BATON ROUGE, La. – Following a recent meeting of the Joint Budget Committee, Senate President Cameron Henry and Speaker of the House Phillip DeVillier announced plans to work together to address Louisiana’s projected budget shortfall for the fiscal year 2025-2026. The leaders emphasized that the current $340 million gap is an initial estimate and could shrink as the budgeting process continues.
The $340 million shortfall, though significant, is a marked improvement from earlier projections this year. The gap is attributed to several factors, including the sunset of a 0.45% temporary sales tax, the redirection of vehicle sales tax revenue into a transportation savings account, and a 2% tax exemption on business utilities.
“The House and Senate will be working collaboratively and looking at all the factors that impact the state’s budget,” said Speaker DeVillier. “We’ve been anticipating the gap from the sunset of the .45% temporary sales tax as well as the movement of the vehicle sales tax dollars into a savings account for transportation and a 2% tax exemption on business utilities. But we have options that can be considered that will balance the budget, including finding efficiencies in government and creating a more predictable tax structure for the state.”
Senate President Henry echoed DeVillier’s sentiments, noting the importance of understanding the long-term impacts of budget decisions. “It’s important to know the cause and effect of our budget decisions,” said Henry. “The budget is looking better, and we have time for both chambers to look for solutions to close any gap for next year. We’ll obviously focus on our priorities as we craft the budget and continue to watch the forecast models to inform that work. This is just the beginning.”
The Division of Administration also testified that the projected shortfall does not account for $248 million allocated last year for educational initiatives. These funds, which include teacher and support personnel pay stipends, differentiated compensation, tutoring services, apprenticeships, and internships, will be considered in future budget discussions.
As the legislative leadership continues to collaborate on budget solutions, they remain optimistic about the ability to close the gap and ensure a balanced budget for Louisiana.
For more updates on the state’s budget process, visit the Louisiana Legislature’s website.