Thursday, May 23, 2024

State to see additional revenue surplus in 2024

by BIZ Magazine

By Allison Allsop, LSU Manship School News Service

BATON ROUGE—A $483 million increase in revenue for the state’s general spending fund is now being estimated for 2024, adding to a giant pile of money that the state Legislature has at its disposal.

Under the new projections, the state’s general fund also will take in $323.4 million more than previously expected in the current fiscal year, bringing the total surplus from the last two years to over $2.1 billion.

The new projection was made Thursday by the state’s Revenue Estimating Conference. It updated revenue forecasts for both the current fiscal year, which ends June 30, and for next year.

The increased projections come as the House and the Senate are split over what to do with all the extra money.

Under a formula that places a cap on spending, the Legislature could only spend $500 million of the surplus funds in fiscal year 2024 on recurring budget items, and the additional revenue forecasted Thursday will not increase the cap.

The biggest fight in the session is whether to try to muster a vote of two-thirds of both chambers to exceed the spending limit.

In its budget, passed earlier this month, the House voted to stay within the cap for ongoing programs and use part of the surplus funds to pay down state debt, including for teacher pensions.

The House budget did not include a $3,000-a-year raise for K-12 teachers and various infrastructure projects that had been proposed by Gov. John Bel Edwards.

House Republican leaders said that paying off pension debts would free up money that parishes could use to fund their own teacher pay raises. They also cautioned against spending too much of the surplus since the state will lose hundreds of millions of dollars in revenue when a temporary 0.45% of state sales tax expires in two years.

However, the Senate president, Patrick Cortez, has voiced support for expanding the spending cap to cover the rising costs of roads, bridges and other construction projects and to provide more funds for early childhood education.

The Senate Finance Committee began debate Thursday on its version of the budget.

The Revenue Estimating Conference meets throughout the year to provide updates to revenue estimates. It last met in December.

The group— made up of the Senate president, the House speaker, and two appointed members, including Edwards’ Commissioner of Administration, Jay Dardenne—unanimously approved the update for the 2023 fiscal year written by Manfred Dix, the chief economist for the state.

The estimate also included hundreds of millions of dollars in additional money for other state accounts besides the general fund.

At Thursday’s meeting, the conference also unanimously accepted the Legislative Fiscal Office’s predictions of an increase $483 million for the general fund in fiscal 2024.

Debbie Vivien, the chief economist for the Legislative Fiscal Office, emphasized that these are just conservative estimates, as anything can happen in the upcoming year.

“There’s still a lot of unknowns,” Vivien said. “It’s a pretty picture, but it’s the picture that’s in the middle. And it can change a lot either way.”

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