fy 14-15 executive budget review department of economic … · 2014. 3. 13. · 05-06 fy 06-07 fy...

Representative Jim Fannin Chairman

Representative Simone Champagne Vice Chairman

FY 14-15 Executive Budget Review DEPARTMENT OF ECONOMIC DEVELOPMENT

House Committee on Appropriations by the House Fiscal Division

MARCH 18, 2014

House Fiscal Division

Budget Overview – Department Functions 3

– Department Structure 4

– Means of Finance Comparison 5

– 10-Year Budget History 6

– Major Sources of Revenues 7

– Expenditure Breakdown 8

– Expenditure History 9

– Significant Adjustments 11

– Discretionary/Non-Discretionary Funding 12

– Salaries and Positions 14

– LED Debt Service 18

– Department Contacts 19

Economic Development 2

Agenda

Ronnie Downey 225-342-0474


• Business Incentives – Provides quality assistance through marketing and administering tax, financial,

and other assistance products to create value for existing, expanding, and new businesses in Louisiana.

• FastStart Program – A comprehensive workforce training service to provide businesses that are

looking to relocate and/or expand with a turnkey employee training and delivery solution.

• Small Business and Entrepreneurial Services – Provides assistance to small businesses in Louisiana through the Small and

Emerging Business Development Program and the Small Business Loan and Guaranty Program.

Ronnie Downey 225-342-0474 Economic Development 3

Department Functions

House Fiscal Division Economic Development 4

Department Structure

• Administration

Office of the Secretary

•Business Development Program

•Business Incentives Program

Office of Business Development



Means of Finance

Means of Finance Actual

Expenditures

FY 12-13

Existing

Operating

Budget

FY 13-14

(12/1/13)

Executive

Budget

Recommended

FY 14-15

Change from

FY 13-14 to

FY14-15

Percent

Change

from

FY 13-14 to

FY 14-15

State General Fund $13,312,547 $15,249,014 $15,603,576 $354,562 2.3%

Interagency Transfers $841,438 $1,150,793 $0 ($1,150,793) (100.0%)

Fees and Self-Gen Rev $2,198,115 $3,710,281 $3,509,272 ($201,009) (5.4%)

Statutory Dedications $19,386,854 $26,494,412 $29,666,033 $3,171,621 12.0%

Federal Funds $1,990,634 $12,074,982 $200,000 ($11,874,982) (98.3%)

TOTAL $37,729,588 $58,679,482 $48,978,881 ($9,700,601) (16.5%)

Authorized Positions 122 119 114 (5) (4.2%)


Interagency Transfers

• Eliminates budget authority for Workforce Rapid Response awards and CDBG for Business Recovery

$1.1M

Statutory Dedications • Transfer funding from LED Debt Service for the Rapid Response Fund to provide for industrial or business development projects

$3.1M

Federal

• Eliminates budget authority for Federal Funds in the current year from the State Small Business Credit Initiative

$11.8M

Authorized Positions • Three vacancies eliminated

• Two positions transferred to the Office of Technology Services

5 T.O.

Significant Adjustments:


10-Year Budget History


*Existing Operating Budget as of 12/1/13 **Governor’s Executive Budget Recommendation Source: Executive Budget Supporting Documents

$52

$123

$106

$205

$86

$64 $50

$38

$59 $49

$0

$40

$80

$120

$160

$200

$240

FY 05-06

FY 06-07

FY 07-08

FY 08-09

FY 09-10

FY 10-11

FY 11-12

FY 12-13

FY 13-14 E.O.B. *

FY 14-15 Exec. Bud.

