The 1999 Operating Budget

Adopted on December 9, 1998, the parish’s 1999 operating budget projects expenditures of $266.7 million in 1999, 6.2 percent above anticipated 1999 revenue of $250.9 million. In 1998, amended expenditures ($259.3 million) exceeded revenues of $243.5 million by 6.5 percent.

Revenues

Jefferson Parish 1999 operating revenues are projected to increase by 3 percent over 1998 amended revenues of $243.5 million. See Table 3. Tax income in 1999 ($143.7 million) is predicted to increase by one percent over 1998, and will comprise 57.3 percent of the 1999 operating revenues.

These are conservative tax income estimates as actual parish-tax revenues in 1997 were 2.3 percent above estimates, and 1998 actual sales tax income will likely be two to three percent above projections. (Note that operating budget tax income estimates do not include debt service funds as does general government revenue. Debt service funds represent tax income and are derived from sales, property, and other sources.)

The parish’s income from charges for services in 1999 is expected to increase by 8.8 percent over 1998, supported in large part by a 33 percent increase in income from garbage collection fees. Revenues for charges for service in the operating budget (Table 3) far exceed general government revenues from charges for service (Table 1) as Table 3 totals also include income from parish enterprise funds. Enterprise fund revenues are derived from the provision of water and sewer services to parish residents.

Operating budget revenues from intergovernmental sources are expected to decline by about six percent between 1998 and 1999. This decrease does not represent a substantial change, however, as operating budget revenues include only a small percentage of the parish’s total income from state and federal grants. Federal grant revenue totaled $27.5 million in 1997.

The moderate growth in parish income from licenses and permits, interest, and other financing sources is projected to continue through 1999 while revenue from fines and forfeitures and miscellaneous sources is expected to decline slightly.

Expenditures

The Parish anticipates total operating expenditures of $266.7 million in 1999, an increase in spending of 2.8 percent over amended 1998 outlays ($259.3 million), and an 18 percent rise over 1997. Based on prior proposed budgets, 1999 expenditures are overestimated. In 1997, proposed operating expenditures were anticipated to exceed revenues by 6 percent when in fact actual revenues exceeded outlays by 4.7 percent.

General Fund expenditures are expected to increase by 7.2 percent over 1998. This increase accounts for almost all of the proposed spending growth in 1999, leaving a projected year-end General Fund balance of only $178,500, down from $4.5 million in 1998. Again, a combination of conservative revenue projections and overestimated expenditures will likely lead to a significantly larger fund balance than anticipated.

Spending levels in all other functional areas are expected to show little change. Most of the increase in General Fund spending ($2.5 million) is allocated to reducing debt service on the Yenni office building.

Table 4 presents budgeted 1998 and 1999 expenditures by category. Personal services ($113.6 million), composed of salaries and fringe benefits, makes up a growing percentage of the parish’s operating budget, increasing from 41.8 percent of the 1998 budget to 42.6 percent of projected 1999 expenditures ($266.7 million).

Spending on personal services grew 23.4 percent from 1995 to 1999, as total expenditures rose by 20.8 percent. These increases are the result of the parish personnel policy. All parish employees, unless they are at the top of their pay range or exhibit poor job performance, receive a five-percent annual pay increase.

Personal services expenditures in 1999 will exceed the projected 4.8 percent increase over 1998 outlays as the parish’s new pay plan, adopted in 1998, goes into effect. The cost of the new pay plan, about $ 7 million, is not yet incorporated in the 1999 adopted budget.

Purchased services operating expenditures are budgeted at $94.8 million for 1999,a 3.2 percent increase over 1998 amended outlays, and 19.4 percent over actual 1997 expenditures.

The professional and technical sub-category ($56 million) comprises 60 percent of purchased services and grew by 2.7 percent between 1998 and 1999 and by 12.9 percent ($9.6 million) since 1997. About 42 percent of the 1997 to 1999 increase is due to a 57 percent rise in expenditures for professional services contracts and a 31 percent increase in the parish’s garbage service contract.

Professional and technical costs comprise 21 percent of total projected 1999 operating expenditures. Parish expenditures in the property sub-category increased by 40 percent over 1997 actual costs and by 4 percent over 1998 levels. Other purchased services showed a slight drop in 1999.

Operating expenditures incurred from general expenses and debt service remain essentially unchanged. Outlays for capital costs more than doubled between 1997 and 1999 due in part to building costs, general improvements, and heavy equipment and vehicle purchases. The parish’s cost for supplies increased by 38 percent over 1997 due in part to the purchase of computer software and road maintenance-related supplies.