So Much Money!
Over the last few years, there has been a much larger influx of taxpayer revenues than usual. Since fiscal year 21, lawmakers have had access to $5.5 billion in excess and surplus funds (money over and above the amount needed to run government operations). $1 billion was in FY 21, $2.4 billion in FY 22, and there is $2.2 billion available for lawmakers to spend at the end of the current year, FY 23.
Lawmakers have wisely saved much of these excess revenues for future use. In just the last two years alone, $3.1 billion has been set aside for infrastructure needs, $153 million for education, $176 million for emergency planning, and $151 million for other items. Nearly $1.3 billion more has been added to the state’s savings accounts, the Rainy Day Fund and the Revenue Stabilization Fund, to offset future budget deficits. This brings just the state’s savings account balances to a healthy $2.7 billion.
In addition to the $3.1 billion that was set aside for infrastructure, the Department of Transportation and Development also receives approximately $600 million annually from the gas tax that can be used as a match to pull down hundreds of millions of dollars from the federal government each year.
In FY 22, lawmakers dedicated $625 million in federal funds from COVID relief packages and the Infrastructure Investment and Jobs Act primarily for local infrastructure needs through FY 26.
Also in FY 22, lawmakers dedicated $1.01 billion in excess state general funds for future use, including:
At the beginning of Fiscal Year 2023, lawmakers transferred more than $170 million in the state’s general fund to various other dedicated funds for future use:
The House of Representatives is proposing to use $664 million of state general fund excess money in various ways for future use:
In addition to all of these funds, there will be additional deposits this year into the savings funds that can only be used when the state is facing a deficit or reduced revenue. $181 million will be added to the Budget Stabilization Fund, colloquially called the Rainy Day Fund, which will have a balance of $903 million.
Also, $802 million will be deposited into the Revenue Stabilization Fund as a result of the record corporate income and franchise taxes collected this year. The balance of that fund once this deposit is made will be $1.8 billion. The state’s economic forecasters are predicting that another $285 million will be deposited next year.
These forecasters that predicted doom and gloom for future years back in December have revised their outlook for the future, and while these record-setting revenues will decrease somewhat in the coming years, the decreases are less than previously thought.
With all the savings on hand, there is no reason for lawmakers to avoid giving taxpayers some relief in their income tax by ensuring that the triggers they put into place (and promised to voters) go into effect. They should also continue to repay debt to free up dollars in the future when revenues are lower.
All of this can be done without raising the spending cap. It is time for the state to use its plentiful revenue wisely and set Louisiana on a path to economic growth and competitiveness.