that the average pay of the chief justice, the associate justices, the intermediate appellate judges and the district court judges of the state courts of the nation were: court of last resort chief justice- $150,850; court of last resort associate justices -$145,194; judges intermediate courts of appeal - $141,263; and general jurisdiction trial court judges - $130,533. The average salaries of trial court judges below the above stated levels were not provided.

    In FY 2008-2009, judicial salaries in Louisiana with supplements were: $161,816 – chief justice; $154,967 – associate justices; court of appeal chief judges - $136,704; court of appeal judges - $130,194; district judges - $124,085; city court judges - $39,373; Monroe City Court - $39,373; Shreveport City Court - $39,313; and the Ascension Parish Court - $73,782. (For some reason, the state salaries of the judges of the Jefferson First and Second Parish Courts are not paid by the state but by the Parish of Jefferson.)

    The salaries of the city and parish court judges are derived from state, local government, and self-generated revenues. The total salaries of city and parish court judges are capped so that they cannot exceed district court salaries. The judges in many city courts work an unspecified amount of time on judicial duties and, because they are considered part-time, are allowed to practice law. The city and parish court judges who are required by law not to have private practices are located in: the Ascension Parish Court (1 judge); the Jefferson Parish 1st Parish Court; (2 judges); the Jefferson 2nd Parish Court (2 judges); the Houma City Court (1 judge); the Lafayette City Court (2 judges); the Monroe City Court (3 judges); the New Orleans First City Court, (3 judges); the New Orleans 2nd City Court (1 judge); the senior judge of the New Orleans Municipal Court (1 judge); the senior judge of the New Orleans Traffic Court (1 judge ); and the Shreveport City Court (4 judges ).

    The portion of the total salaries of city court judges that is derived from local governmental and self-generated funds is not known.

    The Salaries of Justices of the Peace and Their Personnel

    The salaries of the justices of the peace are derived from local, state, and self-generated revenues.

    Police juries in parishes having populations over 5,000 are required to pay justices of the peace and their constables a salary that is not less than $30 per month (33:1702). In St. Landry Parish, the police jury is required to pay each of their constables and justices of the peace no less than $100 per month (R.S. 33:1702.2. R.S. 13:2589) provides that, in lieu of charging fees in criminal matters which is prohibited by law, constables and justices of the peace may receive from their respective local governing authorities no less than $75 per month which shall not be in addition to the minimum local salary provided in R.S. 33:1702.). Based on a sample of salaries from a number of parishes. The average local salary of a justice of the peace is about $3,000 per year.

    Justices of the peace are also paid a state salary that may not exceed$ 100 per month and is contingent upon the availability of funds and attendance at an annual training course sponsored by the Attorney General (R.S. 13:2591(A).

    Justices of the peace may also supplement their state and local salaries from self-generated revenues that they receive in small civil matter, notarial work. and from performing marriages.

    We do not have specific information on the total salaries of justices of the peace.

    Salaries of Parish Clerks of Court and Their Personnel

    The salaries of parish clerks of court are derived primarily from self-generated funds. R.S. 13: 782 allows parish clerks of court to set their own rates of annual compensation payable out of their salary funds provided they shall not exceed the following levels: parishes with less than 50,000 population - $88,000; parishes with populations between 50,000 and 200,000 -$98,000; and parishes over $200,000 - $108,000. These levels are based on the U.S. Bureau of the Census Federal-State Cooperative Program for Population Estimates. In Plaquemines Parish, the parish government is authorized by state law to pay the clerk of court such additional compensation for its services at it may deem necessary. The statute also provides a minimum of $900 per month for a clerk’s salary.

    The salaries of deputy clerks of court and other personnel in the offices of the clerks of court are derived primarily from self-generated funds. There are no published sources of salaries or calculations of average salaries for deputy clerks of court and other personnel in the offices of the clerks of court.

    Salaries of District Attorneys and Their Personnel

    The salaries of district attorneys are derived from state, local, and self-generated funds. The state pays an annual salary of $50,000 per year. There are no published reports on the amount of pay provided by local governments and self-generated income to district attorneys. Unlike other elected officials, total district attorney pay is not capped, allowing the district attorneys to pay themselves whatever state, local, and self-generated revenues and state law allow. R.S. 16:14 provides quite unambiguously, that there shall be no restriction, limitation or ceiling placed on the amount of additional salary that may be paid to a district attorney by the governing authorities of the several parishes of the state.

    In 2009, because of the relatively large turnover of district attorneys (14) the Louisiana District Attorneys’ Association (LDAA) voted to adopt non-binding salary guidelines for their members. The guidelines take into consideration such factors as experience, size of office, number of assistants, and number of terms served. The range is set at $120,000 to $198,000. For example, a district attorney in his first term of office with one to four assistants under his supervision would draw a salary of $120,000-$$134,000, whereas a district attorney in his fourth term of office with sixty professional employees would make between $182,000 and $198,000 according to the guidelines. The guidelines do not mandate these levels of pay. District attorneys are free to obtain salaries from whatever sources they are legally able receive. Likewise, the amount of self-generated revenue or revenue from the local government may not enable a particular district attorney to reach the level of pay recommended by the guidelines. A few enterprising newspapers have reported on the actual pay for the following district attorneys in their respective areas: the 1st judicial District (Caddo) - $150,000; the 39th judicial district (Red River) - $105,000; and the 42nd judicial district (Desoto) - $132,000.

    The salaries of assistant district attorneys and victims’ assistance coordinators are derived primarily from state funds, supplemented by revenues from local governments and self-generated revenues. The state pays $45,000 for each of the 579 state-authorized assistant district attorney and about $35,000 for each of the 61 state authorized victims’ assistance coordinators. We have no published reports on either the total number of employees of the district attorneys or on their salaries or average salaries.

    The number of state-authorized assistant district attorneys is based on the recommendations of the Advisory and Review Commission on Assistant District Attorneys. The members of the Commission are the Judicial Administrator of the Supreme Court, the speaker of the House or his designee, the president of the senate or his designee, the chair of the House Judiciary Committee, t he chair of the Senate Committee on the Judiciary B, the president of the Louisiana District Attorneys Association, and the executive counsel of the governor.

    Salaries of Sheriffs

    The salaries of sheriffs are derived primarily from local and self-generated revenues. R.S. 33:1421 provides that sheriffs may establish their own rates of annual compensation, provided that such rates do not exceed the following amounts based on the latest decennial federal census: population greater than 400,000 – same as judges in Orleans Criminal District Court ($124,058 in FY 2008-2009); 400,000 or less - $20,000 less than salaries of sheriffs with populations greater than 400,000 ($104,058 in FY 2008-2009). The statute also provides that, in addition to all other forms of compensation, each individual sheriff’s shall be granted ten percent of his annual compensation as an expense allowance.

    The salaries of the deputy sheriffs and other personnel in the offices of the various sheriffs are primarily derived from state, local, and self-generated revenues. The state provides supplemental pay to 7,976 deputy sheriffs at a total cost of $40,401,000, an amount that equates to about $5,065 per deputy sheriff. There are no other published sources of the salaries of deputy sheriffs and other personnel in the offices of the sheriffs. The active members of the sheriffs’ pension and relief fund who were deputy sheriffs were about 12,770 employees in 2006.

    Salaries of Coroners and their Personnel

    The pay of coroners is primarily derived from self-generated funds, parish and, in some cases, municipal revenues. In accordance with R.S. 33:1556(B) the local governments are supposed to pay for all “necessary or unavoidable expenses of the coroners as certified by the coroners as being unavoidable”. In most situations, the pay and operating expenses of the coroner that are paid by the local governments are a matter of negotiation and agreement. In at least two parishes (Jefferson and St. Tammany, the coroner is the beneficiary of a dedicated millage that funds the coroner’s salary and operations. Because of the ambiguity of the statutory language regarding local governmental pay, lawsuits have been filled over the issue of pay and operating expenses.

    The pay of coroners and their personnel are derived, in large part, from self-generated revenues received from investigations, viewing bodies, performing autopsies, providing testimony in court, issuing papers in interdictions and mental health commitments, court costs, examinations into unexpected deaths, final examinations after death, and in support of other agencies and officials.

    Salaries of City Marshals/Constables and Their Personnel

    The salaries of city marshals are derived primarily from self-generated revenues, city government funds, and, in some cases, state supplemental law enforcement pay. The only statutory limits on the salaries of marshals are those imposed by local governments on a negotiated basis, subject to the legal minimums established in law. In parishes outside of Orleans, some city marshals receive salaries from their local governments that may not fall below a certain minimum (R.S. 13:1883, 13:2485.9, 13: 2488. 5413:2488.62). Otherwise their salaries are negotiated with their respective governing authorities. In Orleans Parish, the constables have a salary and expense fund, composed of all fees collected by the constables, from which all salaries, including the salaries of the constables, may be paid (R.S. 33:1736).

    Deputy marshals and other personnel are paid from the same sources as marshals. Some statutes set minimum pay amounts for the deputy marshals serving some city courts. Some deputy marshals also receive state supplemental pay. In the town of Jackson, the state Department of Corrections pays the salaries of two deputy sheriffs.

    We do not know the amounts of pay provided to marshals, deputy marshals and to other city court personnel.

    Salaries of Justice of the Peace Constables and Their Personnel.

    The salaries of the justice of the peace constables are derived from local parish governments, state government, and self-generated revenues.

    Police juries in parishes having populations over 5,000 are required to pay constables and justices of the peace a salary that is not less than $30 per month (33:1702). In St. Landry Parish, the police jury is required to pay each of their constables and justices of the peace no less than $100 per month (R.S. 33:1702.2. R.S. 13:2589 provides that, in lieu of charging fees in criminal matters -- which is prohibited by law-- constables and justices of the peace may receive from their respective local governing authorities no less than $75 per month, which may not be in addition to the minimum local salary provided in R.S. 33:1702.) The local salaries of constables vary greatly among the parishes and range from under $1,000 annually in Franklin and Winn Parishes to over $18,000 in Jefferson Parish. The average local salary of a constable is about $3,000.

    Justice of the peace constables also receive supplemental pay of $100 per month from the state. State pay is contingent upon attendance at an annual training course sponsored by the Attorney General and the availability of state funds (see R.S. 13:2591 and R.S. 49:251.1.

    Constables are also authorized to supplement their salaries by charging fees in civil matters through service of process, the court-ordered seizure and sale of moveable property under $5000 in value, and the service and enforcements of warrants.

    Most constables operate one-person operations, so that the number of personnel, other than the constable, is negligible.

    Retirement Systems

    There are thirteen retirement systems, of which four are designated as state systems and nine are designated as statewide systems. The four state systems are guaranteed by the Louisiana Constitution and are considered part of state government. The four state systems are: the Louisiana State Employees’ Retirement System (LASERS) ; the Teachers’ Retirement System of Louisiana (TRSL); the State Police Pension and Retirement System (STPOL); and the Louisiana School Employees’ Retirement System (LSERS).. All four systems use the accrual basis of accounting for operating income and operating expenses.

    The unfunded level, i.e., the percentage of funding needed to make the system actuarially sound, is provided in the following Chart:

    Chart 12 Pension Systems

    System Active Retired % UAL
    LASERS 57,811 40,624 65.8%
    TRSL 81,347 68,953 70.3%
    STPOL 996 1,192 72.4%
    LSERS 57,811 40,624 65.8%
    TOTAL STATE 153,233 123,120 69.4%
    ASSR 671 513 73.4%
    CCRS 2,152 992 76.3%
    DARS 654 238 108.4%
    FRS 3,534 1,640 86.4%
    MERS A 4,879 2,997 83.3%
    MERS B 2,016 884 88.6%
    MPERS 5,769 4,067 87.4%
    PERS A 12,836 5,908 97.3%
    PERS B 1,987 639 108.3%
    RVRS 205 151 91.6%
    SPRF 12,835 3,188 86.8%
    STATEWIDE TOTAL 47,508 21,215 89.0%
    TOTAL ALL SYSTEMS 200,741 144,335 73.15%

    To address unfunded liability, all pension systems are required as of FY 1988-1989, to make annual payments, as determined by a formula for each system, generally 4% per year, for forty years until each system is actually sound.

    Louisiana also has a separate system for the Louisiana Lottery Corporation, a system established in 1993 with all employees eligible except those who elect coverage under a state retirement plan and those who are either independent contractors or leased employees. In addition, almost all full-time employees of state government are eligible to participate in a Supplemental Retirement Plan and in deferred compensation plans.

    Group Benefits

    The System offers eligible plan members the opportunity to participate in comprehensive healthcare coverage. Employees hired before January 1, 2002, pay approximately 25% of the cost of coverage (except single retirees under age 65 pay approximately 25% of the active employee cost). All members who retire on or after July 1, 1997, must have Medicare Parts A and B in order to qualify for reduced premium rates. Employees also receive life insurance benefits. Retirees generally pay 50 cents for each $1,000 of coverage. Most employees are also able to participate in the state’s deferred compensation program.

    Perquisites

    In addition to their salaries and their retirement and group benefits, some employees of state government receive perquisites in the form of housing, housing allowances, take-home vehicles, security, access to drivers and the state police helicopter, travel expenses, and other traditional emoluments of office. For example, as part of his perquisites, the governor is entitled to live in the mansion, has round-the- clock security for himself and his family, has daily meals prepared, in the mansion, has drivers and use of the state police helicopter, and other traditional emoluments. Other state officials, to a lesser degree, also have perquisites of office.




