Monday, June 17, 2024

Lawmakers at odds over state spending limit ahead of Legislature convening

by BIZ Magazine

The Legislature convenes April 10 for the start of the 2023 session, and lawmakers, blessed with a large budget surplus, are at odds about whether they should raise the state’s spending limit.

Thanks to an influx of federal dollars from hurricane and pandemic relief and an increase in revenue from a temporary 45-cent sales tax hike, the state is expected to have a $1.6 billion surplus, and the fight over the expenditure limit will greatly influence how much of that money is spent.

The state Constitution requires a portion of the surplus to go into a rainy day fund and other savings, leaving the Legislature with about $500 million in additional spending power without exceeding the cap.

In a recent Public Affairs Research Council webinar, Senate President Page Cortez, R-Lafayette, said he favors increasing the spending cap if the money goes toward one-time expenses. That could include transportation infrastructure projects and the revamping of water and sewer systems he said.

Sen. Gerald Boudreaux, D-Lafayette, chairman of the Senate Democratic Caucus, generally agreed with Cortez, noting that some parameters should be in place for lawmakers to raise the expenditure limit.

Cortez called it a “disservice” to let the majority of the surplus go into the rainy day fund and other savings instead of budgeting more money for projects and services, like early childhood education, that will immediately benefit Louisianans.

Still, other lawmakers are hesitant about raising the expenditure limit.

Rep. Jack McFarland, R-Winnfield, chairman of the Louisiana Conservative Caucus, pointed to the anticipated loss of up to $900 million when the temporary sales tax increase ends in 2025.

“We still haven’t officially addressed that shortfall,” McFarland said. “Some of the things that will inform our financial well-being going forward we don’t know yet.”

In proposing his budget for fiscal 2024, Edwards acknowledged the potential ramifications of the sales tax expiration. But he said the state’s economy seems to be on solid ground, and the next governor would have ample time to handle any changes that may come.

— Molly Ryan, LSU Manship School News Service

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