**

Mill

ion

s

Fiscal Year

DEPARTMENT OF ECONOMIC DEVELOPMENT (Total Funding)


Fees and Self-Generated Revenue- $3.5 million

• Application fees for business incentives

Statutory Dedications - $29.6 million

• Louisiana Economic Development Fund

• Rapid Response Fund

• Marketing Fund

• Entertainment Promotion and Marketing Fund

Economic Development 7

Major Sources of Revenues FY 14-15



Expenditure Breakdown

ExpendituresFY 12-13 Actual

Expenditures

FY 13-14 Existing

Operating Budget

(12/1/13)

FY 14-15

Executive Budget

Recommendation

Change from

FY 13-14 to

FY 14-15

Percent

Change from

FY 13-14 to

FY 14-15

Salaries $8,787,797 $8,559,030 $8,710,773 $151,743 1.8%

Other Compensation $100,606 $141,014 $141,014 $0 0.0%

Related Benefits $3,473,734 $3,495,186 $4,179,295 $684,109 19.6%

Travel $610,139 $1,063,612 $1,042,612 ($21,000) (2.0%)

Operating Services $1,612,374 $1,765,361 $1,324,091 ($441,270) (25.0%)

Supplies $207,095 $342,244 $265,756 ($76,488) (22.3%)

Professional Services $6,168,191 $7,633,262 $6,523,468 ($1,109,794) (14.5%)

Other Charges $16,613,370 $35,679,773 $26,791,872 ($8,887,901) (24.9%)

Acq/Major Repairs $156,282 $0 $0 $0 0.0%

Unallotted $0 $0 $0 $0 0.0%

TOTAL EXP $37,729,588 $58,679,482 $48,978,881 ($9,700,601) (16.5%)

Salaries and Related Benefits • The increase in salaries is caused by the performance adjustment for classified employees. The increase in Related Benefits is caused by retirement rate adjustments from 31% to 37%. Professional Services • Reduction in support services and advertising, promotion, and marketing services for the Department’s programs. Other Charges • Elimination of funding associated with the Small Business Credit Initiative. The final award for this program was received in FY 14.



7-Year Expenditure History (in millions)


$10.6

$11.5 $11.7

$12.3 $12.4 $12.2

$13.0

$10

$11

$12

$13

$14

08-09 09-10 10-11 11-12 12-13 13-14* 14-15**

Personal Services

$2.0 $2.0 $2.1 $2.0

$2.4

$3.2

$2.6

$0

$1

$2

$3

$4

08-09 09-10 10-11 11-12 12-13 13-14* 14-15**

Operating Expenses

$6.3 $5.9 $6.6

$6.1 $6.2

$7.6 $6.5

$0

$2

$4

$6

$8

$10

08-09 09-10 10-11 11-12 12-13 13-14* 14-15**

Professional Services

$0.60

$0.30 $0.40

$0.10 $0.16

$0.00 $0.00 $0.0

$0.3

$0.5

$0.8

$1.0

08-09 09-10 10-11 11-12 12-13 13-14* 14-15**

Acquisitions & Major Repairs


7-Year Expenditure History (in millions)


*Existing Operating Budget as of 12/1/13 **Governor’s Executive Budget Recommendation Source: Executive Budget Supporting Documents

$185.5

$66.6

$43.7

$29.8

$16.6

$35.7 $26.8

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

08-09 09-10 10-11 11-12 12-13 13-14* 14-15**

Other Charges

CDBG Hurricane Recovery Program


Significant Adjustments


Provides funding for operating expenses of the New Orleans Wet Lab, a technology business incubator that aims to stimulate bioscience entrepreneurship in the New Orleans area. This is a transfer from agency 20-931, LED Debt Service/State Commitments.

$719,140 SGF

Provides funding for the Economic Development Rapid Response Program to provide for industrial or business development projects that promote cluster economic development and that require state assistance to create or retain jobs.

$10 M Stat Ded.

Elimination of Federal Funds from the State Small Business Credit Initiative. The final federal award for this program was received in FY 13-14.

$10.8 M Federal

$661,130 SGF

IT consolidation with the Office of Technology Services (decrease of two authorized positions).


