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Dec 14, 2012
Governor Jindal Acts on Mid-Year Budget Reductions that Help Protect Higher Education and Health Care Funding

BATON ROUGE – Today, Governor Bobby Jindal took action on budget reductions to address the state’s $165.5 million mid-year budget deficit while helping to protect higher education and healthcare funding.

The Governor implemented his statutorily provided unilateral authorities to eliminate the deficit, using a combination of his authority to reduce general fund by up to 3 percent of total appropriation by budget unit and his authority to order expenditure freezes.

However, while the Governor’s authority enables him to make across-the-board reductions to address the deficit, under this scenario higher education and healthcare would be largely unprotected. Instead, Governor Jindal protected higher education and healthcare by taking a responsible approach to issue executive orders that make targeted reductions by agency.  While the state budget has been reduced by roughly $9 billion dollars, or 26 percent, since 2008, total funding for higher education has been reduced by roughly $220 million, or 7 percent.  

To eliminate the deficit, departments were asked to identify targeted cost-saving measures to cut spending while protecting critical services.  For many departments, these savings came as a result of reducing operational expenses in travel, supplies, acquisitions, operational and professional services, contracts, streamlining programs, as well as finding general fund savings by utilizing other sources of funding.  In addition, savings of $19.7 million were achieved as a result of the hiring freeze implemented earlier in the fiscal year.

The Governor’s plan also funds the increased student counts for the Minimum Foundation Program (MFP) for K-12 education as well as for TOPS scholarships. Taking into account the new dollars committed to the MFP in this plan, total MFP funding will have increased by over $325 million, or 10.5 percent, since Governor Jindal entered office. 

Governor Jindal said, “In order to protect higher education and health care funding, we looked agency by agency to make strategic reductions that continue our mission of making government more efficient and less expensive for taxpayers. Most importantly, we are continuing our goal of fostering an environment in Louisiana where businesses can invest and create opportunities for our people.” 

While the Constitution allows 30 days for the Governor to eliminate a deficit, Governor Jindal took immediate action because if departments continued making expenditures based on the current budget it would only mean more severe reductions in the future.  The governor’s swift action addressing past shortfalls has earned Louisiana favorable assessments from credit rating agencies, as Fitch has positively noted Louisiana’s “continued timely action to maintain budget balance,” while Moody’s has cited “the state’s speedy responses to downward revenue projections.”

Governor Jindal’s Spending Reduction Executive Order

EXECUTIVE ORDER NO. BJ 2012 - 24
                                                  
                            EXECUTIVE BRANCH – EXPENDITURE REDUCTION

WHEREAS,              pursuant to R.S. 39:75(A)(1), the Division of Administration is directed to submit a monthly budget status report to the Joint Legislative Committee on the Budget (hereafter "the Committee") indicating the balance of the budget for the State General Fund and dedicated funds by comparing the official forecast for these funds to the total authorized appropriations from each fund; once approved by the Committee, the most recent budget status report becomes the official budget status of the State;

WHEREAS,              if the most recently approved budget status report indicates that the total appropriation from any fund will exceed the official forecast for that fund, R.S. 39:75(B) requires the Committee to immediately notify the Governor that a projected deficit exists for that fund; 

WHEREAS,              the Committee notified the Governor that it approved a budget status report at its December 14, 2012 meeting, indicating a projected deficit of One Hundred Sixty-Five Million Four Hundred Sixty-Four Thousand Six Hundred Eighty-Nine Dollars ($165,464,689) exists in the State General Fund for Fiscal Year 2012-2013, based in part on the revised official forecast of revenue available for appropriation adopted by the Revenue Estimating Conference on December 13, 2012, compared to total appropriations; 

WHEREAS,              once notified that a projected deficit exists, pursuant to Article VII, Section 10, of the Constitution of Louisiana, R.S. 39:75(C)(1)(a), and R.S. 39:75(C)(3), the Governor has interim budget balancing powers to adjust the budget, including the authority to reduce appropriations for the executive branch of government for any program that is appropriated from a fund that is in a deficit posture, not exceeding three percent (3%) in the aggregate of  the total appropriations for each budget unit for the fiscal year, issuing executive orders in the form of freeze orders prohibiting the expenditure of monies, and if the Governor does not make necessary adjustments in the appropriations to eliminate the projected deficit within  thirty (30) days of the determination of the projected deficit in a fund, R.S. 39:75(D) mandates that the Governor call a special session of the Louisiana Legislature for that purpose; 

