Glossary & Resources of State Budget and Finances

Certain terms show up on a recurring basis in discussions about the state budget. Here’s a simple, plain English explanation.

Appropriation: Legislature approval for an agency to spend money (expenditure).

Budget: A plan for receiving and spending funds

Capital Outlay versus Operating Budget: A capital outlay budget handles large infrastructure projects like roads and buildings. Normally this called House Bill 2. An operating budget handles the normal annual functions of government. Louisiana’s operating budget is actually several legislative bills:

  • General Operating Budget - Provides for the ordinary functions of the executive branch, such as support for schools and colleges, healthcare, prisons, etc. This budget is usually contained in House Bill 1, or HB 1, of each annual regular legislative session.
  • Legislative Budget - Provides for the ordinary functions of the legislative branch, including the House, Senate, Legislative Fiscal Office and the Legislative Auditor
  • Judicial Budget - Provides for the ordinary functions of the judicial branch, or court system, including public defenders
  • Ancillary Budget - Provides for several agencies that are self-funded and exist to provide services to other government agencies, such as the Office of Group Benefits, Risk Management, and Technology Services
  • Supplemental Budget - Makes changes in the budget for the existing year. When the Legislature meets in the Spring, it often adjusts the budget for the current year that will end on June 30.

Fiscal Year: Instead of a calendar year that starts with January 1, the state budget runs on a fiscal year that starts July 1 and ends June 30 of the next year. For example fiscal year 2018-19, or FY19, starts July 1, 2018, and ends June 30, 2019.

Means of Finance: The source of funding for an expenditure. There are 5 basic groups of funding in Louisiana budgeting:

  • State General Fund (SGF) - Tax dollars that are basically unrestricted in how they can be spent.
  • Fees and Self-Generated Revenue - Money raised by an agency, such as college tuition, dorm room rents, fishing and hunting licenses, etc.
  • Interagency Transfers (IAT) - Transfers between agencies. For example, agencies transfer money to the Office of Group Benefits to pay for part of their employees’ health insurance benefits.
  • Statutory Dedications – Funds that are restricted by statutory law in how they can be used.
  • Federal Funds – Money from the federal government with related restrictions on how that money can be spent. Medicaid and disaster recovery programs would be examples. Roughly 45% of the state’s overall budget is federal funds.

Existing Operating Budget (EOB): Since budgets can be adjusted throughout the year, it is often useful to take a snapshot in time. The EOB is either the most recent version of budget or the budget as of a certain date for comparative purposes.

Continuation Budget: This concept is a theoretical budget that refers to the funding level necessary to carry on all existing programs at their current level of service next fiscal year, including any adjustments necessary to account for inflation and increases in workload requirements resulting from demographic changes or higher demands for services.

Standstill Budget: A budget that holds expenditures flat from the previous year. Similar to a continuation budget in that is a concept. A related idea is a “nondiscretionary standstill budget”, which would allow mandated expenses to increase, while other expenditures are kept flat.

Fiscal Note: An official estimate of a proposed bill’s associated expenditure or revenue change. Fiscal notes are prepared by the Legislative Fiscal Office (see below). For example, a proposal to double the Earned Income Tax Credit would have decreased State General Fund revenue by $47 million over 5 years.

Revenue Estimating Conference (REC): The REC is a four-member panel that reviews economists’ estimates of the state’s future revenues and then sets the official revenue forecast for the state. The official revenue forecast determines the upper limit of the state budget. It is comprised of the governor, usually represented by the commissioner of administration, and the President of the Senate and the Speaker of the House, or their designees. The fourth person is a faculty member of a college in Louisiana with expertise in forecasting revenues. The REC’s decisions must be unanimous to be adopted. Otherwise, the state budget operates under the most recently approved forecast estimate.

Resources for budget information

Several agencies provide fiscal information to the public. Below are some of the most frequently used.

The Division of Administration (DOA) is the governor’s agency responsible for most of the administrative functions (accounting, payroll, information technology, etc.) for the executive branch. Within the division, the Office of Planning and Budget (OPB) prepares the governor’s executive budget. OPB publishes online the executive budget and the supporting documents that contain additional detail. Keep in mind that the executive budget is the proposed spending plan, not the final outcome. The DOA also maintains LaTrac, the state’s online transparency portal. Among a wealth of fiscal information, LaTrac lists the state’s consulting contracts.

Legislative Resources

Citizens can search proposed bills and resolutions on the state legislature’s website.

The House Fiscal Division and Senate Fiscal Services have a number of archived reports and presentations. The Legislative Fiscal Office (LFO) is analogous to the Congressional Budget Office in the nation’s capital, but at the state level. The LFO prepares fiscal notes for bills well as a number of other reports. The LFO produces Focus on the Fisc, a frequent publication that features particular fiscal issues or problems. The LFO has information on state revenue, including the most recent REC forecast.

The Louisiana Legislative Auditor is responsible for conducting or reviewing audits of state and local government agencies. Most of its work concerns accounting integrity, but the Auditor also evaluates performance, practices and compliance with state laws.

The Public Affairs Research Council (PAR) is a private, nonprofit, non-partisan public policy research organization focused on pointing the way toward a more efficient, effective, transparent and accountable Louisiana government. Founded in 1950, PAR is a 501(c)(3) tax-exempt organization supported by foundation and corporate grants and individual donations.