Discretionary/Nondiscretionary Funding in FY 14-15

Executive Budget


Activity/Program Discretionary Non-Discretionary

Discretionary

Non-Discretionary

Office of the Secretary $ 15,323,941 $ 319,500 $ 5,019,723 $ 176,037

FastStart $ 6,935,000 $ 0 $ 0 $ 0

Office of Business Development $ 33,335,440 $ 0 $ 10,407,816 $ 0

Economic Development Rapid Response Program

$10,000,000 $0 $ 0 $ 0

$0 $ 0 $ 0 $ 0

TOTAL $48,659,381 $ 319,500 $15,427,539* $ 176,037

* The discretionary State General Fund in the agency’s budget is 0.2% of the total discretionary State General Fund recommended for FY 14-15.

TOTAL FUNDING -$48,978,881 STATE GENERAL FUND -$15,603,576


Discretionary/Nondiscretionary Funding in FY 14-15

Executive Budget


?

State General Fund

$15.6 Million

Discretionary

$15.4 Million

Business Development Program

$10.4 Million

Administration Program

$5.0 Million

Non-Discretionary

$176,037

Office of the Secretary

$176,037

Federal

$200,000

Statutory Dedications

$29.7Million

Self-Generated Revenue

$3.5 Million

Total DED Budget

$49 Million

Subtract IAT $0

(Interagency Transfer Double

Count)

$49 Million

Available


Salaries and Positions


FY 14-15 SALARIES/POSITIONS

$8.8 million for Salaries and Other Compensation

$4.2 million for Related Benefits

Total Personnel Services = $13 million; 58% of the Economic Development total Executive Budget Recommendation (excluding Other Charges)

114 Authorized Positions (64 classified and 50 unclassified)

0 full-time non-T.O. positions

0 Other Charges positions

As of 12/27/2013, Economic Development had 8 vacancies; Executive Budget eliminates 3 of these vacant positions.




Source: Prepared by House Fiscal Division staff using information from ISIS-HR

83 80

91

116

127

118 120

113 116

60

80

100

120

140

2005 2006 2007 2008 2009 2010 2011 2012 2013

TOTAL FULL-TIME EQUIVALENT (FTE) POSITIONS




Source: Prepared by House Fiscal Division staff using information from ISIS-HR and Civil Service

$44,063

$56,900

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

FY 13 CLASSIFIED AVERAGE ANNUAL PAY PER FTE




Source: Prepared by House Fiscal Division staff using information from ISIS-HR and Civil Service

$62,491

$102,910

$0

$50,000

$100,000

$150,000

$200,000

FY 13 UNCLASSIFIED AVERAGE ANNUAL PAY PER FTE


LED Debt Service

Means of Finance Actual

Expenditures

FY 12-13

Existing

Operating

Budget

FY 13-14

(12/1/13)

Executive

Budget

Recommended

FY 14-15

Change from

FY 13-14 to

FY 14-15

Percent

Change

from

FY 13-14 to

FY 14-15

State General Fund $1,534,311 $21,790,090 $28,454,154 $6,664,064 30.6%

Interagency Transfers $0 $0 $0 $0 0.0%

Fees and Self-Gen Rev $0 $1,500,000 $2,800,000 $1,300,000 86.7%

Statutory Dedications $18,058,262 $74,664,311 $0 ($74,664,311) (100.0%)

Federal Funds $0 $0 $0 $0 0.0%

TOTAL $19,592,573 $97,954,401 $31,254,154 ($66,700,247) (68.1%)

Authorized Positions 0 0 0 0 0.0%


State General Fund • Increase to reflect anticipated level of commitments

• $510,000 for the Bell Helicopter Assembly Facility

$6.6M

Self-Generated Rev • Non-state entities for local support of the commitments.

$1.3M

Statutory Dedications

• Completion of commitments to IBM and Benteler Steel. Transfer of funding from the Rapid Response Fund to the Office of Business Development

$74.6M

Significant Adjustments:


Department Contacts


Contact Name Title Phone

Stephen Moret Secretary 342-5388

Steve Grissom Deputy Secretary 342-5478

Kathy Blankenship Deputy Undersecretary 342-9658

Anne Villa Undersecretary 342-5395