WHEREAS,              as authorized by R.S. 39:75(C)(1)(a), I am exercising my unilateral interim budget balancing powers to reduce the projected deficit by $127,835,080;

WHEREAS,              after utilizing that authority, $37,629,609 remains of the projected deficit which must be eliminated, therefore I am issuing an executive order expenditure freeze pursuant to R. S. 39:75(C)(3) to eliminate the remaining amount of the projected deficit; 

WHEREAS,              this Executive Order and the Executive Order Expenditure Freeze may utilize all or a portion of the General Fund dollar savings objective specified in Executive Order BJ 2012-6.

NOW THEREFORE, I, Bobby Jindal, Governor of the State of Louisiana, by virtue of the authority vested by the Constitution and laws of the State of Louisiana, do hereby order and direct as follows:

SECTION 1:              The following departments, agencies, and/or budget units (hereafter "Unit" and/or "Units") of the executive branch of the State of Louisiana, as described in and/or funded by appropriations through Act 13 of the 2012 Regular Session of the Louisiana Legislature (hereafter "the Act"), shall reduce expenditure of funds appropriated to the Unit from the State General Fund by the Act, in the amounts shown below:
                                                            
                                                Act 13 - General Operating Appropriations Act:

Schedule 01-Executive Department State General Fund
01-102 Inspector General $                 54,859 
01-103 Mental Health Advocacy Service $                 40,000 
01-107 Division of Administration $          18,898,785 
01-111 Governor’s Office of Homeland Security $               381,054 
01-112 Military Affairs $            1,082,099 
01-126 Board of Tax Appeals $                 17,125
01-129 Louisiana Commission on Law Enforcement $               331,563 
Schedule 03-Veterans Affairs
03-130 Veteran's Affairs $               596,943 
Schedule 04-Elected Officials
04-139 Secretary of State $            1,000,000 
04-160 Agriculture and Forestry          $               102,412   
Schedule 05-Economic Development
05-251 Office of the Secretary $               430,199 
Schedule 06-Culture, Recreation and Tourism
06-264 Office of State Parks $               932,134 
Schedule 08-Corrections Services
08A-400 Corrections Administration $            1,169,019 
08A-401 C. Paul Phelps Correctional Center $               585,496 
08A-402 Louisiana State Penitentiary $            1,777,086
08A-405 Avoyelles Correctional Center $               508,439 
08A-406 Louisiana Correctional Institute for Women $                 79,112 
08A-409 Dixon Correctional Institute $                 48,510 
08A-413 Elayn Hunt Correctional Center $               353,571 
08A-414 David Wade Correctional Center $               718,873 
08A-412 B. B. Sixty Rayburn Correctional Center $               139,409 
08A-415 Adult Probation and Parole $            1,200,000 
Schedule 08-Youth Services
08C-403 Office of Juvenile Justice $            3,637,542 
Schedule 09-Health and Hospitals
09-300 Jefferson Parish Human Services Authority $               206,799 
09-301 Florida Parishes Human Services Authority $               141,461 
09-302 Capital Area Human Services District $               119,266 
09-304 Metropolitan Human Services District $               299,969 
09-305 Medical Vendor Administration $            1,196,804 
09-306 Medical Vendor Payments $          46,510,044 
09-307 Office of the Secretary $                   3,500 
09-309 South Central Human Services Authority $                 18,446 
09-320 Office of Aging and Adult Services $               103,839 
09-326 Office of Public Health $            2,128,387 
09-330 Office of Behavioral Health $               860,151 
09-340 Office of Citizens with Developmental Disabilities $               170,280 
Schedule 10-Department of Children and Family Services
10-360 Office of Children and Family Services $            3,153,009 
Schedule 11-Natural Resources
11-434 Office of Mineral Resources $               180,321 
Schedule 17-State Civil Service
17-562 Ethics Administration $                 60,838 
17-563 State Police Commission $                 17,276 
17-564 Division of Administrative Law $                 10,217 
Schedule 19-Higher Education
19A-HIED $          22,000,000 
19A-661 Office of Student Financial Assistance $               834,387
Schedule 19-Special Schools and Commissions
19B-653 Louisiana School for the Deaf and Visually Impaired $               230,000 
19B-666 Board of Elementary and Secondary Education $                 18,879 
Schedule 19-Education
19D-681 Subgrantee Assistance $            8,255,913 
19D-697 Non-Public Educational Assistance $                   6,868 
19D-699 Special School Districts $               440,015 
Schedule 20-Other Requirements
20-451 Local Housing of State Adult Offenders $            2,527,793
20-452 Local Housing of State Juvenile Offenders $               159,267 
20-930 HIED Debt Service and Maintenance $               631,159
20-931 LED Debt Service and State Commitments $            1,796,608
20-XXX Funds $            1,669,354 

