Louisiana continues to add jobs and outperform the national economy, even during these challenging economic times.
Our mission in this legislative session is to take action to meet the budget challenges facing our state by making government do more with less in order to continue to move Louisiana forward down the path of business investment and job creation.
We have proposed five major budget and government reform initiatives, which make up several pieces of legislation in this session. These reform initiatives are designed to protect health care and higher education services in our state that are too often targeted for cuts during leaner budget years.
Our efforts to protect these critical areas have been endorsed by the Council for A Better Louisiana (CABL), the American Association of Retired Persons (AARP), the Rural Hospital Association, and the Louisiana Hospital Association (LHA).
As the state faces long-term budget challenges brought on by a decline in revenue and a significant loss in federal funds that will impact us next year and the year after next, we are faced with a choice: we can either pass the cost of government on to the Louisianans by raising taxes, or we can streamline government and make it do more with less.
We have said that raising taxes on our people is not an option. Instead, we are working with the legislature to pass our five reform initiatives targeted to streamline government, so we are making lasting changes that will help our state budget picture for years to come.
The current system of state government is too inefficient in too many areas. Government too often spends too much for too little result. We have proposed common-sense reforms that will allow us to control spending and make government more efficient.
We have already taken steps to start implementing the first reform by creating the Commission on Streamlining Government, which will examine each state agency’s statutory and constitutional duties in an effort to reduce the size of state government.
Many state agencies were created 30 years ago and served a purpose that may or may not be relevant today. The Commission on Streamlining Government will propose how we can combine government programs in many areas, with the aim of protecting critical services like higher education and health care.
Next, we are working to reform higher education spending by changing the funding formula so that it focuses dollars on performance and connects funding more towards the missions of our colleges and universities. By more closely aligning funding with performance and academic programs that produce graduates in critical shortage areas, we will take another step towards strengthening our workforce and making our state more competitive in the global economy.
Third and very importantly, we are working to implement four fiscal reforms that will increase flexibility in the budget process to help find savings in all budget areas without having to make dramatic cuts from the unprotected areas of health care and higher education.
We will authorize the automatic sunsets of all dedicated funds beginning at the end of the next fiscal year, July 1, 2010, with renewed or newly created dedications to sunset every four years thereafter. This will help ensure that dedicated funds are going to high-performing programs instead of those simply being protected by statute.
We will work to implement an annual review of statutorily and constitutionally dedicated activities, similar to the Activity Performance Review the Division of Administration conducts for funds supported through the general fund. Every program should compete for our tax dollars, especially during leaner budget years.
We should have all the options on the table and every area of government should compete for every dollar in the budget.
Currently, when a deficit is projected, the state’s constitution only allows for reductions to statutory dedications up to five percent. As part of our fiscal reforms, we are working to increase this limit to 10 percent in order to provide far greater flexibility in identifying potential cost savings when revenue falls.
Finally, current law says that five percent reductions to statutory dedications can only be made over a two-year period. This does not help us when we face revenue declines for several years in a row – as we are now. We will eliminate this two-year rule, creating more flexibility on a yearly basis to strategically reduce spending in areas other than the unprotected areas of higher education and health care.
Fourth, we will work to make the Minimum Foundation Program (MFP) education funding formula more accountable and transparent. The MFP formula currently has additional costs associated with educating students living in poverty, and those who need special education services, career and technical education, and a more challenging curricula.
However, because the MFP is a block grant, there is no accounting for how these targeted funds are used to benefit these targeted students. We will put this funding information online so parents can see how schools are using these targeted dollars to support targeted student populations.
Our fifth and final reform aims to make much-needed changes to our state’s civil service system. Like employees of any business, state salaries should be tied to job performance and they should not continue to increase without any regard to how well employees perform their duties.
These five reform initiatives to streamline government are absolutely essential in making Louisiana do more with less in order to protect our economy at this critical time.
We know that raising taxes or running ourselves into massive debt will not help us in our efforts to continue to attract businesses to Louisiana so they create high-paying jobs for our people. Instead, we must roll up our sleeves, like any family or small business, and fine efficiencies and cost savings wherever we can.
By working together with the legislature on these initiatives we can meet the multiple-year challenges facing our state budget by tightening the belt on state government and protecting critical services like higher education and health care. Even during this national economic downturn, we will absolutely not waiver from continuing to move our state forward toward greater prosperity, job creation and economic growth.