Wednesday, July 24, 2024

Gov. Jeff Landry, Louisiana lawmakers have millions more to spend — for now

by BIZ Magazine
LOuisiana-money

JULIE O’DONOGHUELouisiana Illuminator

Gov. Jeff Landry and Louisiana lawmakers expect to have an additional $416.5 million to distribute this year, though most of the money will be subject to spending restrictions.

State officials on Wednesday estimated the state’s surplus from the previous budget cycle is $325 million. They also expect to collect $91.5 million more in the current fiscal year than expected.

Louisiana law requires at least half of the surplus go toward paying down state debt and into a savings account that can only be used during economic downturns and natural disasters.

The rest of the surplus money can also only go toward one-time expenses such as building projects, coastal restoration, roads and bridges.

Landry and lawmakers will have more flexibility in how they use the $91.5 million.

The Louisiana House voted Wednesday to take $13 million of that extra money to adopt a new partisan primary election process, hold a special election for proposed state Supreme Court changes and educate voters on new state Supreme Court and congressional maps.

But Louisiana’s sunny financial picture is expected to sour in the next budget cycle, which starts in just six months.

During the 2024-2025 fiscal year, the state is expected to be short $64.8 million. Then in the three subsequent budget cycles, Louisiana has projected deficits of $558.8 million, $614.1 million and $733.4 million respectively.

Those large revenue shortfalls are mostly the result of tax cuts scheduled to happen automatically in 2025. The state sales tax will decrease 0.45%, and a number of sales tax exemptions for a variety of products and services will become active again.

At that point, Landry and lawmakers will have to decide whether to forego the planned tax cuts or make reductions to state government spending.

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