BATON ROUGE – Commissioner of Administration Angele Davis released the following statement today regarding the Fiscal Year 10 budget development process:

"All state expenditures are still under review and determinations on budget items will not be final until we present the budget to the legislature on March 13th.

"Currently, the state is working to address a projected $2 billion shortfall for next fiscal year, and the Office of Planning and Budget is providing agencies with a range of preliminary reduction goals, based on the agencies’ amount of discretionary funding compared to total discretionary funding. Agencies will then need to present their strategic priority plans to produce needed cost-savings while continuing to provide critical services to citizens.

"These reduction goals are subject to change, and most likely will change, as we saw during the 2009 mid-year cost-savings process. However, it is necessary for agencies to prepare for what could be their worst-cases scenarios.

"Between the Activity Performance Review we are undertaking, along with the Strategic Priority Plans we are requesting from agencies, we are working to review spending and identify savings in a more thoughtful and comprehensive way.  The Activity Performance Review and the Strategic Priority Plans will also help us identify department priorities and be able to lessen reductions to higher performing programs by focusing on those with lower outcomes.

"As has been widely noted, Higher Education and Health Care represent a large portion of ‘unprotected’ discretionary general fund spending, and that situation is reflected in these preliminary reduction goals which are based on a percentage of total discretionary funds. Just as we did with the mid-year budget cuts for FY 09, we will seek greater budget flexibility by reviewing all means of state government financing, including the use of statutory dedications.

"Moreover, it is important to note that specific reduction targets in higher education institutions are set by the Board of Regents, and not directly through the Office of Planning and Budget at DOA."