Louisiana’s Budget: Big Spenders vs. Smart Savers
The Louisiana legislature is debating our state’s budget — how much to spend, how much to save, and whether to return money to hardworking taxpayers.
On one side of the debate are the Big Spenders, who want to blow through $2.7 billion in even more spending. On the other side are the Smart Savers, who want to return money to the taxpayers, pay down debt, and save for the future. Here’s everything you need to know.
- What’s being debated – how to spend $2.7 billion: The Louisiana legislature is deciding what to do with nearly $2.7 billion more in revenue than was initially projected that taxpayers sent to Baton Rouge for fiscal years of 2022 and 2023.
- The Big Spenders: Some lawmakers (the Big Spenders) want to spend all of the money, exceed the state’s constitutional spending limit, and pay for their pet projects.
- The Smart Savers: Other lawmakers (and the Pelican Institute) want to save some of that money, use it to pay off debt, and provide tax relief to every taxpayer. These Smart Savers know that it’s better for taxpayers and our state’s future to save for the future — not to spend billions more today.
The Case for Smart Saving
- Saving Money = Tax Cuts. If we add just $60 million to the Rainy Day Fund through Smart Saving, we will automatically trigger tax reductions, which will lower personal income rates in every bracket and nearly eliminate the corporate franchise tax.
- “Save it for a rainy day.” Our parents and grandparents taught us to save for the future, not to blow all the money in our pocket. That’s wise advice for state government, too. Smart Saving means more stability for our state, more money for the future, and an easier path toward eliminating the state income tax in the future.
- Big Spending will come back to bite you. If the government spends everything it has now (a.k.a. “busting the cap”), we’re setting a terrible precedent for the future. It sets us on the course to spend more money in the future, and it makes it harder to phase out the income tax.
We can save AND have nice things.
The Big Spenders claim that if we save, we won’t be able to invest in our state. Not true. Take a look at how much money our state is taking in and how we’re already investing in infrastructure and education.
- Louisiana is taking in a LOT of tax dollars. Over the last three years (FY21-FY23) the state has collected a total of $5.5 billion in taxpayer money in “surplus” and “excess” dollars. It’s time to give some of that back.
- Where that money is going. Here’s how some of that money has been spent in the last two years:
- $1.3 billion has been spent or dedicated to infrastructure needs
- $153 million for education
- $176 million to emergency planning, and
- $150 million for other projects.
- But that’s not all…
- $625 million in federal taxpayer dollars were spent or set aside for local infrastructure projects in FY2022 (which will take until 2026 to complete).
- $1 billion was set aside in FY2022 for future use, including $500 million for the “Megaprojects” fund, $130 million for capital outlay savings, and another $100 million for the Transportation Trust Fund Preservation Account.
- All of this is in addition to the roughly $600 million in the budget each and every year for the Department of Transportation that comes from the state’s gas tax that draws down additional hundreds of millions in federal matching dollars.
- Already in 2023, in addition to all the above, lawmakers put $170 million in state general fund money for transportation and other projects.
The Pelican Institute believes in Smart Saving. It’s what’s best for the future of Louisiana. It sets our state on a solid fiscal path. It saves for our future. It puts more money in your pocket.
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