    CRITICAL COMMENTARY

    Introduction

    This section will include an analysis of several aspects of the finances of the state government of Louisiana. This section will analyze in a cursory manner the constitutionally defined structure of Louisiana government and the impact of that structure on state government finances. It will also indicate and analyze several concerns regarding judicial branch finances, accountability and transparency, and the state’s system of compensation. It will conclude with an analysis of the finances of Louisiana as compared to that of the nation as a whole, and to Alabama, Kentucky, and South Carolina–southern states that have populations about the same size as Louisiana.

    The Structure of State Government

    The finances of state government in Louisiana are, primarily influenced and determined by the structure of state government as defined by the Louisiana Constitution, state law, and traditional attitudes and practices of the governance system

    The Louisiana Constitution of 1974 defines state government as consisting of three branches - executive, legislative, and judicial - each having separate powers (Article I, Sections 1 and 2).

    The Constitution provides that the executive branch consist of the governor, the lieutenant governor, the secretary of state, the attorney general, the treasurer, and the commissioner of insurance, and all other executive branch officers, agencies and instrumentalities of the state (Article IV, Section 1). It provides that, except for the offices of the governor and the lieutenant governor, all other instrumentalities of the executive branch and their functions, powers, and duties shall be allocated according to function within not more than twenty departments (Article IV, Section 1). It provides authority to the legislature to reorganize and reallocate the functions, powers, duties, and responsibilities of all departments, offices, agencies, and other instrumentalities of the executive branch, except those specifically allocated by the Constitution (Article I, Section 1; Article IV, Section 20, and Article XIV, Section 6).

    It provides for the legislative branch and enables the legislature to propose amendments to the constitution by joint resolution, concurred in by two-thirds of the elected members of each legislative house, for consideration and approval by the electorate (Article XIII, Section 1). It may also, by two-thirds of the elected members of each house, call for the creation of a constitutional convention to consider and propose a new constitution or revisions to the existing constitution for consideration and approval of the electorate (Article XIII, Section 2).

    The Constitution provides for a judicial branch, consisting of:

    Article V of the Constitution provides that the legislature has the authority to define the number of Supreme Court justices and their respective districts as well as the number of judges and circuits of the courts of appeal (Article V, Sections 3, 4, and 9). The legislature also has the authority, to establish, divide, or merge existing judicial districts with approval in a referendum in each district and parish affected (Article V, Section 15(8). The legislature may also change the number of judges in each district court by approval of two-thirds of the elected members of each house (Article V, Section 15 (C).

    The legislature may also by law abolish or merge trial courts of limited and specialized jurisdictions (Article V, Section 15). The Constitution also allows the legislature to change the civil and criminal district courts; the city, municipal, traffic and juvenile courts; the clerks of the civil and criminal courts; the civil and criminal sheriffs; the constables and clerks of the first and second city courts; the register of conveyances and the recorder of mortgages (Article V, Section 32).

    The Constitution provides for local government primarily in Article VI. It provides for parishes and municipalities in Sections 1-4, and for their home rule charters and plans of government in Sections 4-8). It provides for local school boards, special districts, levee districts, port commissions and districts, and other local political subdivisions (Article VI, Sections 9-44). It provides in Sections 5 and 6 that home rule charters of municipal and parish governments are specifically prohibited from having any provisions affecting a school board or the offices of district attorney, sheriff, assessor, clerk of a district court, or coroner in ways inconsistent with the Constitution or laws of the state Article VII, Section 9, the Constitution requires all monies received by the state or by any state, board, agency, or commission, with specified exceptions, to be deposited immediately upon receipt in the state treasury.

    The Louisiana Constitution appears to provide a relatively clear framework for understanding the structure and components of state government and for distinguishing state from local government. Based on an ordinary reading of these provisions, we estimated in the previous issue of this magazine that the state government in Louisiana, as of FY 2008-2009, consisted of approximately 1,836 elected officials. Nineteen of these officials were located in the executive branch; 144 in the legislative branch, of which 39 were senators, and 105 were representatives; and 1,673 in the judicial branch of which 1,005 were judges and 677 were other elected officials in the judicial branch.

    The executive branch of state government consisted of 20 departments, organized hierarchically into about 600 sub-departmental units of government. The legislative branch had about 39 units of government, including the house and senate members, their respective officers, standing committees and staffs, and their shared staffs. The judicial branch consisted of 744 courts and 5 different types of judicial branch agencies, including 42 district attorney offices, 69 offices of elected clerks of court, 65 sheriffs' offices, 49 offices of city marshals, and 388 offices of justice of the peace constables. Each of the courts and judicial branch agencies had several different types of departments, divisions, offices, or sub-department units for which there was no common source of information.

    All together, there were approximately 115,773 employees serving state government in FY 2008. This estimated number included 93,118 officials and employees in the executive branch, 655 officials and employees in the legislative branch, and 22,000 officials and employees in the judicial branch. The massive and cumbersome structure of state government, affects finances in several ways. It requires the people of Louisiana to pay more for the operations of its state government than do the people in the nation as a whole and in comparable southern states having similar population sizes. In addition, the costs of this large, complicated structure spill over and affect local government, which is required by state law to pay for a large portion of the operational costs of state government. The costs of state government are particularly evident in the manner in which the courts and the judicial branch agencies are structured and financed.

    Judicial Branch Financing

    In the Background Section of this issue of the magazine, we presented an overview of judicial branch financing in Louisiana in which we concluded that its development was not a result of rational policy planning and implementation but rather the aggregation over time of political accommodations, ad hoc arrangements, and the maintenance of the English traditions of structural governance.

    The current system of judicial finance, if one can call it a system, has many problems that have consistently been mentioned but consistently ignored for years (see bibliography, paragraph on judicial finances). Louisiana citizens pay a large price for this massive, outdated judicial structure and set of processes. The total cost of this financing is huge. In FY 2008, these entities had revenues from state government exceeding $300 million and self-generated revenues exceeding one billion dollars. Local parish and municipal governments are required by state law to pay for a large part of these costs, even though, their home rule charters and plans of government do not provide for these responsibilities and the Constitution prohibits them from having provisions in their charters affecting these entities. The state mandates local governments to bear a large part the costs of these entities, which, reduces the ability of local governments to meet the primary responsibilities required under their respective charters.

    The over-reliance of the judicial branch on self-generated revenues is also harmful. It requires users of the court system to pay comparatively high filing fees and criminal court costs creating in some cases problems with access to justice and fairness. It requires violators of relatively minor traffic offenses to pay an inordinate amount of these costs regardless of whether they go to court or not. It contributes to inequalities of funding among the various lower courts and judicial branch agencies, with some being ”relatively rich” and others being “relatively poor” in an overall context where financial need often bears no resemblance to revenue availability. It creates negative incentives by inducing local stakeholders to compete for limited resources instead of working together for the common good. It promotes redundancy and thereby impairs efficiency, effectiveness, and equity in the delivery of judicial branch services. It encourages the hoarding and hiding of finances. It prevents greater uniformity in the administration of justice. It makes transparency and accountability difficult and reduces the public's faith in the efficacy of government.

    The current financial “system” also enables courts and judicial branch agencies to accumulate large fund balances, which, in many courts and agencies are greater than 50% of their revenues. When viewed collectively, these fund balances easily exceed $500 million. The monies contained in these fund balances, if centralized as the Constitution appears to require, could reduce the need for general funding of the judicial branch as well as provide significant additional revenues to meet the state’s needs for human development.

    Among the reasons why judicial branch financing is so different from the financing of the executive and legislative branches is that the lower courts and the judicial branch agencies, despite the framework of governance provided by the Constitution, are generally regarded and treated as local agencies. The lower courts and judicial branch agencies are included in local budget processes as if they were local governmental departments. State law requires many of these agencies to comply with the provisions of the Local Government Budget Act, (R.S. 39:130et seq.), which requires them to prepare and have available for public review their budgets. Many judicial branch agencies are treated in the audit reports as component units of their local governments, while others are regarded as primary reporting entities. None, however, are regarded as component units of the state.

    Consequently, the finances of the lower courts and judicial branch agencies are not included in the state’s Comprehensive Annual Financial Report (CAFR). The reporting entity of the CAFR is supposed to consist of the various departments, agencies, activities, and organizational units that are within the control and authority of the legislature and/or the constitutional officers of the state. Note A of the CAFR acknowledges that, like the United States, the state government of Louisiana has three branches, legislative, executive, and judicial. The CAFR then cites Statement No. 14, as amended by Statement No. 39 of the Governmental Accounting Standards Board (GASB), that provides a three-fold test for determining which legally separate organizations are to be considered component units of state government and, therefore, whose finances are to be reported with those of the state. To be a component unit of the reporting entity, one of the following tests should be met:

    Depending upon the closeness of their relationship with the state, the GASB standards allow some legally separate organizations to be blended with the state reporting entity, while others are discretely reported. Among the units of government that are evaluated to be blended organizations, are the Louisiana Lottery Corporation, the Office of Facilities Corporation, and numerous other parts of the executive branch of state government accounted for in the CAFR but almost all of the judicial branch is not. In light of the previously presented GASB standards, it is difficult to understand why the finances of the lower courts and the judicial branch agencies are excluded completely from the CAFR. Is not the judicial branch part of state government? Do not all courts and, at least some of the judicial branch agencies, receive a large share of their revenues from the state or from state authorized charges, just like executive departments? Is not the state able to impose its will on these courts and agencies, just as it is able to impose its will on executive branch agencies?

    Would not the state and the people of Louisiana derive many benefits if it had audited information on all sources of funding of the courts and the judicial branch agencies? Is not the exclusion of the finances of the lower courts and the judicial branch agencies misleading and incomplete? Why is there no information that would report the total finances of the courts and judicial branch agencies?

    Why is judicial branch financial information not presented in aggregate formats by type of agency and by source of revenue to provide a more complete financial picture of the state’s finances? Why are the lower courts and judicial branch agencies allowed by the legislature to retain from year to year their fund balances, despite the provisions of Article VII, Section 9.

    Surplus Judgeships

    In the last issue of this magazine, we presented several indicators that strongly suggested that Louisiana has a surplus of trial court and appellate court judgeships. Based on data from the Judicial Council of the Supreme Court, the trial courts may have a surplus of at least 34 judgeships. Based on 2006 data from the Court Statistics Project, a collaboration of the Conference of State Court Administrators, the National Center for State Courts, and the Bureau of Justice Statistics, Louisiana had the second highest number of general jurisdiction trial court judges per 100,000 people in the nation. The data from the Court Statistics Projects for 2006 also indicated that the intermediate appellate courts of the Louisiana had one of the lowest filings per judge ratios in the nation. If we consider that each judgeship has direct costs of, at least, $500,000 per judge and indirect costs of, at least, $100,000 per judge, the costs of existing surplus judgeships to the state are significant.

    Accountability and Transparency

    In America, the people are theoretically sovereign. The people exercise their sovereignty through their insistence on the respect for basic rights guaranteed by their constitutions and charters and by the rights bestowed on the people by law. One of the means by which the people can hold their governments accountable is their insistence on transparency in government. Transparency is both an attitude regarding governing and an affirmative program to strive continuously for openness in government.

    Fortunately, the state government of Louisiana appears committed to such transparency, especially in terms of the provision of basic information about the government and its finances. Information on the entities comprising the executive and legislative branches are available. LaTrac is under development. Bills tracking legislation and information on general finances and particular revenue sources are relatively easy to obtain.

    What is lacking, however, is information on the salaries of elected officials, the number of employees in each branch and major division of state government, and the total finances of each court and judicial branch agency in state government. What is also lacking is information that would aggregate the finances of courts and judicial branch agencies so that the public can understand how much these entities cost individually or by type of agency. Even if discrete information on judicial branch agencies were available, which they not, citizens and public officials should not have to add the data to understand the total costs of the various courts and agencies.

    In addition, requests for information on government finances are often discouraged, by the practices of some government bodies, which put callers through the “third-degree” as to why they want the information or send them through an endless round of referrals, or deny that the requested information exists, or charge unnecessarily high processing costs for the information. Admittedly, calls for information from the media and the public are sometimes difficult and costly for government agencies to obtain but these costs would be negligible, if governmental agencies would seriously plan and implement programs for providing such information in anticipation of requests that are frequently sought.

    Part of transparency has to be simplification. No one can possibly understand, much less manage, the complex structure and finances of Louisiana’s state government, even if all of the disparate pieces of information were somehow available, which they are not. Public officials and the public should have information that is simplified, organized, and readily available. In addition, there should be a clear and transparent plan for obtaining and simplifying the data.

    Compensation

    Many features of the compensation system of state government are laudable. The state civil service system protects classified workers in the executive branch from the harmful effects of patronage, politics, and arbitrary personnel actions. Most non-elected state workers receive regular salary increases, except those in some of the courts and judicial branch agencies. The state provides retirement benefits, health and life insurance benefits, deferred compensation benefits, travel expenses, and annual and sick leave benefits, and various other perquisites.

