We are thrilled to launch the Citizens’ Guide to the FY 25 Louisiana Budget, a resource designed to help Louisianans better understand how their tax dollars are spent and what steps are needed to ensure a more fiscally responsible future. This year’s guide provides a thorough yet accessible overview of Louisiana’s operating and capital budgets, explores pressing budget challenges, and offers practical recommendations to foster long-term economic health and stability for our state.

The FY 25 Citizens’ Guide sheds light on the major drivers behind Louisiana’s $47.2 billion budget, which has grown significantly over the last decade. While this year’s budget is slightly smaller than FY 24 due to the reduction of temporary federal COVID-19 and disaster relief funding, spending remains $2.6 billion higher than it was in FY 23. The guide examines how increased federal funding through Medicaid expansion and steady growth in areas such as K-12 education and state debt have impacted Louisiana’s long-term fiscal outlook. For example, Medicaid alone now accounts for 40% of the state’s budget, a clear indication of how dominating healthcare costs have become in shaping the financial landscape.

Notably, the report dives into the fiscal cliff challenge—a recurring crisis born out of Louisiana’s reliance on temporary revenue sources such as federal disaster aid and short-term tax increases. Without meaningful reform, the state risks perpetuating a cycle of budget instability that makes essential services vulnerable to funding cuts.

The Citizens’ Guide also highlights the constraints Louisiana lawmakers face in allocating resources. With nearly one-quarter of tax revenues earmarked for specific purposes and 70% of the general fund locked into mandatory expenses like education and healthcare, there is limited flexibility to address evolving priorities or crises. For FY 25, more than $4 billion of the general fund is transferred to local governments, further complicating the state’s ability to target statewide priorities.

To confront these issues, this year’s guide lays out a series of actionable reforms to promote smarter spending and enhanced fiscal health, including:

  • A stricter spending limit tied to population growth and inflation to ensure budget sustainability.
  • Zero-based and performance-based budgeting to assess program effectiveness and curb unnecessary expenditures.
  • Reducing dedicated funds to free up resources and allow for better prioritization.
  • Refocusing capital outlay funds on critical infrastructure projects instead of non-essential local initiatives, which currently add to Louisiana’s growing debt burden.

This year’s Citizens’ Guide underscores the importance of addressing Louisiana’s unsustainable spending practices. It draws a clear connection between how we manage our state budget today and the economic opportunities available to future generations. Long-term fiscal stability requires prioritizing statewide needs—like healthcare, education, and infrastructure—while limiting unnecessary government growth and wasteful spending practices.

We invite you to explore the Citizens’ Guide to the FY 25 Louisiana Budget to learn more about the challenges and opportunities facing our state. With your support, we can work toward a smarter budget that benefits all Louisianans. Together, we can take meaningful steps to secure a brighter future for Louisiana.