SECTION 2:             A.        No later than December 28, 2012, the head of each Unit listed in Section 1 of this Order shall submit to the Commissioner a mid-year budget reduction plan, on the BA-7 form and questionnaire, which reflects the Unit’s proposed allocation of the expenditure reduction ordered in Section 1 of this Order (hereafter "mid-year budget reduction plan"), and a description of the methodology used to formulate the mid-year budget reduction plan.  

B.        In the event that positions of employment will be affected by the mid-year budget reduction, these positions should be included in your mid-year budget reduction plan.

C. No Unit shall implement the expenditure reduction mandated by Section 1 of this Order without the Commissioner’s prior written approval of the Unit’s mid-year budget reduction plan.

D. After the Commissioner has given approval of a Unit’s mid-year budget reduction plan, any change to the mid-year budget reduction plan requires prior written approval from the commissioner.

SECTION 3:              The Commissioner is authorized to develop additional guidelines as necessary to facilitate the administration of this Order.  

SECTION 4:              All departments, commissions, boards, offices, entities, agencies, and officers of the State of Louisiana, or any political subdivision thereof, are authorized and directed to cooperate in the implementation of the provisions of this Order.

SECTION 5:              This Order is effective upon signature and shall remain in effect through June 30, 2013, unless amended, modified, terminated, or rescinded prior to that date.
 
IN WITNESS WHEREOF, I have set my hand officially and caused to be affixed the Great Seal of Louisiana, at the Capitol, in the city of Baton Rouge, on this 14th day of December, 2012.


___________________________
GOVERNOR OF LOUISIANA

ATTEST BY
THE GOVERNOR

_______________________
SECRETARY OF STATE

Governor Jindal’s Expenditure Freeze Executive Order

EXECUTIVE ORDER NO. BJ 2012-25                                            
                                                                              
                                EXECUTIVE BRANCH – EXPENDITURE FREEZE

WHEREAS,              pursuant to R.S. 39:75(A)(1), the Division of Administration is directed to submit a monthly budget status report to the Joint Legislative Committee on the Budget (hereafter "the Committee") indicating the balance of the budget for the State General Fund and dedicated funds by comparing the official forecast for these funds to the total authorized appropriations from each fund; once approved by the Committee, the most recent budget status report becomes the official budget status of the State;

WHEREAS,              if the most recently approved budget status report indicates that the total appropriation from any fund will exceed the official forecast for that fund, R.S. 39:75(B) requires the Committee to immediately notify the Governor that a projected deficit exists for that fund; 

WHEREAS,              the Committee notified the Governor that it approved a budget status report at its December 14, 2012 meeting, indicating a projected deficit of One Hundred Sixty-Five Million Four Hundred Sixty-Four Thousand Six Hundred Eighty-Nine Dollars ($165,464,689) exists in the State General Fund for Fiscal Year 2012-2013, based in part on the revised official forecast of revenue available for appropriation adopted by the Revenue Estimating Conference on December 13, 2012, compared to total appropriations; 

WHEREAS,              once notified that a projected deficit exists, pursuant to Article VII, Section 10, of the Constitution of Louisiana, R.S. 39:75(C)(1)(a), and R.S. 39:75(C)(3), the Governor has interim budget balancing powers to adjust the budget, including the authority to reduce appropriations for the executive branch of government for any program that is appropriated from a fund that is in a deficit posture, not exceeding three percent (3%) in the aggregate of  the total appropriations for each budget unit for the fiscal year, issuing executive orders in the form of freeze orders prohibiting the expenditure of monies, and if the Governor does not make necessary adjustments in the appropriations to eliminate the projected deficit within  thirty (30) days of the determination of the projected deficit in a fund, R.S. 39:75(D) mandates that the Governor call a special session of the Louisiana Legislature for that purpose; 

WHEREAS,              as authorized by R.S. 39:75(C)(1)(a), I have exercised my unilateral interim budget balancing powers to reduce the projected deficit by $127,835,080;

WHEREAS,              after utilizing that authority, $37,629,609 remains of the projected deficit which must be eliminated, therefore I am issuing an executive order expenditure freeze pursuant to R. S. 39:75(C)(3) to eliminate the remaining amount of the projected deficit; 

WHEREAS,              this Executive Order and the Executive Order Expenditure Reduction may utilize all or a portion of the General Fund dollar savings objective specified in Executive Order BJ 2012-6.