    Despite these many good features, the compensation system has several continuing problems that threaten Louisiana’s future. The biggest problem is that state government, as a whole, does not have effective processes for controlling the growth of employees in government. The problem is not, as it is often simply stated, that there are too many employees in the government. The issue should be how and where these resources are utilized and how efficient, effective, and equitable they are. The state certainly does not have too many teachers, librarians, and social workers in elementary and secondary education. The state’s pupil teacher ratios are too high; school effectiveness is too low; and school disciplinary and guidance services are underfunded.

    The state does not have too many employees in health, mental health, crime prevention, youth development, indigent defense, and many other services for those who are poor, powerless, and needy.

    Data from a variety of sources indicate that we are deficient in many of these functional areas. On the other hand, data also indicate that we appear to have too many employees performing management functions, serving surplus judgeships, providing redundant and duplicative services, and performing purely administrative functions at our colleges and universities.

    The state also suffers from the lack of rational, high quality pay plans for its elected officials. The state should not be cheap in terms of paying for good leadership and management, but it should develop better ways to control the number of elected officials, establish maximum levels of public salaries as derived from all sources, and improve the quality of leadership.

    The pay of elected officials in Louisiana is a mess. Legislative pay, consisting of salary and per diem, is too low and the salary portion does not have a clearly established basis for its rate. The salaries of judges at the district court level and above are below the southern average of pay for those types of courts. The number of new judgeships is somewhat controlled; but the level of existing judgeships have never been adjusted. The combined pay of city court judges, some of whom are part-time, is only required by state law to be below the level of district court judges, but the amount of work is not controlled. The salaries of the judicial branch agencies, which are very dependent on multiple sources of revenue, vary greatly, and, in the case of clerks of court and sheriffs are somewhat controlled in terms of total pay by state law. The pay provided to coroners from local governmental sources and self-generated revenues varies greatly with a few having sufficient pay and resources to carry out their duties and other barely able to pay themselves a decent wage. The total pay of district attorneys, city court marshals, and constables, and justice of the peace constables are not limited, except in terms of whatever they can legally obtain from various sources of income available to them. The district attorneys, marshals, and constables are not required by state law to work on a full-time basis.

    State compensation is also affected by the irrationality of providing annual merit increases to workers, regardless of inflation, the need to keep executive and management pay in reasonable proportion to worker pay, and the need to meet the public’s needs. Ordinary government workers should not be required to sacrifice their cost-of living increases to subsidize the government, especially when governmental leaders and executives have failed to plan and manage the public’s resources efficiently. The government should not inflate its costs automatically without reference to inflation and without controlling the number of officials and employees.

    Furthermore, the unfunded accrued liability of the state retirement systems continues to threaten the state’s fiscal well-being. The membership rules, size and accrued liabilities of the thirteen state and statewide systems vary greatly and negatively affects the state as a whole in terms of reducing pension liabilities as well as operational costs.

    Children’s Budget

    The Louisiana Childen’s Budget was initiated in FY 2004-2005 and has been an integral part of the state budget process ever since..Currently, it serves three purposes: it focuses attention on the needs of children and families; it provides a benchmark for analyzing the level of expenditures made by the state on children and families; and it serves as a good public relations tool. In its current form, the Children’s Budget is, at best, little more than an uncoordinated, list of expenditures made by departments on behalf of children and families without any central guidance or evaluation. The Children’s Budget can and should be more than this. The Budget should be a strategic planning tool for developing, directing, coordinating, monitoring, and evaluating not only the goals and objectives of the three branches of state government but also for motivating the involvement of local government and the private sector in the effort. In other words, the Children’s Budget should be a tool for actually improving the lives of children and families in the state.

    Comparative Analysis

    In this sub-section, we will analyze state finances by comparing Louisiana to the nation as a whole and to selected southern states with populations of similar size to Louisiana. Because most of the data will be analyzed on a per capita basis, we will present comparative information on population, per capita income, per capita revenue, and per capita expenses. The information used in the comparisons has been drawn from several sources that are listed in the section on Sources of Information and are specifically cited in this section.

    Readers should be cautious about all comparative state government data because of the differences that exist among the states in their respective fiscal years, the time lags in publishing and revising recent data, the different ways in which states provide state and local services, and the differences among states regarding fiscal definitions and assumptions. All data sources do their best in trying to make some sense out of the chaos of fiscal practices throughout the nation. Their efforts contribute much to our understanding of the finances of the various states, but the accuracy of their products are frequently questioned. For these reasons, the reader should carefully review each data source’s methodologies and time-periods to ensure that they are, at least relatively speaking, comparing the same data elements. To address the problem, we have attempted, in this issue, to cite each source, each time- period, and each definition of the data elements used. Like most worthwhile statistical endeavors involving disparate data, all that we can do in the end is provide a relative indication of how one thing compares to another.

    To create a context for better understanding the data, we shall first provide comparative data on population, per capita income, and gross state product for Louisiana, the states as a whole, and the states of Alabama, Kentucky, and South Carolina.

    Population

    In 2007, the United States Bureau of the Census estimated that Louisiana had a population of 4,293,204 persons and the United States had a population of 299,398,000. Those states in the south that had populations of comparable size to Louisiana, namely Alabama, Kentucky, and South Carolina, had the following estimated populations: Alabama - 4,661,900; Kentucky - 4,241,474; and South Carolina - 4,407,709. Based on these estimates, Louisiana was ranked 25th in population; Alabama, 23rd; Kentucky, 26th; and South Carolina 24th.

    (Source: U.S. Bureau of the Census, Annual Population Estimates, 2007. See also methodologies used.)

    Per Capita Income

    In 2007, the Bureau of Economic Analysis estimated that the per capita personal income of Louisiana, in current dollars, was $34,756, and its rank in the nation was 46. Per capita personal income in the United States as a whole was $38,611; that of Alabama was $32,404 and its rank was 42; that of Kentucky was $31,111 and its rank was 46; and that of South Carolina was $31.013 and its rank was 47.

    (Source: Bureau of Economic Analysis (BEA), U.S. Department of Commerce, 2007)

    Gross State Product

    Gross state product is the state counterpart of the national gross domestic product. Gross domestic product is the market value of goods and services produced by labor and property in the United States. In 2007, Louisiana had a per capita gross state product of $35,100 and its rank was 29. The United States average was $38,615. Alabama had a gross state product of $32,419 and its rank was 42. Kentucky had a gross state product of $30,824 and its rank was 45. South Carolina had a gross state product of $32,103 and its rank was 44.

    (Source: Bureau of Economic Analysis, Department of Commerce, 2007)

    Revenues

    According to the U.S. Bureau of the Census, Census of Governments, Louisiana had $33,286,017,000 in total revenues and $27,411,283,000 in general revenues. All states together had total revenues of $1,992,826,290,000 and general revenues of $1,450,636,262,000. Alabama had total revenues of $27,536,360,000 and general revenues of $21,287,226,000. Kentucky had total revenues of $25,425,381,000 and general revenues of $20,058,090,000. South Carolina had total revenues of $27,530,567,000 and general revenues of $20,942,385,000.

    If these gross numbers are converted to a per capita basis, per capita revenues in 2007 were:

    Chart 13 State Government Total Revenues and General Revenues, FY 2007

    State Total Revenues (Per Capita) General Revenues (Per Capita)
    Louisiana 7,753 6,385
    All States 6,656 4,845
    Alabama 5,907 4,566
    Kentucky 5,994 4,729
    South Carolina 6,246 4,751

    (Source: U.S. Census of Governments, State Finances, 2007)

    The Tax Foundation, using U.S. Bureau of the Census data, had slightly different per capita amounts for 2007, showing Louisiana having total revenues of $7,779 per capita and being ranked 11th; the nation as a whole having total revenues of $6,639 per capita; Alabama having total revenues of $5,974 per capita and being ranked 36th; Kentucky having total revenues of $6,021 per capita and being ranked 35th; and South Carolina having total revenues of $6,301 per capita and being ranked 27th. The difference between the per capita numbers of the Tax Foundation and my calculations may be due to either a difference in the basic population estimates, the times in which the estimates were revised, or differences in rounding.

    Per capita revenues as a percent of per capita income may be calculated as follows:

    Chart 14 State Government Total Revenues, Income Per Capita, Revenues as a Percent of Personal Income, FY 2007

    State Total Revenues (Per Capita) Income (Per Capita) Revenues as % of Income
    Louisiana 7,753 34,756 22.3%
    All States 6,656 38,611 17.2%
    Alabama 5,907 32,404 18.2%
    Kentucky 5,994 31,111 19.3%
    South Carolina 6,246 31,013 20.1%

    Federal Aid

    Federal aid to state and local governments in Louisiana, the United States, as a whole, and the states of Alabama, Kentucky, and South Carolina in 2006 was:

    Chart 15 Per Capita Federal Aid and Rank, FY 2007

    State Per Capita Aid Rank
    Louisiana $2,123 5
    United States $1,433 --
    Alabama $1,430 19
    Kentucky $1,386 22
    South Carolina $1,351 23

    (Source: U.S. Census Bureau; Statistical Abstract of the United States, 2007)

    State and Local Tax and Revenue Burdens

    Using multiple sources, the Tax Foundation has developed an analysis of state and local tax burdens from 1977 to 2008. The results of that analysis, which presents among other things, the year, the rate of taxation, and the per capita state and local taxes paid in 1977 and 2007, are shown below:

    Chart 16 State and Local Government Tax Burden Per Capita, FY 1977 and FY 2007

    State Rate 1977 Rate 2007 Per Capita 1977 Per Capita 2007
    Louisiana 7.9% 8.7% $498 $3,163
    United States 10.3% 9.9% $803 $4,223
    Alabama 8.9% 8.8% $803 $3,083
    Kentucky 10.0% 9.6% $623 $3,188
    South Carolina 9.4% 9.2% $561 $3,183

    (Source: The Tax Foundation, Special Report, No. 163, August 2008).

    Expenditures

    The U.S. Bureau of the Census, Census of Governments, reported the following total and general expenses incurred by the listed state governments in 2007:

    Chart 17 State Government Total Expenses and General Expenses, FY 2007

    State Total Expenses General Expenses
    Louisiana 27,855,931,000 25,016,388,000
    United States 1,634,801,176,000 1,423,311,388,000
    Alabama 23,192,507,000 20,674,219,000
    Kentucky 23,680,419,000 20,863,257,000
    South Carolina 24,824,628,000 20,887,140,000

    If these gross numbers are converted to a per capita basis, the results are:

    Chart 18 State Government Per Capita Total and General Expenses, FY 2007

    State Total Expenses Per Capita General Expenses Per Capita
    Louisiana 6,488 5,827
    United States 5,460 4,745
    Alabama 4,975 4,434
    Kentucky 5,583 4,919
    South Carolina 4,751 4,733

    (Source: U.S. Census of Governments, State Finances, 2007)

    The per capita total expenses of state government as a percent of per capita income may be calculated from the 2007 Census of Governments data as follows:

    Chart 19 State Government Total Expenses Per Capita, Income Per Capita, and Total Expenses As a Percent of Income, FY 2007

    State Total Expenses Per Capita Income Per Capita Total Expenses as a % of Income
    Louisiana 6,488 34,756 18.7%
    United States 5,460 38,611 14.1%
    Alabama 4,975 32,404 15.4%
    Kentucky 5,583 31,111 17.9%
    South Carolina 4,751 31,013 15.3%

    The National Association of State Budget Officers publishes an annual report on state expenditures. In its 2008 report, the Association presented information on FY 2006 and 2007 data and estimated 2008 data. The FY 2007-2008 data, which parallels the data reported by the 2007 Census, but includes capital expenditures, found that Louisiana spent a total of approximately $29.5 billion in FY 2007-2008. In that same fiscal year, all states spent approximately $1.4 trillion, Alabama, approximately $16.1 billion, Kentucky, approximately $22.3 billion, and South Carolina, approximately $20.0 billion.

    Louisiana’s expenses were, therefore, about 2% of total state spending, Alabama was about 1%, Kentucky, about $1.6%, and South Carolina, about 1.4%.

    (Source: NASBO, State Expenditure Report, 2008)

    Functional Expenditure Analysis

    In the functional expenditure analysis of state government, spending in terms of standard categories of expenditures is presented. The method of categorization may differ from source to source depending on the different definitions, assumptions, fiscal years, and ways in which states allocate responsibilities between state and local governments. For example, while most states have fiscal years beginning July 1 of each year, some states – New York (March 31); and Texas, Alabama and Michigan (Sept.30)- have different fiscal years. Some states have more services of a particular type performed by local governments than by their state governments. In addition, some states provide greater financial assistance to their local governments than do other states. Because of the differences among governments, all comparative analyses, especially functional analyses, are inherently flawed. They can, however, be used as general indicators of how the different states prioritize their resources. Part of these difficulties, especially those relating to the allocation of responsibilities between state and local governments, may be overcome by presenting functional analyses that combine state and local expenses.

    This sub-section presents data on state government spending and combined state and local government spending by functional category for Louisiana, the United States as a whole, Alabama, Kentucky, and South Carolina. These analyses primarily focus on spending as reported by the U.S. Census of Governments for FY 2007, the most recent year of available data. However, data from other sources pertaining to the same fiscal year are also be presented. Each functional area is then be analyzed for the listed states using other sources of supplemental data for the same year or as near to 2007 as possible.

