Pelican Releases Two Updated Reports on Louisiana’s Budget
The Pelican Institute has updated two popular reports released in 2023: the Citizen’s Guide to the FY 24 Louisiana Budget and recommendations to achieve a Louisiana Responsible Budget in 2024-2025. The two documents provide valuable information on state fiscal issues for citizens and policymakers alike.
Louisiana’s economy is struggling with sluggish growth and a history of net out-migration, which ranked as the nation’s third worst in 2022. One of Governor Landry’s first major tasks is to develop and present a recommended state budget to the legislature. Lawmakers will then hold public hearings on the matter and consider a number of amendments throughout the 2024 Regular Session before giving final approval.
Pelican believes that the upcoming session should be used to prepare the state for comprehensive, pro-growth tax reform that will strengthen the state’s economy. Polling shows that Louisiana families and businesses want tax relief and an assurance that the state will use tax dollars responsibly. Following decades of short-term thinking, lawmakers have an opportunity and responsibility to bring much-needed fiscal stability and set the stage for comprehensive, bold tax reform.
The Citizen’s Guide to the FY 24 Louisiana Budget offers an overview and history of Louisiana’s operating and capital budgets, addresses the increase of the expenditure limit for fiscal years 2023 and 2024 and outlines how the state can begin to create a more responsible budget that is adaptable to the changing needs of Louisiana while enhancing the success of future tax reform.
In addition to explaining the dollars and cents of the budget—and highlighting challenges that legislators face—the Citizen’s Guide makes recommendations for sound budgetary practices for the future, including limiting the growth of spending, freeing up budgetary silos, and responding to the pressure of raising taxes.
Finally, the Citizen’s Guide shows how Louisiana’s budget has grown unsustainably over the last decade, from the expansion of Medicaid in 2016 (and the associated sales tax increase) to the influx of federal dollars due to the pandemic and multiple natural disasters. While there have been massive influxes of federal dollars, the state’s coffers have grown significantly as well, increasing the amount of money available to spend in the state general fund. The state’s budget has increased 88% over the last decade, from $27 billion in FY 15 to $51 billion for the current year, growing at a rate faster than inflation.
The report to achieve Louisiana’s 2024-2025 Responsible Budget presents solutions to rein in the extraordinary growth of the budget in order to give the state a competitive advantage, much like those used in other states, such as Texas and Florida, limiting the amount of funding appropriated at the beginning of each fiscal year.
Over the past decade, state spending has increased an average of 5.9% per year. Using the recommended Responsible Budget growth limit outlined in this report, state spending would have increased by only 2.1% per year, which would allow the excess state revenue to be saved for tax relief for Louisiana families.
Louisiana should join twelve other states in enacting a responsible budget to rein in state spending and provide much needed relief to taxpayers.
Read the Citizen’s Guide to the FY 24 Louisiana Budget here.
Read the Louisiana’s 2024-2025 Responsible Budget here.
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