Sunday, May 26, 2024

Louisiana’s annual financial report shows collections and expenses grew in 2022

by BIZ Magazine

By Victor Skinner | The Center Square contributor

Louisiana took in more money than it spent in 2022, due to higher tax collections and an influx of federal funds, though expenses increased as well, according to the state’s comprehensive annual financial report.

The report published by the Louisiana Legislative Auditor last week shows total primary government revenues of $43.8 billion in fiscal year 2022, compared to total primary government expenses of $40.1 billion, leaving the state with a net ending position of $9.3 billion.

“Louisiana’s overall net position increased by $3.7 billion. Approximately $3.0 billion of this increase is from the State’s governmental activities and $619 million from business-type activities,” according to the report. “For governmental activities, the State’s primary revenue sources are tax revenues included in general revenues … and federal revenues included in operating grants and contributions.

“Both of these revenue sources increased in fiscal year 2022, with a $2.1 billion increase in tax revenues and a $3.2 billion increase in operating grants and contributions,” the report read.

Expenses increased by $2.9 billion in FY 2022 mostly due to increased federal revenues that are generally received or earned on a reimbursement basis, though a $391 million decrease in net pension liabilities contributed to the increase in net position.

Louisiana’s general fund increased by $898 million in FY 2022, due mainly to tax collections and federal funding outpacing a $3.7 billion increase in expenditures.

Sales taxes increased by $715 million, individual income taxes increased $556 million, corporate income and franchise taxes increased $503 million, and severance taxes increased $243 million.

“These tax collections grew mainly as a result of a quick recovery from the pandemic, enhanced by federal stimulus packages,” the report read. “The outcome reflected historic increases in the general sales tax, individual income tax, and corporate tax collections.”

The increase in severance tax and royalty collections was tied to a rise in oil prices, while a gaming revenue increase of $73 million “also reflects the increase in economic activity and disposable income,” according to the report.

Louisiana reported $2.5 billion in intergovernmental revenues, mostly related to Medicaid, disaster relief, and education programs funded by the federal government. Federal revenues included an increase of $590 million for the Louisiana Department of Health to keep folks on Medicaid during the pandemic, $526 million for pandemic and hurricane recovery, and $1 billion to help schools recover from learning loss during the pandemic.

Long term, Louisiana reported an unrestricted net position of negative $12.2 billion, which includes $5.3 billion in net pension liability, a $6.3 billion liability for post-employment health care benefits, $3.3 billion in long-term debt for capital grants, and a $2.1 billion in “unfunded reserves for incurred claims payable to outside parties for worker’s compensation, disallowed costs, and various lawsuits.”

The Louisiana Legislative Auditor also pointed to ongoing issues with unemployment insurance totaling nearly $1 billion that remain unresolved.

“As of November 2022, the Louisiana Workforce Commission identified approximately 23,000 claims totaling $187 million paid from July 1, 2021, through June 30, 2022, with various issues indicating potential overpayments to claimants,” LLA Mike Waguespack wrote. “In addition, there are 100,600 claims totaling $819 million identified in the prior years (March 15, 2020, through June 30, 2021) with unresolved issues indicating potential overpayments to claimants.”

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