    State Government Spending Only

    Education

    The functional category of education, which includes general expenditures in elementary, secondary, and higher education, was by far the largest category of spending by state governments in 2007. The state governments of the listed areas spent approximately:

    Chart 20 State Government Education Expenses, FY 2007

    State Total Expenses in Billions Expenses Per Capita % of General Expenses
    Louisiana $7.7 $1,795 30.8%
    United States $514.9 $1,720 36.2%
    Alabama $9.4 $2,006 45.2%
    Kentucky $8.0 $1,878 38.2%
    South Carolina $7.5 $1,693 35.7%

    (Source: U.S. Census of Governments, State Finances, 2007)

    Based on these data, the state government of Louisiana in 2007 spent less per capita on education than the state governments of Alabama and Kentucky but more than the rest of the United State and South Carolina. Louisiana, however, spent a smaller percentage of its direct general expenditures on education than did any of the other listed areas.

    In the NASBO annual expenditure reports, state government spending on elementary and secondary education in FY 2007 in the listed areas used was:

    Chart 21 Government Education Expenses (NASBO), FY 2007

    State Total Expenses in Millions General Fund Expenses in Millions
    Louisiana $4,605 $2,754
    United States $305,208 $224,919
    Alabama $5,008 $4,061
    Kentucky $3,769 $4,485
    South Carolina $3,636 $2,189

    (Source: NASBO, State Expenditure Report, FY 2007)

    The NASBO publication also provides information on state government expenditures on elementary and secondary education as a percent of total expenditures. The report presents the following information for Louisiana, the U.S., Alabama, Kentucky, and South Carolina:

    Chart 22 State Government Education Expenses as a Percent of Total Expenses , (NASBO), FY 2007

    State % of Total Expenses
    Louisiana 15.6%
    United States 21.2%
    Alabama 13.8%
    Kentucky 20.1%
    South Carolina 18.2%

    (Source: NASBO, State Expenditure Report, FY 2007)

    NASBO provides the following FY 2007 information on higher education spending inclusive of capital expenses in the listed areas:

    Chart 23 State Government Higher Education Spending,(NASBO, FY 2007)

    State Total Expenses in Millions General Fund Expenses in Millions
    Louisiana $2,789 $1,317
    United States $150,459 $73,054
    Alabama $3,887 $1,713
    Kentucky $4,600 $1,384
    South Carolina $4,031 $891

    (Source: NASBO, State Expenditure Report, FY 2007)

    NASBO reported that higher education as a percent of total expenses in FY 2007 was for the listed areas as follows:

    Chart 24 State Government Higher Education Expenses as a Percent of Total Spending, (NASBO) FY 2007

    State % of Total Expense
    Louisiana 9.5%
    United States 1035%
    Alabama 10.7%
    Kentucky 20.6%
    South Carolina 20.2%

    (Source: NASBO, State Expenditure Report, FY 2007)

    Public Welfare

    The second largest category of state spending reported by the U.S. Census of Governments was public welfare. In 2007, the state government of the listed areas spent approximately:

    Chart 25 State Government Public Welfare Total Expenses , FY 2007

    State Total Expenses in Billions Expenses Per Capita % of General Expenses
    Louisiana $4.9 $1,146 19.7%
    United States $393.1 $1,313 27.6%
    Alabama $4.8 $1,023 23.1%
    Kentucky $5.8 $1,374 25.8%
    South Carolina $5.4 $1,226 --

    (Source: U.S. Census of Governments, State Finances, 2007)

    In this category of spending, Louisiana spent more per capita on public welfare than Alabama but less per capita than all states, Kentucky, and South Carolina. Louisiana spent a smaller percentage of total general revenues on public welfare than did all of the listed areas.

    The NASBO State Expenditure Report provides the following data on public assistance expenses for the listed areas:

    Chart 26 State Government Public Assistance Spending, (NASBO), FY 2007

    State Total Expenses in Millions General Fund Expenses in Millions
    Louisiana $44 $2
    United States $23,831 $12,524
    Alabama $46 $4
    Kentucky $171 $72
    South Carolina $67 $29

    (Source: NASBO, State Expenditure Report, FY 2007)

    NASBO also provides information on public assistance spending in 2007 as a percent of total expenditures. In the listed areas, such spending was:

    Chart 27 State Government Public Assistance Spending as a Percent, of Total Spending, (NASBO), FY 2007

    State % of Total Spending
    Louisiana .1%
    United States 1.7%
    Alabama .1%
    Kentucky .8%
    South Carolina .3%

    (Source: (Source: NASBO, State Expenditure Report, FY 2007)

    The data shows state spending on public assistance to be similar to the spending of Alabama, but less than the spending of the U.S. as a whole and the states of Kentucky and South Carolina.

    Hospitals

    In FY 2007, U.S. Census of Governments reported that the state governments of the listed areas spent approximately the following amounts on hospitals:

    Chart 28 State Government Hospital Spending, FY 2007

    State Total Expenses in Billions Expenses Per Capita % of General Expenses
    Louisiana $.8 $197 3.37%
    United States $48.2 $161 3.37%
    Alabama $1.6 $348 7.85%
    Kentucky $1.0 $238 3.38%
    South Carolina $1.3 $297 6.78%

    (Source: U.S. Census of Governments, State Finances, FY 2007)

    With respect to state spending on hospitals, Louisiana state government spent more per capita than the nation, but less than Alabama, Kentucky, and South Carolina. In terms of spending as a percent of general expenses, Louisiana state government spent less than did any of the other listed areas.

    Heath

    According to the U.S. Census of Governments, state government spending on health in FY 2007 in the listed areas was:

    Chart 29 State Government Health Spending, FY 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $588.2 $197 2.35%
    United States $57,814 $193 4.06%
    Alabama $643.3 $138 3.11%
    Kentucky $577.5 $136 2.77%
    South Carolina $970.3 $220 4.6%

    Louisiana spent more per capita on health than all other listed areas, except South Carolina. In terms of health spending as a percent of general expenses, Louisiana spent less than did any of the other listed areas.

    (Source: U.S. Census of Governments, FY 2007)

    Highways

    According to the U.S. Census of Governments, state government spending on highways in FY 2007 in the listed areas was:

    Chart 30 State Government Highway Spending, FY 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $1,656 $386 6.62%
    United States $103,167 $345 7.25%
    Alabama $1,359 $291 6.57%
    Kentucky $2,139 $504 10.25%
    South Carolina $1,126 $255 5.39%

    The state government of Louisiana spent more per capita on highways in 2007 than all of the listed areas except Kentucky. In terms of spending as a percent of general expenses, Louisiana spent less on highway spending in 2007 than any of the listed areas except South Carolina.

    (Source: U.S. Census of Governments, State Finances, FY 2007)

    Police Protection

    According to the U.S. Census of Governments, state government spending in 2007 on police protection in the listed areas was:

    Chart 31 State Government Spending on Police Protection, FY 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $316.3 $74 1.26%
    United States $12,875 $43 0.90%
    Alabama $167.9 $36 0.81%
    Kentucky $191.4 $45 0.92%
    South Carolina $196.5 $45 0.94%

    (Source: U.S. Census of Governments, State Finances, FY 2007)

    In 2007, Louisiana spent more per capita and more in terms of the percentage of general spending on police protection than did any of the listed areas.

    Corrections

    In 2007, state government spending on corrections was:

    Chart 32 State Government Correction Spending ,FY 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $651.5 $152 2.60%
    United States $46,490 $155 3.27%
    Alabama $514.4 $110 2.49%
    Kentucky $471.5 $111 2.26%
    South Carolina $470.9 $107 2.25%

    In 2007, Louisiana spent more per capita and a higher percentage of general expenses on corrections than did all of the other listed areas except the U.S. as a whole.

    (Source: U.S. Census of Governments, FY 2007)

    The NASBO State Expenditure Report for FY 2007 provides the following information on corrections spending in the listed areas:

    Chart 33 Total and General Fund Spending on Corrections, (NASBO) FY 2007

    State Total Expenses in Millions General Fund Spending in Millions
    Louisiana $321 $538
    United States $48,622 $43,904
    Alabama $550 $377
    Kentucky $526 $465
    South Carolina $585 $438

    (Source: NASBO, State Expenditure Report, FY 2007)

    The NASBO report also provides the following analysis of correctional spending, inclusive of capital expenditures, as a percent of total spending:

    Chart 34 State Government Corrections Spending as a Percent of Total and General Fund Revenues, (NASBO) FY 2007

    State % of Total Spending % of General Fund Spending
    Louisiana 2.0% 5.8%
    United States 3.4% 6.7%
    Alabama 2.2% 7.8%
    Kentucky 2.4% 5.8%
    South Carolina 2.9% 5.6%

    (Source: NASBO, State Expenditure Report, FY 2007)

    The Kaiser Fund’s Health Facts provides information, derived from Prisoners in 2007, National Prison Statistics, Bureau of Justice Statistics, on the number of adult prisoners under state jurisdiction in 2007. It also provides information from the same source on the incarceration rate per 100,000 U.S. residents. The data on the listed areas were:

    Chart 35 Number of Adult Prisoners under State Jurisdiction and Incarceration Rate, FY 2007

    State Number of Prisoners Incarceration Rate per 100,000 Residents
    Louisiana 37,540 865
    United States 1,598,316 506
    Alabama 29,412 615
    Kentucky 22,457 512
    South Carolina 24,239 524

    (Source: Kaiser Health Facts, 2007)

    Based on information from the U.S. Census, Population Division, the Louisiana Department of Corrections estimated the number of state inmates housed in state and local jails and the number of state inmates per 100,000 population , as of July 1, 2008, for the listed areas to be:

    Chart 36 State Inmates Housed in State and Local Facilities, Total State Inmates per 100,000 Population, 2008

    State State Facilities Local Facilities Total Facilities Inmates per 100,000 Population
    Louisiana 20,929 17,208 38,137/td> 888.3
    United States 606,223 46,689 653,112 568.5
    Alabama 25,901 1,435 27,336 590.7
    Kentucky 14,306 7,360 21,668 510.8
    South Carolina 24,600 392 24,999 567.2

    (Source: Louisiana Department of Public Safety and Corrections, Interim Analysis, Louisiana Streamlining Commission, August 14, 2009, p.37)

    Natural Resources

    According to the U.S. Census of Governments, state government spending on natural resources in FY 2007 for the listed areas was:

    Chart 37 State Government Spending on Natural Resources, FY 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $483.5 $113 1.93%
    United States $21,981 $73 1.54%
    Alabama $288.6 $60 1.34%
    Kentucky $361.2 $85 1.73%
    South Carolina $259.5 $59 1.24%

    (Source: U.S. Census of Governments, State Finances, FY 2007)

    The above data indicate that Louisiana spent more per capita and more in terms of percentage of general spending in this category than did any of the other listed areas.

    Parks and Recreation

    According to the U.S. Census of Governments, the listed areas spent approximately the following amounts on parks and recreation spending in FY 2007:

    Chart 38 state Government Spending on Parks and Recreation, FY 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $791.6 $74 1.27%
    United States $50,882 $20 0.42%
    Alabama $551.6 $6 0.14%
    Kentucky $779.2 $25 0.51%
    South Carolina $117 $27 0.56%

    (Source: U.S. Census of Governments, State Finances, FY 2007)

    In this category of spending, Louisiana spent more per capita and more of a percentage of its general expenses than did all the other listed areas.

    Governmental Administration

    According to the U.S. Census of Governments, state spending in FY 2007 on government administration in the listed areas was:

    Chart 39 State Government Spending on Governmental Administration, FY 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $791 $184 3.16%
    United States $50,882 $170 3.57%
    Alabama $551.5 $118 2.67%
    Kentucky $779 $184 3.74%
    South Carolina $1,011 $229 4.84%

    (Source: U.S. Census of Governments, FY 2007)

    In 2007, Louisiana spent less per capita and less as a percentage of general expenses in this category than did Kentucky and South Carolina but more than did all states and Alabama.




    State and Local Government Expenses

    This section presents and analyzes state and local expenses in several functional areas, the definitions of which are provided in the U.S. Census of Governments, State and Local Finance Phase, FY 2007. State and local government expenses are combined to provide a more accurate accounting of the expenses of a state by function. States differ considerably in the ways in which services are delivered to the public. Some states have more centralized systems of service delivery; others rely more heavily on local governmental services. The amount of state assistance to local governments varies considerably from state to state, and the amount of federal assistance to each state varies considerably.

    The primary source of data for the functional analysis is derived from the State and Local Finance Phase of the U.S. Census Bureau. When other supplemental data are used they are specifically identified as to source and date.

    The primary basis for this analysis is the category, labeled in the Census Report, as direct, general expenditures. Direct, general expenditures are general expenses that are payments to employees, contractors, and beneficiaries, and other final recipients of governmental payments, other than intergovernmental expenditures.

