Better Choices for a Better Louisiana Responsible Responses to Louisiana’s Financial Crisis 1
$1.6 billion ÷ $25.5 billion = 6% FY12 Projected Shortfall Total FY11 Budget Percent of total FY11 budget to be cut over 3 years 2
$1.6 billion ÷ $7.7 billion = 21% FY12 Projected Shortfall FY11 State General Fund Percent of FY11 state general fund to be cut in FY12 3
$1.6 billion ÷ $2.6 billion = 62% FY12 Projected Shortfall Percent of FY11 discretionary fund to be cut in FY12 FY11 Discretionary Funds 4
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(in millions)FY08FY09FY10FY11FY12 5-Year Total Excess Itemized Deductions$152$250$255$260$265$1,182 Bracket ChangesN/A $359$251$262$872 Total Cost$152$250$614$511$527$2,054 Source: Department of Revenue for Excess Itemized Deductions, except FY12, which is LBP estimate Legislative Fiscal Office for Bracket Changes 7
$7.1 BILLION 8
State general fund revenues:$7.7 billion Cost of tax exemptions:$7.1 billion Tax code spending equals 92% of SGF revenues 9
Insurance Premium Tax Credit Motion Picture Investor Credit Income shifting by multistate corporations Paying companies to send their sales taxes on time Enterprise zone credit Horizontal drilling exemption 10 $195 million $119 million $32 million $34 million $23 million $15 million
Example: Of 179 sales tax exemptions, 90 are lumped under “Other Exemptions” at a cost of $3.8 billion of $4.7 billion or 80% 11
12 The budget is “devastating” Suspending tax exemptions is “something we should debate” Senate President Joel Chaisson Baton Rouge Business Report September 24, 2010
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