With $2.26 billion in surplus dollars from last year’s budget and foreseen for this year’s and the next, Louisiana has a chance to jumpstart its economy, following through from the double-edged sword impact of out-of-control Washington spending.
Last month, the state figured it closed out fiscal year 2022 with $727 million more collected than anticipated. A quarter of this is spoken for by the Budget Stabilization Fund and another tenth must go to paying down a portion of the state’s unfunded accrued liabilities, and the rest can go to specified nonrecurring functions including those. A good strategy here would put the nearly $473 million (perhaps a bit less, depending upon another statutory interpretation) towards paying down more of the latter, which would reduce costs to local education agencies that they could use, for example, for pay raises.
As for the $925 million appertaining to this year, $45 million went in the just-finished special session to entice insurers, and the state still owes the federal government $300 million for past flood protection efforts, although it hopes to have this waived. Assuming it doesn’t, for the remainder one advisable strategy would be to bank it for the upcoming FY 2026 sales tax hike roll-off that, according to the state’s forecast, will result in $550 million lower sales tax revenue compared to FY 2025.