    Chart 40 Population, Total Direct General Expenditures, and Per Capita Direct General Expenditures, FY 2007

    State Population Total Direct General Expenditures Per Capita Direct Expenditures
    Louisiana 4,293,204 34,170,051,000 7,959
    United States 299,398,000 2,645,148,741,000 8,835
    Alabama 4,661,900 30,400,644,000 6,521
    Kentucky 4,241,475 26,821,686,000 6,324
    South Carolina 4,407,709 30,897,698,000 7,010

    (Source: population counts derived from U.S. Bureau of the Census, Annual Population Estimates, 2007; total direct general expenditures are derived from the U.S. Census of Governments, State and Local Government Phase, FY 2007)

    Elementary and Secondary Education

    This category comprises expenses involving state educational administration and services, aid to private schools, special programs, regular and special instruction, support services, and other activities of the public schools for K through high school. According to the U.S. Census of Governments, State and Local Phase, 2007, the expenses of the listed areas were:

    Chart 41 State and Local Elementary and Secondary Education, 2007

    State Total Expenses in Billions Expenses Per Capita % of General Expenses
    Louisiana $6.6 $1,572 19.19%
    United States $534.9 $1,787 20.22%
    Alabama $7.1 $1,528 23.44%
    Kentucky $5.9 $1,396 22.08%
    South Carolina $7.5 $1,702 24.27%

    (Source: U.S. Census of Governments, State and Local Finance Phase, FY 2007

    Based on these data elements, Louisiana the state and local governments spent more per capita than, Alabama and Kentucky, but less than all states and South Carolina. The percentage of direct general expenses expended in elementary and secondary education as compared to total direct general expenses was less than all states, Alabama, Kentucky, and South Carolina.

    The latest U.S. Census Bureau’s publication on public education finances, a report that is different from above-referenced report, was released on July 2009. The publication contains data from 2006-2007 and reports information on public educational revenues and expenditures from all sources in Louisiana, the U.S. as a whole, Alabama, Kentucky, and South Carolina. The publication reports the following per pupil revenues and expenditures in 2006-2007 from all sources in Louisiana, all states, Alabama, Kentucky, and South Carolina:

    Chart 42 State and Local Elementary and Secondary Education Per Pupil Revenues and Expenses, 2006-2007

    State Per Pupil Revenues Per Pupil Expenses
    Louisiana $10,602 $8,928
    United States $11,496 $9,666
    Alabama $9,509 $8,284
    Kentucky $9,630 $8,391
    South Carolina $10,148 $8,167

    (Source: U.S. Bureau of the Census, Public Education Finances, FY 2006-2007)

    The same Census publication also has a table showing states ranked according to the relation of public school finances to $1,000 0f personal income in Louisiana, all states, Alabama, Kentucky, and South Carolina:

    Chart 43 State and Local Elementary and Secondary Education Revenues and Expenses per $1,000 of Personal Income, 2006-2007

    State Revenues per $1,000 Personal Income Expenses per $1,000 Personal Income
    Louisiana $50.40 $41.01
    United States $50.72 $43.02
    Alabama $49.90 $42.95
    Kentucky $50.18 $42.49
    South Carolina $54.80 $43.80

    (Source: U.S. Bureau of the Census, Public Education Finances, FY 2006-2007)

    Based on these data elements, revenues per pupil in state and local elementary and secondary education in Louisiana were higher than the revenues per pupil in Alabama, and Kentucky, but lower than all states and South Carolina. The per-pupil expenses in elementary and secondary education were higher than the per-pupil expenses in Alabama, Kentucky, and South Carolina, but were lower than the per pupil expenses of all states. Louisiana also allocated fewer revenues and spent less per $1,000 of personal income than did any of the other listed area.

    Higher Education

    This category includes colleges and universities, and local government degree granting institutions which provide academic training above grade we. According to U.S. Census of Governments, State and Local Finance Phase, 2007, direct general expenses for higher education in the listed areas were:

    Chart 44 State and Local Higher Education, 2007

    State Total Expenses in Billions Expenses Per Capita % of General Expenses
    Louisiana $2.7 $627 7.88%
    United States $204.4 $683 7.73%
    Alabama $4.0 $859 13.17%
    Kentucky $3.0 $707 11.18%
    South Carolina $2.9 $675 9.64%

    (Source: U.S. Census of Governments, State and Local Finance Phase, FY 2007

    Based on these data, Louisiana spent less per capita on higher education than any of the listed areas. Louisiana also spend less on higher education as percentage of its total direct general expenses than any of the listed areas except all states.

    Public Welfare

    This category includes support and assistance to needy persons contingent upon their need. The category excludes pensions and benefits not contingent upon need. According to the U.S. Census of Governments, State and Local Phase, 2007, the public welfare expenses of the listed areas were:

    Chart 45 State and Local Public Welfare Expenses, 2007

    State Total Expenses in Billions Expenses Per Capita % of General Expenses
    Louisiana $4.8 $1,114 14.0%
    United States $377.4 $1,261 14.27%
    Alabama $4.7 $1,007 15.44%
    Kentucky $5.7 $1,340 21.19%
    South Carolina $5.3 $1,202 17.15%

    (Source: U.S. Census of Governments, State and Local Finance Phase, FY 2007

    Based on these data, Louisiana spent less per capita on public welfare than all states, Kentucky, and South Carolina, but more than Alabama. Louisiana also spent less on public welfare as a percent of its total direct general expenditures than did any of the listed areas. In 2007, the U.S. Bureau of the Census estimated the percent of people in poverty by state. According to this source, Louisiana had a higher percentage of people in poverty than did any of the above listed areas. Louisiana percent of poverty was 18.6%; all states were 13.0%; Alabama, 16.9%; Kentucky, 17.3%; and South Carolina, 15.0%. The fact that Louisiana spent less than the southern states listed in the table says a lot about Louisiana’s commitment to the poor.

    Hospitals

    This category includes expenses involving the financing, construction, acquisition, maintenance, and operation of hospital activities, hospital care, and support of public and private hospitals. According to the U.S. Census of Governments, State and Local Phase, 2007, the hospital expenses of the listed areas were:

    Chart 46 State and Local Hospital Expenses, 2007

    State Total Expenses in Billions Expenses Per Capita % of General Expenses
    Louisiana $2.9 $664 8.34%
    United States $118.6 $396 4.48%
    Alabama $3.7 $783 12.01%
    Kentucky $.978 $231 3.65%
    South Carolina $3.9 $888 12.67%

    (Source: U.S. Census of Governments, State and Local Finance Phase, FY 2007

    Based on these data, Louisiana spent less per capita on state and local hospitals than did Alabama and South Carolina but more per capita than all states and Kentucky. . Louisiana spent a smaller percentage of its direct general expenditures than did Alabama and South Carolina but more than did all states and Kentucky did.

    In FY 2007Louisiana had 730.1 hospital employees per 100,000 persons as compared to the nation which had 328.4, Alabama, which had 819.3, Kentucky, which had 214.9, and South Carolina, which had 652.5. Like Alabama, Louisiana had a very high number of employees per 100,000 persons in the hospital category. Yet, unlike Alabama, Louisiana’s performance, in terms of hospital care measures, as published by the Agency for Healthcare Research and Quality in 2007, was ''very weak." These measures included public and private hospitals.

    In addition, a report of the Public Affairs Research Council (PAR) issued in May 2, 2006, stated that Louisiana ranked fourth in emergency room visits (ER) per capita and was one of the worst states in terms of access to primary care. The report also referred to a consensus of post-Katrina studies of Louisiana’s health problems and decades of other research showing that the expensive, often inaccessible, hospital-centered, state-operated model of health care delivery should be changed.

    Health

    This category comprises outpatient health services, other than hospital care, including public health administration, and research and education. According to the U.S. Census of Governments, State and Local Phase, 2007, the health expenses of the listed areas were:

    Chart 47 State and Local Health Expenses, FY 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $588.9 $137 1.72%
    United States $70,402.1 $235 2.66%
    Alabama $806.1 $173 2.65%
    Kentucky $633.7 $149 2.36%
    South Carolina $1,001.1 $227 3.2%

    (Source: U.S. Census of Governments, State and Local Finance Phase, FY 2007

    Based on these data, Louisiana spent less per capita on state and local health than any of the listed areas. Its expenditures on health as a percent of direct general expenses were also less than the expenditures of the other listed areas.

    Employment Security

    This category includes expenses associated with the administration of unemployment compensation, public employment offices, and related services. According to the U.S. Census of Governments, State and Local Phase, 2007, the employment security expenses of the listed areas were:

    Chart 48 State and Local Employment Security Administration Expenses, FY 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $58.3 $14 .17%
    United States $3,981.4 $13 .15%
    Alabama $79.3 $17 .26%
    Kentucky $52.1 $12 .19%
    South Carolina $60.0 $14 .19%

    (Source: U.S. Census of Governments, State and Local Finance Phase, FY 2007

    Based on these data, the per capita expenditures of Louisiana on employment security administration were in 2007 higher than all states and Kentucky but were less than the per capita expenditures in Alabama. Employment security expenditures in Louisiana as a percent of direct general expenses were smaller than the percentages in Alabama, Kentucky, and South Carolina but larger than the percentage of all states.

    According to the Bureau of Labor Statistics, Louisiana’s unemployment rate in 2007 was 3.8%; the U.S. as a whole was 4.6%; Alabama was 3.5%; Kentucky was 5.5%; and South Carolina was 4.6%.

    Veterans Services

    This category includes expenses associated with the payment of bonuses and other financials grants to veterans, as well as, the provision of information and guidance services to veterans. According to the U.S. Census of Governments, State and Local Phase, 2007, the expenses of services to veterans in the listed areas were:

    Chart 49 State and Local Veterans Service Expenses, 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $10.4 $2 .03%
    United States $698.9 $2 .03%
    Alabama $.66 $01 .002%
    Kentucky -- -- --
    South Carolina -- -- --

    (Source: U.S. Census of Governments, State and Local Finance Phase, FY 2007

    Based on these data, Louisiana spent about the same per capita on veterans’ expenditures in 2007 as all states but considerably less than Alabama. Expenditures as a percent of direct general expenses in Louisiana was also about the same as all states but much lower than Alabama.

    Transportation

    This category includes expenses association with highways, air transportation, parking facilities, buses, rail and railroad facilities and operations, water transportation, terminals, and transit subsidies. According to the U.S. Census of Governments, State and Local Phase, 2007, the transportation expenses of the listed areas were:

    Chart 50 State and Local Highway Expenses, 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $2.2 $515 6.48%
    United States $144.8 $484 5.47%
    Alabama $2.0 $420 6.45%
    Kentucky $2.4 $555 8.76%
    South Carolina $1.4 $309 4.41%

    (Source: U.S. Census of Governments, State and Local Finance Phase, 2007

    Based on these data, Louisiana spent more per capita on state and local highway expenses in 2007 than all states, Alabama, and Kentucky but less than Kentucky. Louisiana ‘s state and local expenditures as a percent of direct general expenditures were more than all states, Alabama, and South Carolina but was less than that of Kentucky.

    Police Protection

    This category comprises expenses relating to the preservation of law and order and traffic safety, including police patrol, police communications, crime prevention, detention, and custody of persons awaiting trial, and vehicular inspection. According to the U.S. Census of Governments, State and Local Phase, 2007, the police protection expenses of the listed areas were:

    Chart 51 State and Local Police Protection Expenses, 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $1,211.7 $282 3.55%
    United States $84,098.6 $281 3.18%
    Alabama $976.9 $281 3.21%
    Kentucky $628.6 $210 2.34%
    South Carolina $901.0 $148 2.92%

    (Source: U.S. Census of Governments, State and Local Finance Phase, 2007

    Based on these data, Louisiana spent slightly more per capita on state and local police spending in 2007 than all states and Alabama but significantly more than Kentucky and South Carolina. State and local police expenditures in Louisiana as a percent of direct general expenditures were more than that of all of the other listed areas.

    According to the FBI’s annual publication Crime in the U.S., the violent crime rate per 100,000 inhabitants in Louisiana in 2007 was significantly higher than the rates in Alabama and Kentucky but was lower than the rate in South Carolina. The property crime rate per 100,000 inhabitants in Louisiana was higher than the rates in Alabama and Kentucky but was lower than the rate in South Carolina.

    Corrections

    This category comprises expenses relating to the correction and confinement of adults and minors convicted of offenses against the law and activities relating to probation, pardon, and parole. According to the U.S. Census of Governments, State and Local Phase, 2007, the correctional expenses of the listed areas were:

    Chart 52 State and Local Corrections Expenses, 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $1,064.6 $248 3.12%
    United States $64,096.9 $227 2.57%
    Alabama $769.1 $165 2.53%
    Kentucky $657.1 $155 2.45%
    South Carolina $661.6 $150 2.14%

    (Source: U.S. Census of Governments, State and Local Finance Phase, 2007

    Based on these data, Louisiana spent more per capita on state and local corrections than any of the other listed areas. State and local police expenditures in Louisiana as a percent of direct general expenditure were more significantly than that of all of the other listed areas.