WHEREAS,              the Preamble Section 18(F) of Act 13 of the 2012 Regular Session of the Louisiana Legislature (hereafter "the Act") authorizes and directs the Commissioner of Administration to reduce the budget by $15,000,000 in State General Fund (hereafter “preamble reductions”);

WHEREAS,              after a total of $3,221,158 in preamble reductions have already been implemented via vetoes within the Act, $11,778,842 remains of the preamble reductions which must be eliminated, therefore I am issuing this Executive Order to eliminate the remaining amount of the preamble reductions.

NOW THEREFORE, I, Bobby Jindal, Governor of the State of Louisiana, by virtue of the authority vested by the Constitution and laws of the State of Louisiana, do hereby order and direct as follows:

SECTION 1:             The following departments, agencies, and/or budget units (hereafter "Unit" and/or "Units") of the executive branch of the State of Louisiana, as described in and/or funded by appropriations through the Act, shall reduce or freeze expenditure of funds appropriated to the Unit from the State General Fund by the Act, in the amounts shown below:
                                                            
                          Act 13 - General Operating Appropriations Act Expenditure Freeze:

Schedule 01-Executive Department State General Fund
01-102 Inspector General $                 35,490 
01-126 Board of Tax Appeals $                      336
Schedule 06-Culture, Recreation and Tourism
06-264 Office of State Parks $            3,067,866 
Schedule 08-Corrections Services
08A-400 Corrections Administration $                 30,981 
08A-401 C. Paul Phelps Correctional Center $            2,803,780 
Schedule 08-Youth Services
08C-403 Office of Juvenile Justice $               962,458 
Schedule 17-State Civil Service
17-563 State Police Commission $                 22,724 
Schedule 19-Education
19D-699 Special School Districts $               559,985 
Schedule 20-Other Requirements
20-452 Local Housing of State Juvenile Offenders $              340,733 
20-931 LED Debt Service and State Commitments $         17,893,132
20-XXX Funds $         11,912,124

SECTION 2:             A.        No later than December 28, 2012, the head of each Unit listed in Section 1 of this Order shall submit to the Commissioner a mid-year budget reduction plan and preamble reduction plan (hereafter “mid-year budget reduction plans”, on the BA-7 form and questionnaire, which reflects the Unit’s proposed allocation of the expenditure freeze ordered in Section 1 of this Order, and a description of the methodology used to formulate the mid-year budget reduction plans.  

B.        In the event that positions of employment will be affected by the mid-year budget reduction plans, these positions should be included in your mid-year budget reduction plans.

C. No Unit shall implement the expenditure freeze mandated by Section 1 of this Order without the Commissioner’s prior written approval of the Unit’s mid-year budget reduction plans.

D. After the Commissioner has given approval of a Unit’s mid-year budget reduction plans, any change to the mid-year budget reduction plans requires prior written approval from the Commissioner.

SECTION 3:              The Commissioner is authorized to develop additional guidelines as necessary to facilitate the administration of this Order, including the allocation for the preamble reductions.  

SECTION 4:             All departments, commissions, boards, offices, entities, agencies, and officers of the State of Louisiana, or any political subdivision thereof, are authorized and directed to cooperate in the  implementation of the provisions of this Order.

SECTION 5:              This Order is effective upon signature and shall remain in effect through June 30, 2013, unless amended, modified, terminated, or rescinded prior to that date.
 
IN WITNESS WHEREOF, I have set my hand officially and caused to be affixed the Great Seal of Louisiana, at the Capitol, in the city of Baton Rouge, on this 14th day of December, 2012.

____________________________
GOVERNOR OF LOUISIANA


ATTEST BY
THE GOVERNOR



________________________
SECRETARY OF STATE


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