Louisiana lawmakers debate spending on better-than-expected revenue surplus

Lawmakers in Louisiana received a revised better-than-expected revenue forecast saying there will be hundreds of millions of dollars in additional surplus funds available to spend in this year’s budget.Gov. John Bel Edward’s administration is seeking to restore his previous proposal for teacher pay raises and additional early childhood education funds.Thursday’s Revenue Estimating Conference recognized an additional $323 million for the current budget and a more than $400 million bump for next year’s.

Louisiana lawmakers received a revised sunny revenue forecast Thursday, with economists saying hundreds of millions of dollars in additional surplus funds are available to spend for this year’s budget.

Despite the better-than-expected revised forecast, how lawmakers spend the extra funds remain up for debate. The House is taking the more conservative approach of wanting to pay down debt, while legislators in the Senate are hoping to breach the state’s expenditure cap to spend money in a multitude of areas, including infrastructure.

On top of the hundreds of millions of dollars in surplus that lawmakers were already working with, Thursday’s Revenue Estimating Conference recognized an additional $323 million for the current budget and a more than $400 million bump that lawmakers can spend on next year’s. With the extra money, Gov. John Bel Edward’s administration is making the plea that his previous proposal for teacher pay raises and additional early childhood education funds, which were cut from the House’s budget plan, should be restored.

With just three weeks left in Louisiana’s 2023 legislative session, which focuses on fiscal matters, lawmakers must draft and pass a budget before they adjourn on June 8.

Earlier this month, Louisiana’s Republican-dominated House advanced a budget plan that stripped dollars sought by Edwards to fund $2,000 teacher pay raises, early childhood education and public colleges. Instead, lawmakers steered a windfall of hundreds of millions of dollars in extra state revenue toward paying down retirement debt.

Republicans called the plan financially responsible and said it would save school districts money in the long run by letting them spend funds as they best see fit, which could include wage increases for educators. Additionally, proponents argue that it will prepare the state for a potential fiscal cliff in 2025 when a temporary 0.45% state sales tax expires.

Edwards’ administration argues to use the surplus funds elsewhere, especially following news of the revised revenue forecast.

‘Makes perfect sense to prepay some of your mortgage debt,’ Commissioner of Administration Jay Dardenne, Edwards’ chief budget architect, said Thursday. ‘But if you have a leaky roof, if you have something that needs to be fixed and you have one-time money that would address a critical need that’s important to you as a family, you ought to use the money for that purpose instead of prepaying a debt that has already been scheduled to be paid.’

Across the statehouse rotunda, the GOP-controlled Senate is debating busting Louisiana’s expenditure limit. Senate President Page Cortez argues that failing to breach the cap could cause the state to miss out on hundreds of millions of federal grant dollars and that Edwards could possible call them back to the Capitol for a special session, The Advocate reported.

The expenditure restraints were inserted to the state constitution decades ago. Cortez proposes increasing the limit by nearly 5% this year and nearly 5% next year, giving lawmakers more room for spending. However, in order to do so it requires a two-thirds approval from both chambers. Negotiations over breaching the limit continue. Additionally, the Senate Finance Committee continues to draft its budget proposal in which there will be two versions — one that breaches the expenditure cap and one that does not.

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