    Information in the report of the Pew Center on the States, entitled One in 100 – America Behind Bars, a report issued in February 28, 2008, presented data showing that Louisiana had the highest rate of incarceration in the nation in 2005

    Natural Resources

    This expenditure category includes activities associated with the conservation, promotion, and development of natural resources, such as soil, water,, forests, mineral, and wildlife, and activities associated with irrigation, drainage, flood control, forestry, fire protection, soil reclamation, fish and game programs, and agricultural fairs. According to the U.S. Census of Governments, State and Local Phase, 2007, the expenses of the listed areas in this category were:

    Chart 53 State and Local Natural Resource Expenses, 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $460.1 $107 1.35%
    United States $22,493.8 $75 .85%
    Alabama $130.5 $28 .43%
    Kentucky $155.8 $37 .58%
    South Carolina $184.9 $42 .60%

    (Source: U.S. Census of Governments, State and Local Finance Phase, FY 2007

    Based on these data, state and local governments in Louisiana spent more per capita on natural resources than any of the other listed areas. State and local expenditures in Louisiana as a percent of direct general expenditure were significantly higher than that of all of the other listed areas.

    Parks and Recreation

    This category includes expenses associated with the provision and support of recreational and cultural-scientific facilities and services, such as golf courses, play fields, playgrounds, public beaches, swimming pools, tennis courts, parks, auditoriums, stadiums, auto camps, recreational piers, marinas, botanical gardens, galleries, museums, and zoos. According to the U.S. Census of Governments, State and Local Phase, 2007, the expenses of the listed areas in this category were:

    Chart 54 State and Local Parks and Recreation Expenses, 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $624.8 $146 1.83%
    United States $37,486.3 $125 1.42%
    Alabama $422.6 $91 1.39%
    Kentucky $285.1 $67 1.06%
    South Carolina $371.2 $84 1.20%

    (Source: U.S. Census of Governments, State and Local Finance Phase, FY 2007

    Based on these data, spending on parks and recreation per capita in Louisiana in 2007 was higher than any of the other listed areas. State and local police expenditures in Louisiana as a percent of direct general expenditure were also higher than that of all of the other listed areas.

    This category includes activities involving finance, taxations, accounting, auditing, the administration of retirement systems, debt, and investment administration. According to the U.S. Census of Governments, State and Local Phase, 2007, the expenses of the listed areas in this category were:

    Chart 55 State and Local Financial Administration Expenses, 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $575.6 $134 1.68%
    United States $39,652.3 $132 1.50%
    Alabama $463.0 $99 1.52%
    Kentucky $331.4 $78 1.24%
    South Carolina $913.7 $207 2.96%

    (Source: U.S. Census of Governments, State and Local Finance Phase, FY 2007

    Based on these data, state and local financial administration expenditures per capita in Louisiana in 2007 were higher than the expenditures made in all states, Alabama, and Kentucky but were lower than the expenditures made in South Carolina. State and local expenditures in Louisiana as a percent of direct general expenditure were significantly higher than that of all states, Alabama, and Kentucky but was lower than the expenditures made in South Carolina.

    Other Governmental Administration

    According to the U.S. Census of Governments, State and Local Phase, 2007, the expenses of the listed areas in this category were:

    Chart 56 State and Local Government Other Governmental Administrative Expenses, 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $364.8 $85 1.07%
    United States $27,340.1 $91 1.12%
    Alabama $339.5 $73 1.12%
    Kentucky $396.5 $93 1.48%
    South Carolina $436.7 $99 1.41%

    (Source: U.S. Census of Governments, State and Local Finance Phase, 2007

    Based on these data, the state and local governments of Louisiana spent less per capita on other governmental expenditures. than any of the listed areas except Alabama. State and local other governmental administrative expenditures in Louisiana as a percent of direct general expenditure were lower than that of all of the other listed areas.

    Combined Financial Administration and Other Governmental Administration

    If we combine the expenses in the categories of financial administration and other governmental administration, the Census data indicates the following expenses in the listed areas:

    Chart 57 Combined State and Local Government Financial and Other Governmental Administrative Expenses, 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $940.4 $219 2.75%
    United States $66,992.4 $224 2.53%
    Alabama $802.5 $172 2.64%
    Kentucky $727.9 $174 2.71%
    South Carolina $1,350,424,000 $306 4.37%

    (Source: U.S. Census of Governments, State and Local Finance Phase, FY 2007

    Based on these data, state and local governments in Louisiana spent more per capita in 2007 than Alabama and Kentucky but less than all states and South Carolina. State and local combined administrative expenditures in Louisiana as a percent of direct general expenditure were higher than that of all other listed areas except South Carolina.

    State and Local Governmental Buildings

    This category includes expenses associated with the provision and maintenance of public buildings not allocated to particular functions. According to the U.S. Census of Governments, State and Local Phase, 2007, the expenses of the listed areas in this category were:

    Chart 58 State and Local General Governmental Building Expenses, 2007

    State Total Expenses in Billions Expenses Per Capita % of General Expenses
    Louisiana $289.7 $67 .85%
    United States $13,944.9 $47 .53%
    Alabama $135.3 $29 .45%
    Kentucky $416.2 $98 1.55%
    South Carolina $173.6 $39 .56%

    (Source: U.S. Census of Governments, State and Local Finance Phase, FY 2007

    Based on these data, the per capita expenditures on governmental buildings in Louisiana were higher than the expenses of any of the listed areas except Kentucky. State and local expenditures in Louisiana on governmental buildings as a percent of direct general expenditure were higher than that of all other listed areas except South Carolina.

    Judicial and Legal

    This category of expenditures includes activities associated with courts and court-activities, including law libraries, prosecutorial and defendant programs, probate functions, and juries..According to the U.S. Census of Governments, State and Local Phase, 2007, the expenses of the listed areas were:

    Chart 59 State and Local Government Judicial and Legal Expenses, FY 2007

    State Total Expenses in Millions Expenses Per Capita % of General Expenses
    Louisiana $558.3 $130 1.63%
    United States $39,652.3 $132 1.50%
    Alabama $463.0 $99 1.52%
    Kentucky $331.4 $78 1.24%
    South Carolina $913.7 $207 2.96%

    (Source: U.S. Census of Governments, State and Local Finance Phase, FY 2007

    Based on these data, state and local governments in Louisiana spent more per capita on the category of judicial and legal in 2007 than Alabama and Kentucky but less than all states and South Carolina. State and local judicial and legal expenditures s in Louisiana as a percent of direct general expenditure were higher than that of all other listed areas except South Carolina.




    Conclusion

    Louisiana is blessed with abundant natural resources that enable it to have a relatively high level of per capita income, gross state product per capita, revenues per capita, and expenditures per capita than most of its southern sister states. Louisiana, however, has failed to use this bounty to improve significantly the human potential of its people, in terms of education, health, mental health, criminal and juvenile crime prevention, youth development, and reducing poverty. Instead, it has spread its resources, like butter over bread, to satisfy political demands, instead of meeting strategic objectives. There is legitimate skepticism about government’s ability to competently address the strategic needs of human development in the state, but giving up is not a solution. Several states, having fewer resources per capita, have been able to improve themselves by addressing successfully and strategically their human development challenges. Alabama is one of them. Louisiana can also do so, if it has the political will and intelligent leadership to make the effort. In attempting the effort, Louisiana must shed its unproductive ideologies of excessive localism, its pretended or real hostility to government, and its blind interest-group liberalism. Instead, Louisiana must get down to the pragmatic business of using genuine strategic planning, good practices, and evidence-based evaluations to address successfully the challenges of human development in the next decade. The wealth of the state is in its people. It is time to unleash the potential of its people through more productive and effective government investments in education, health, mental health, criminal and juvenile justice reform, youth development, and strategies for eliminating poverty.

    The state government can accomplish the task without raising taxes or revenues, other than smartly designed user charges. To do so, however, will require several painful transformations that need to be carefully planned and implemented over the next decade. In the next ten years, state government will have to:




    Suggestions for Improvement



    Accountability and Transparency

    Evidence-Based Research

    Surplus Judgeships

    Salary Caps

    Pay Increases

    Top-Heavy Management

    Restructuring the Pensions Systems of the State

    Restructuring the Executive Branch of State Government

    State Financing

    Children’s Budget

    Correctional Reforms

    Hospital Reforms

    Higher Education Reforms

    Judicial Branch Restructuring

    Judicial Branch Financing




    Further Reading


    General Sources

    David Baer, AARP. The State Handbook of Economic, Demographic, and Fiscal Indicators, American Association of Retired Persons (AARP), 2008

    The Council of State Governments, The Book of the States, 2008

    Audit Information

    Government Finances Officers Association, An Elected Officials Guide to Auditing, Revised, 2nd Edition

    Budget Information

    Donald J. Boyd, “State Budgets: Recent Trends and Outlook,” The Council of State Governments, The Book of the States, 2005, 401-407

    Louisiana Governor’s Executive Budget, FY 2008-2009

    Louisiana State Budget, FY 2008-2009

    National Conference of State Legislatures, State Budget and State Tax Action, 2007

    National Conference of State Legislatures, State Budget Update, June 2008

    National Conference of State Legislatures, State Budget Update April, 2009

    Childen’s Budgets

    California Advocacy Institute, California Children’s Budget, University of San Diego, School of Law, 2004-2005

    A Guide to Developing and Using Family and Children’s Budgets ERIC # ED-424004, 1998

    Kimura Flores, Toby Douglas, Deborah A. Ellwood, Children’s Budget Report, A Detailed Analysis of Spending on Low-Income Children's Programs in 13 States, Urban Institute, 1998

    First Focus, Children’s Budget 2008

    Corrections

    Todd R. Clear, Imprisoning Communities. How Mass Incarceration Makes Disadvantaged Neighborhoods Worse, New York: Oxford University Press, 2007

    The Pew Center on the States, One in 100: Behind Bars in America. February 28, 2008.

    Court Financing

    Institute of Judicial Administration, A Study of the Louisiana Court System (New York, NY:, 1972)

    American Judicature Society, Modernizing Louisiana's Courts of Limited Jurisdiction (Chicago, IL: 1973)

    National Center for State Courts, The Financing of the Louisiana Court System(Williamsburg, VA: December, 1980)

    National Center for State Courts, A Study of the Administration and Financing of the Orleans Parish Trial Courts, New Orleans, LA (Williamsburg, VA: 1989)

    Jackson Burson, Jr., "Not Endowed by Their Creator: State Mandated Expenses of Louisiana Parish Governing Bodies," Louisiana Law Review 50 (1990) 636-709

    Bureau of Governmental Research, Study of the Judicial/Parochial Agencies in Orleans Parish(New Orleans, LA: 1991)

    Committee on Consolidation of the Orleans Parish Courts (Schott Committee), Final Report (New Orleans, LA: 1991);

    Moon Landrieu, Report of the Chairman of the Commission to Study the Orleans Parish Judicial System (New Orleans, LA: 1993)

    Suzette D. Meiske and Ty Keller, “Civil Court Costs in the District Courts,” Louisiana Bar Journal 40, No. 6) 592-599

    Judicial Funding Commission SCR-113, January 13, 1995

    Police Jury Association, Surveys of Louisiana Parish Governments on Judicial Expenditures, 1986, 1988; 1991; 1998

    Justice System Funding Commission, Executive Order No. MJF 98-33

    Fiscal Information

    Louisiana Division of Administration, Revenue Estimating Conference, FY 2008-2009

    Louisiana Legislative Auditor, Financial Audits, 2008

    Louisiana Legislative Auditor, Comprehensive Annual Financial Report, 2009

    Louisiana Legislative Auditor, Single Audit Report, 2008

    National Association of State Budget Officers, The Fiscal Survey of States, Fall 2008

    National Association of State Budget Officers, State Expenditure Report, 2008

    United States Bureau of the Census, Census of Governments, Employment and Payroll Phase, 2007

    Unites States Bureau of the Census, Census of Governments, Finance Phase, 2007

    Health Care Reform

    Public Affairs Research Council, Hurricanes and Health Care Reform., April, 2006

    Public Affairs Research Council, Realigning Charity Health Care and Medical Education in Louisiana, May, 2007

    Pension Systems

    Public Affairs Research Council (PAR), “Public Employee Retirement: A Time for Change Executive Summary, March 2005

    Prison Costs

    Alison Lawrence, Cutting Corrections Costs, Earned Time Policies for State Prisoners, National Conference of State Legislatures, July, 2009

    Justice Police Institutes, Pruning Prisons: How Cutting Corrections Can Save Money and Protect Public Safety, May, 2009

    Native American and Alaskan Technical Assistance Project (NAATAP, Project Gyide: Alternatives to Incarceration of Offenders, 2005

    James L. Stephan, State Prison Expenditures, 2005, U.S. Department of Justice, Bureau of Justice Statistics, Special Report,

    Vera Institute, The Fiscal Crisis in Corrections, Rethinking Policies and Practices, July, 2009 Update

    Vera Institute, “States Cutting Corrections Costs, July 30, 2009

    Tax Information

    Iris J. Lav, Jason Levine, and Elizabeth McNichol, “Eliminating Louisiana’s Income Tax Will Harm the State’s Budget Outlook, Competitiveness,” Center for Budget Policy Priorities, May 12, 2008

    Institute on Taxation and Economic Policy, “How Will the 2006 Special Session Affect Louisiana Tax Fairness?” December 12, 2006

    Institute on Taxation and Economic Policy, “Revenue Raising Plans for Louisiana: Who Pays?, Aprll, 2006

    Louisiana Department of Revenue, Tax Collection Report, FY 2008-2009

    Louisiana Department of Revenue, Tax Exemption Budget, FY 2008-2009

    Louisiana Tax Commission, Annual Report, 2008

    National Conference of State Legislatures, State Tax Actions, 2007

    Public Affairs Research Council, (PAR” “PAR Says Proposed Tax Cut is Shortsighted Fiscal Policy, May 30, 2008

    Unified Trial Court System

    Ashman, Allan, and Jeffrey Parness, The Concept of a Unified Court System," DePaul Law Review 24 (Fall, 1974) 1-41

    Berkson, Larry and Susan Carbon, Court Unification: History, Politics and Implementation (Washington, D.C.: National Institute of Law Enforcement and Criminal Justice, Law Enforcement Assistance Administration, Department of Justice, August, 1978)

    Gazell, James A., "Lower-Court Unification in the American States," Arizona State Law Journal 1974 (1974) 653-687

    Henderson, Thomas A., and Cornelius Kerwin, Structuring Justice: The Implications of Court Reforms (Washington, D.C.: National Institute of Justice, Department of Justice, March, 1984)

    McWilliams, J. Wesley, "Court Integration and Unification in the Model Judicial Article," Journal of the American Judicature Society 47 (June, 1963) 13-

    Minteer, David, "Trial Court Consolidation in California," UCLA Law Review 21 (April, 1974) 1081-

    National Advisory Commission on Criminal Justice Standards and Goals, Courts (Washington, D.C.: Government Printing Office, 1973)

    Nelson, Dorothy, "Should Los Angeles County Adopt a Single-Trial-Court Plan?,"

    Gazell, James A., "Lower-Court Unification in the American States," Arizona State Law Journal 1974 (1974) 653-687

    Henderson, Thomas A., and Cornelius Kerwin, Structuring Justice: The Implications of Court Reforms (Washington, D.C.: National Institute of Justice, Department of Justice, March, 1984)

    McWilliams, J. Wesley, "Court Integration and Unification in the Model Judicial Article," Journal of the American Judicature Society 47 (June, 1963) 13-

    Minteer, David, "Trial Court Consolidation in California," UCLA Law Review 21 (April, 1974) 1081-

    National Advisory Commission on Criminal Justice Standards and Goals, Courts (Washington, D.C.: Government Printing Office, 1973)

    Nelson, Dorothy, "Should Los Angeles County Adopt a Single-Trial-Court Plan?," Southern California Law Review 33 (Winter, 1960) 117-

    Pound, Roscoe, "Organization of Courts," Journal of the American Judicature Society 11 (October, 1927 69

    Pound, Roscoe, "The Causes of Popular Dissatisfaction with the Administration of Justice," Journal of the American Judicature Society 20 (February, 1937) 178-187

    Pound, Roscoe, Organization of Courts (Boston, MA: Little, Brown and Co., 1940)

    Pound, Roscoe, "Principles and Outline of a Modern Unified Court Organization," Journal of the American Judicature Society 23 (April, 1940) 225-233

    Rubin, H. Ted, The Courts: Fulcrum of the Justice System (Pacific Palisades: Goodyear Publishing Co., 1976)




    GLOSSARY



    Accounting System:The total structure of records, methods and procedures used by accounting professionals to identify, present, classify, and record information on the financial position and operation of governmental units or their funds, account groups, and organizational components, and to maintain financial accountability.

    Administrative Fees:Fees charged by the executive branch agencies for services performed by the executive branch. The term is usually equivalent to an executive branch user charge or service fee.

    Ad Valorem Property Taxes:Taxes based on the assessed value of real estate or personal property.

    Agency:Any office, board, commission, institution, division, or functional group in the executive, legislative, or judicial branches of state government.

    Agency Funds:Funds where the holder agrees to remit the assets, the income from the assets, or both to a legally specified beneficiary in due course at a specified time.

    Alcohol Beverage Tax: An excise tax on the sale, distribution, or importation of alcoholic beverages within a state.

    Ancillary Appropriation Act: In Louisiana, an appropriation act providing for the ancillary expenses of state government, that are not provided in the general, legislative, judicial, and supplemental appropriations acts.

    Appropriation: An authorization by the legislature to a budget unit for a program or sub-program to expend from public funds s sum of money for the purposes indicated in the appropriation.

    Appropriation Acts: In Louisiana, the acts authorizing expenditures in accordance with the general appropriations act, the legislative appropriations act, the judicial appropriations act, the supplemental appropriations act, and the ancillary appropriation act.

    Authorized Positions: The number of salaried positions approved by the legislature in an appropriations act, which may be adjusted during a fiscal year in accordance with established procedures.

    Asset:An economic resource having value.

    Asset Forfeiture: The confiscation of assets by the state which are either the proceeds of a crime or the instrumentality of a crime.

    Audits: The examination of documents, records, reports, systems of internal control, accounting and financial procedures and other matters for the purpose of assuring accuracy of reporting, compliance with laws and procedures, and to recommend efficiencies and corrective actions.

    Balance Sheet: A basic, typical financial statement, usually accompanied by appropriate disclosures, that provides information on the basis of accounting and the entity’s assets, liabilities, reserves, and net worth or fund balances.

    Bond Forfeiture: The forfeiture by a criminal or juvenile offender of a bond or other security.

    Budget: The plan for guiding the expenditure of funds of state government as a whole and of each of its component agencies.

    Budget Unit: In Louisiana, any agency of state government that is considered to be a budget unit by the Division of Administration or by the legislature.

    Calendar Year: The 12-month year from January 1 to December 31.

    Capital Outlay Act: In Louisiana, the budget associated with the acquisition or construction of major capital items, including land, buildings, structures, and equipment.

    Capital Outlays: Expenditures for acquiring lands, buildings, equipment, or other properties, or for their preservation, development or permanent improvement.

    Capital Projects Funds: Funds used by a public entity to account for all resources to be used for the construction or acquisition of capital projects, except those financed by proprietary or fiduciary funds.

    Combined Financial Statements: Financial statements that present combined financial data for various fund types in separate adjacent columns.

    Component Units: The units of government that have been separated by law and which are required by law or accounting practice to maintain, accounts for, and reports on financial statements.

    Comprehensive Annual Financial Report (CAFR): The financial report that encompasses all funds and component units of state government or its branches.

    Corporate Income Taxes: Taxes on net income that are required to be paid by corporations and all entities taxed as corporations for federal income tax purposes.

    Corporate Franchise Taxes: In Louisiana, taxes that are levied on corporations organized as corporations under Louisiana law, or qualified to do business in Louisiana, exercising the right of a continuing charter, or owning or using any of the corporate capital, plant or other property in the state as a corporate capacity.

    Consensus Estimating Conference: In Louisiana, a joint legislative-executive body representing major policy functions for the purpose of developing a five-year base-line budget projection.

    Cost-Benefit Analysis: A management tool that involves calculating or estimating the known costs and potential benefits of a course of action under consideration.

    Court Costs: The charges assessed by court in a civil or criminal matter to pay for or offset the costs of the court process.

    Criminal Court Costs: Charges assessed by a court against a criminal defendant who has been found or who has plead guilty to a criminal charge

    Endowment Funds: Trust funds whose principal amounts must be maintained inviolate but whose income may be expended periodically.

    Enterprise Funds: Funds that are established by governmental entities to finance and account for the acquisition, operation and maintenance of public facilities and services which are predominantly self-supporting from user charges or from special enterprise fees and charges.

    Excise Taxes: Excise taxes are taxes paid when purchases are made on a specific good, such as gasoline. Excise taxes are often included in the price of the product. There are also excise taxes on activities, such as on wagering or on highway usage by trucks. Excise Tax has several general excise tax programs. One of the major components of the excise program is motor fuel.

    Executive Budget: The document submitted to the legislature at each regular session, pursuant to the provisions of Title 39 of the Revised Statutes of Louisiana and Article VII, Section 11(A) of the Constitution of Louisiana, presenting the governor's recommended complete financial plan and programmatic plan for the ensuring fiscal year. The Executive Budget must include recommendations for appropriations from the state general fund and dedicated funds; however, these recommendations must not exceed the official forecast of the Revenue Estimating Conference.

    Expenditures: Expenses of public entities that are reported periodically in terms of categories of expenses that are established by law, accounting practices, or by custom.

    Federal funds: Revenues received by state or local governments from federal grants, revenue sharing, or other federal programs.

    Fees:Charges for services or for the processing of permits and licenses.

    Fiduciary Funds: Funds held by a public body, ordinarily as an agent or trustee, in a fiduciary capacity for an external bodies, who may or not be public entities.

    Fines:Charges assessed and collected for administrative violations or violations of criminal law.

    Fiscal Year: A twelve-month accounting period during which assets, liabilities, fund balances, revenues, expenditures, and budgets are accounted for. In Louisiana, the fiscal year of state government is from July 1 through June 30th.

    Franchise Taxes: See Corporate Franchise Taxes.

    Forfeitures:See Asset Forfeiture or Bond Forfeitures.

    Fund: An independent an fiscal accounting entity with a self-balancing set of accounts that record balance sheets, statements of revenues, expenditures, and fund balances, and budgets. In Louisiana, the following types of state funds are typically used : the general funds, special funds, agency funds, enterprise funds, and fiduciary funds.

    Fund Balances: Fund balances are the differences between the revenues and expenditures reported on the financial statements and balance sheets of financial entities.

    Gasoline Taxes: See Motor Fuel Taxes and Excise Taxes.

    General Funds: Public Funds which are used to account for assets, liabilities, fund balances, revenues, expenditures, and budgets which are not accounted for in other funds such as special funds, agency funds, enterprise funds, fiduciary funds and other special funds.

    General Revenues: Revenues that are not restricted by constitutional or statutory dedication in terms of use.

    Goals: General statements of highly desirable outcomes.

    Internal Service Funds: Funds used by public entities to finance and account for goods and services purchased usually through other public entities.

    Interim Emergency Board: In Louisiana, a board composed of the governor, lieutenant governor, state treasurer, presiding officer of each house of the legislature, chair of the Senate Finance Committee, and chair of the House Appropriations Committee, or their designees, that may appropriate money between legislative sessions from the state general fund or borrow on the full faith and credit of the state an amount to meet an emergency.

    Income Taxes: Taxes levied on the financial income of persons, corporations, or other legal entities.

    Hotel-Motel Taxes: Charges for sleeping accommodations, meeting rooms, and banquet rooms in a hotel or motel.

    Joint Legislative Committee on the Budget: A joint committee of the legislature that serves as the budgetary and fiscal representative of the legislature to assist in the discharge of the legislature’s fiscal and budgetary responsibilities. It provides the legislature with information relative to those responsibilities from a source created by and responsible solely to the members of the legislature. The committee is composed of the members of the House Appropriations Committee, the Senate Finance Committee, and the chairs of the House Ways and Means Committee and Senate Revenue and Fiscal Affairs Committee.

    Key Objectives: In Louisiana, an objective that is included in the executive budget, the general appropriation act, the judicial appropriations act, or the ancillary appropriation act. For tracking progress, , a key objective must be accompanied by at least one key performance indicator; a key objective may have supporting and general performance information indicators as well.

    Key Performance Indicators: In Louisiana. a performance indicator that is included in the executive budget, the general appropriation act, or the ancillary appropriation act.

    Liabilities: Debts or other legal obligations arising out of transactions in the past that must be liquidated.

    Licenses and Permits: Charges for allowing a person to have a limited right to perform a designated function.

    Louisiana Performance Accountability System (LaPas): An electronic database that tracks performance standards and actual performance information for Louisiana's state departments and agencies. The departments and agencies submit quarterly performance progress reports to LaPAS via the Internet. The Office of Planning and Budget (OPB) in the Division of Administration is the official record keeper and repository of performance data and maintains LaPAS.

    Mission: A broad, comprehensive statement of purpose. The mission identifies what the organization does (or should do) and for whom it does it. It describes the organization's products or services and its customers. The mission is part of an organization's identity. The mission is all encompassing and rarely changed; it is the ultimate rationale for the existence of an organization.

    Motor Fuel Taxes: Excise taxes on gasoline, diesel, and other motor fuels.

    Objectives: More precise statements of goals, sometimes expressed in quantitative terms.

    Operational Plan: In Louisiana, the annual work plan of an agency and its component programs, which indicates the implementation of the agency’s strategic plan for a specific fiscal year, and which describes agency and program missions, goals, objectives, activities, and performance indicators. It indicates what portion of a strategic plan will be addressed by a program during an operational period. The operational plan is part of an agency’s total budget request.

    Outcome: Evidence or demonstration of the actual impact or public benefit of a program. Outcomes are results. They are the changes or accomplishments that are actually achieved.

    Outcome Indicators: Indicators that measure success. They measure results and assess program impact and effectiveness. (These indicators were called "effectiveness indicators" in prior years.)

    Output: The quantity of actual service or product delivered by an agency or program. Outputs are units produced or services provided by a program.

    Output Indicators: Indicators that measure quantity. They measure the amount of products or services that are provided .

    Performance Accountability:

    A means of judging policies and programs by measuring their outcomes or results against agreed upon standards. Performance accountability systems are composed of three components--defining outcomes; measuring performance; and reporting results.

    Performance Audit:An evaluation of the efficiency and effectiveness with which an organization is carrying out its mission and achieving its goals and objectives.

    Performance Indicator:In Louisiana, a statement identifying an activity, input, output, outcome, achievement, ratio, efficiency, or quality to be measured relative to a particular goal or objective in order to assess an agency’s performance. A performance indicator also means a measurement of any other aspect of performance as determined by rule issued by the commissioner of administration under the provisions of the Administrative Procedure Act. Performance indicators are the tools used to measure the performance of policies, programs, and plans. Five types of indicators are used: input, output, outcome, efficiency, and quality.

    Performance Standard: The expected level of performance associated with a particular performance indicator for a particular fiscal year and funding level. Performance standards are proposed during the budget development process and established during the appropriation process. Performance standards are commitments for service that are linked with the level of funding budgeted/appropriated.

    Pension Trust Funds:Special fiduciary funds used to maintain, account for, and report on resources that are held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, or other post-employment benefit plans.

    Policy: A conceptual "road map," reflecting aspirations, values, intents, commitments, and priorities. Policies are select courses of action that guide governmental decisions affecting the lives of citizens. They frequently encompass a complex set of programs and activities. Policies are generally stated in terms of goals or outcomes for whole groups of people. Often they represent an agenda or set of priorities for state actions or spending.

    Policy Accountability: Accountability that focuses on whether a complex set of state programs and actions are achieving goals and objectives.

    Policy Areas: Broad groupings of state functions that are interrelated. Most government functions and services can be included in one of seven basic policy areas: Education, Economic Development, Environment and Natural Resources, Infrastructure, Human Resources, Public Safety, and General Government.

    Policy Development: The process of setting policy; it is analysis and decision making for results. It includes a range of analytic and often highly creative activities that seek to meet public demand for positive response to increasingly complex issues.

    Policy Planning: A process that analyzes the future implications of certain policy, program, and resource allocation options. It addresses the need for rationally integrated goals, priorities, and rules of administrative conduct and attempts to relate past and present conditions and trends of state growth to state legislative and budget options. Policy planning and strategic planning share common characteristics and methods.

    Program Accountability: Accountability that usually measures outcomes only for those people served by a particular program or set of programs.

    Program Budgeting: Refers to budgets that are formulated and appropriations that are made on the basis of expected results of services to be carried out by programs. It appropriates to budget units by program, not by line item or expenditure category.

    Program Evaluation: The systematic examination of a specific program or activity to provide information on the full range of the program's short- and long-term effects. While program evaluation may include consideration of workload measures, operating procedures, or staffing, its main focus is on measuring effectiveness (the degree to which a program is achieving its intended purpose and attaining its objectives, and whether it is having positive and/or negative impact.)

    Program Planning: Planning that spans only a closely related group of activities that have been administratively defined as a program. A single program may or may not be an organizational unit, but is commonly used as a basic budgetary unit. Program planning is narrowly focused as to subject and has common features with operational planning. It examines specific ways to implement identified policies and strategies.

    Proprietary Funds: Funds held by publics entities that maintain, account for, and report on financial transactions that are similar to or based on commercial or business-like activities.

    Property Taxes: See Ad Valorem Taxes.

    Revenue: Revenue is the income received by a government from external sources, net of refunds and other correcting transactions, other than the issuance of debt, sale of investments, and agency or private trust transactions. Revenues include taxes, intergovernmental receipts, collection fees, service fees, court costs, utility charges, university tuition and fees.

    Royalties: The prices paid by private entities to state governments for the right to develop a natural resource.

    Sales and Use Taxes: Consumption taxes charged at the point of purchase for certain goods and services. The tax is usually set as a percentage by the government charging the tax. There is usually a list of exemptions. The tax can be included in the price (tax-inclusive) or added at the point of sale (tax-exclusive). Most sales taxes are collected by the seller, who pays the tax over to the government which charges the tax. The economic burden of the tax usually falls on the purchaser, but in some circumstances may fall on the seller. Sales taxes are commonly charged on sales of goods, but many sales taxes are also charged on sales of services. Ideally, a sales tax is "fair", has a high compliance rate, is difficult to avoid, is charged exactly once on any one item, and is simple to calculate and simple to collect. Governments employ use taxes to accomplish two purposes. A use tax may be imposed to prevent someone from evading a sales tax by buying goods in a non-taxing state and shipping them into the state that imposes the sales tax. Use taxes are also used to help defray the cost of public services associated with particular types of personal property. States and municipalities impose use taxes on purchases or rentals that are made outside the taxing jurisdiction but would have been taxable had they taken place within it. Such transactions escape the normal sales tax collection because retailers outside the state or municipality are not required to collect the sales tax. The use tax protects retailers located in the state or municipality because it removes the incentive for consumers to shop outside that locality in order to avoid paying the sales tax. For example, suppose a person buys a car from a dealer in a nearby state that does not impose a sales tax. The buyer must pay a use tax on the purchase price when he returns to his state or city.

    Service Fees: A governmental charge for a service rendered to a uses of that service.

    Severance Taxes: Excise taxes on natural resources "severed" from the earth. They are measured by the quantity or value of the resource removed or produced. In the majority of states, the taxes are applied to specific industries such as coal or iron mining and natural gas or oil production. They are usually payable by the severer or producer, although in a few states payment is made by the first purchaser. The taxes usually are imposed at a flat rate per unit of measure, with coal and ore mining taxes levied on a tonnage basis, oil production taxes on a per barrel basis, and gas production taxes on a per foot basis, although the rates may be graduated based on volume of production or value of the products. "Value" may mean market value in some states and gross value in others. Taxable net value or net proceeds are determined by deducting certain items from the gross value or gross proceeds. Examples of deductions include production costs, ad valorem taxes and royalties paid. Evaporation for gas wells also might qualify as a deduction.

    Special Revenues: Revenues dedicated by law for specific purposes or revenues not regarded as general revenues.

    Special Revenue Funds: Funds used by public entities to maintain, account for, and report on the proceeds of special operating revenues, e.g. dedicated taxes.

    Stakeholders: Groups or individuals who have a vested interest in an organization. Stakeholders do not necessarily use the products or receive the services of an organization. For example, contract service providers have a stake in certain health, social services, and corrections programs.

    State Budget: A complete state budget for a fiscal year. After the passage of the appropriation and revenue acts, but not later than October 1 of each year, the Office of Planning and Budget prepares a state budget. This budget includes all the details of the financial plan for the fiscal year, as to both expenditures and means of financing, as presented in the executive budget, with such revision as may be necessary to bring them into conformity with the appropriation and revenues acts and other acts to provide means of financing, and with the legislative provisions in effect, governing administration of the budget.

    Strategic Planning: Planning for results. It is a process of agency self-assessment and objective setting that considers an organization’s purpose, capacities and environment, and results in a strategic plan that determines a path for development of the organization’s resources in order to achieve meaningful results. It is a future-oriented process that is an essential part of quality management. Strategic planning emphasizes deployment of resources to achieve meaningful results.

    Strategy: The method used to accomplish goals and objectives.

    Sunset Review: The process through which, on a regular schedule, state agencies are required to justify their existence in order to continue that existence. Sunset review allows the legislature an opportunity and mechanism to evaluate the operations of state statutory entities to determine whether the merits of the entity's activities support its continuation. Sunset review, which runs on a six-year cycle, is the ultimate measurement of performance.

    Taxes: Compulsory contributions levied by a public entity on individuals or corporations irrespective of the exact amount of services rendered by the public entity. In Louisiana, the following taxes are levied: severance taxes, corporate income and franchise taxes, individual income taxes, general sales and use taxes, hotel-motel taxes, and ad valorem taxes.

    Tuition and Fees: The fees paid by students at public universities and colleges.

    User Charges: See Service Fees.

    Undesignated Fund Balance: Monies in the various government funds that are neither encumbered or reserved and, therefore, for general use.

    Unfunded Pension Liability: The difference between the value assigned to the retirement benefits already earned by the state’s employees and the assets the pensions funds will have on hand to meet those obligations.

    Use of Funds: Revenues generated from interest and dividend income.




    Trivia Quiz

    1. How many people were employed in the state government of Louisiana in FY 2007?:

    (a) 91,000; (b) 115,000; (c) 122,000; (d) no one knows for sure.


    2. How many state and statewide retirement systems are there in Louisiana?

    (a) One; (b) four; (c) nine; (d) thirteen


    3. How large are the total revenues of the state government of Louisiana in FY 2008-2009?

    (a) $29.6 billion; (b) $28.8 billion; (c) $13.4 billion; (d) no one knows.


    4. Is there a financing source that provides a total snapshot of the finances of the state government of Louisiana?

    (a) yes; (b) no


    5. Which state had the highest incarceration rate in the nation in 2007?

    (a) Texas; (b) Illinois; (c) New York; (d) Louisiana





    Answers



    1. (d)

    2. (d)

    3. (d)

    4. (b)

    5. (d)




    List of Data Charts



    Chart 1 Supreme Court Finances, FY 2008

    Chart 2 District Court Finances, FY 2008

    Chart 3 City and Parish Court Finances, FY 2008

    Chart 4 Justice of the Peace Finances, FY 2008

    Chart 5 Finances of the Parish Clerks of Court, FY 2008

    Chart 6 Finances of the Sheriffs, FY 2008

    Chart 7 Finances of the District Attorneys, FY 2008

    Chart 8 Finances of the Coroners, FY 2008

    Chart 9 Marshals and City Court Constables, FY 2008

    Chart 10 Finances of the Justice of the Peace Constables, FY 2008

    Chart 11 Judicial Branch Finances: Summary, Notes and Assumptions, FY 2008

    Chart 12 Pension Systems

    Chart 13 State Government Total Revenues and General Revenues, FY 2007

    Chart 14 State Government Total Revenues, Income Per Capita as a Percent of Personal Income, FY 2007

    Chart 15 Per Capita Federal Aid and Rank, FY 2007

    Chart 16 State and Local Government Tax Burden Per Capita, FY 2007

    Chart 17 State Government Total Expenses and General Expenses, FY 2007

    Chart 18 State Government Per Capita Total and General Expenses, FY 2007

    Chart 19 State Government Total Expenses Per Capita, Income Per Capita, and Total Expenses as a Percent of Personal Income, FY 2007

    Chart 20 State Government Education Expenses, FY 2007

    Chart 21 State Government Education Expenses (NASBO) , FY 2007

    Chart 22 State Government Education Expenses as a Percent of Total Expenses (NASBO), FY 2007

    Chart 23 State Government Higher Education Spending (NASBO), FY 2007

    Chart 24 State Government Higher Education Spending As a Percent of Total Spending (NASBO), FY 2007

    Chart 25 State Government Public Welfare Total and Per Capita Spending, FY 2007

    Chart 26 State Government Public Assistance Spending (NASBO), FY 2007

    Chart 27 State Government Public Assistance Spending As a Percent of Total Spending (NASBO), FY 2007

    Chart 28 State Government Hospital Spending, FY 2007

    Chart 29 State Government Health Spending, FY 2007

    Chart 30 State Government Highway Spending, FY 2007

    Chart 31 State Government Spending on Police Protection, FY 2007

    Chart 32 State Government Corrections Spending, FY 2007

    Chart 33 State Government Total and General Fund Spending on Corrections (NASBO), FY 2007

    Chart 34 State Government Corrections Spending As a Percent of Total and General Fund Spending, FY 2007

    Chart 35 Number of Adult Prisoners Under State Jurisdiction and Incarceration Rate (Kaiser), FY 2007

    Chart 36 State Inmates Housed in State and Local Facilities, Total State Inmates Per 100,000 Population, FY 2007

    Chart 37 State Government Spending on Natural Resources, FY 2007

    Chart 38 State Government Spending on Parks and Recreation, FY 2007

    Chart 39 State Government Spending on Administration, FY 2007

    Chart 40 Population, State and Local Total and Per Capita Direct General Expenditures, FY 2007

    Chart 41 State and Local Elementary and Secondary Education Spending, FY 2007

    Chart 42 State and Local Government Elementary and Secondary Education Per Pupil Revenues and Expenditures, FY 2006-2007

    Chart 43 State and Local Elementary and Secondary Education Revenues As a Percent of $1,000 Personal Income, FY 2006-2007

    Chart 44 State and Local Higher Education Expenses, FY 2007

    Chart 45 State and Local Government Public Welfare Expenses, FY 2007

    Chart 46 State and Local Government Hospital Expenses, FY 2007

    Chart 47 State and Local Government Health Expenses, FY 2007

    Chart 48 State and Local Government Employment Security Administration Expenses, FY 2007

    Chart 49 State and Local Government Veterans Service Expenses, FY 2007

    Chart 50 State and Local Government Highway Expenses, FY 2007

    Chart 51 State and Local Government Police Protections Expenses, FY 2007

    Chart 52 State and Local Government Corrections Expenses, FY 2007

    Chart 53 State and Local Government Natural Resource Expenses, FY 2007

    Chart 54 State and Local Government Parks and Recreation Expenses, FY 2007

    Chart 55 State and Local Government Financial Administration Expenses, FY 2007

    Chart 56 State and Local Government Other Governmental Administration, FY 2007

    Chart 57 State and Local Government Combined Financial Administration and Other Governmental Administration, FY 2007

    Chart 58 State and Local Government Buildings, FY 2007

    Chart 59 State and Local Government Judicial and Legal Expenses, FY 2007


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