Louisiana budget 2022-23: Winners and losers

The Louisiana Legislature passed its final version of the 2022-2023 state budget proposal Thursday, totaling an unprecedented $47 billion with a focus on major bridge projects, increasing salaries for lower-paid government workers and paying off state debt.

The state has billions of dollars in additional funding to spend in the fiscal year that starts July 1 thanks to the confluence of the COVID-19 pandemic recovery, hurricane rehabilitation and a once-in-a-generation investment from the federal government. 

This coming budget cycle is expected to be the peak of Louisiana’s boom times though. The state revised its revenue projections for the next budget cycle down earlier this month. Louisiana also has a massive sales tax cut scheduled for 2025 that will make it more difficult to pay for higher education, health care and prisons.

Lawmakers fast-tracked the state’s budget-building process this year, approving a final plan more than two weeks ahead of the normal schedule. Republican legislative leaders want to give themselves a better chance to override any of Gov. John Bel Edwards’ budget vetoes, which will be easier if the governor is forced to issue the vetoes while lawmakers are still in their regular session.

Here’s a look at who benefits and who was left out of Louisiana’s largesse:

WINNERS

Lake Charles bridge project: Lawmakers allocated $200 million to the effort to replace the Interstate 10 bridge in Lake Charles, twice as much as Edwards proposed putting toward the project.

People who work with people with disabilities: Lawmakers have increased rates for organizations that provide home health care workers, facilities and programs for people with disabilities. This increased pay is supposed to go to the employees who work directly with patients and clients. The amount could vary across the types of services but is expected to cost the state more than $80 million annually. 

Federal government: Lawmakers and Edwards are using a lot of Louisiana’s extra cash to pay off federal debts, particularly those related to natural disasters. Some of the extra funding goes toward a $400 million payment to close out Louisiana’s bill for the hurricane protection system built after Hurricane Katrina. The state is also paying back hundreds of millions of dollars of smaller federal debts from storm response efforts.

Crisis pregnancy centers: Anti-abortion pregnancy centers receive more than $1 million in additional funding in the current budget plan. The bulk will go toward online services and counseling for pregnant clients.

The religious-based centers say they provide support for people who find themselves pregnant without adequate financial or emotional support. Abortion rights groups have been critical of the these organizations, saying they counsel people against using oral contraception and don’t have doctors or nurses on staff to assist with medical problems. 

Employers: Louisiana is putting half a billion dollars of its extra funding into the state unemployment trust fund, which was drained during the first few months of the COVID-19 pandemic. This means employers who are typically responsible for paying into the pot of money won’t bear that responsibility.

Lawmakers also voted to continue to suspend the higher rate of fees employers are supposed to automatically pay, under state law, until the unemployment trust fund contains at least $750 million. Legislators and the governor have agreed that the higher rates would be too burdensome for businesses as they try to emerge from the pandemic.

Expungement seekers: The current budget plan calls for $2.2 million to hire additional staff at Louisiana State Police to create an automated criminal record expungement process. If it gets off the ground, thousands of people with criminal records would be able to have their records expunged – starting in August 2024 – without having to hire an outside attorney and pay $550 in fees to do so.  

Senate President Page Cortez:  The Senate passed the final version of the budget sent to the governor with no debate or dissent over the plan. Cortez, R-Lafayette, also managed to get the Louisiana House to agree to the Senate’s budget proposal entirely. House members made no amendments to the Senate plan before it went to the governor.

Lower-paid state workers: Lawmakers voted to boost entry-level pay for prison staff and child welfare workers, which will cost a combined $17.4 million annually going forward. 

Sheriffs: The current budget proposal includes a higher rate of pay for local sheriffs who house state prisoners in work release programs. The increase is slated to be $3 per person per day, which equates $1.8 million annually. Currently, sheriffs are paid between $10 and $25 per day for housing state prisoners, and they get to keep a cut of the wages state prisoners make in work release programs. 

1983 Tangipahoa Parish flood victims: The state has agreed to pay approximately 1,200 victims of a 1983 flood in Tangipahoa Parish $101 million of a legal settlement a court awarded to them almost four decades ago. Louisiana was found liable for the flood, caused by the construction of Interstate 12, but has never handed over any of the money owed to these people. 

North Louisiana rail: A passenger rail line from Atlanta to Dallas through north Louisiana  was awarded $10 million, though the governor did not allocate this project any money. 

Judges: State and city judges across Louisiana will get another pay raise this coming fiscal cycle totaling $2.5 million under the proposal. The seven members of the Louisiana Supreme Court will collectively get a $64,000 pay boost.

In 2019, legislators passed a law that requires the state to raise judge’s pay 12.5% annually until 2023. 

Current lawmakers: Lawmakers budgeted more than $100 million in pet projects for their preferred nonprofits, local police departments, local parks and community facilities, though these entities aren’t supposed to be the state’s responsibility. Most of these projects were selected by legislators through a private process, and lawmakers tried to avoid discussing them publicly at all.

State spending on the Legislature itself will grow $12.2 million. At least some of this additional money will pay for a new 21-person security force at the Capitol and a Senate staff pay raise. It can also be used to cover legal fees from lawsuits over the political maps lawmakers recently approved. 

Water and sewer systems: Edwards and lawmakers have agreed to devote over $450 million to upgrade and repair Louisiana’s ailing water and sewerage systems. This is on top of $300 million allocated last year. 

Jeff Landry: When it approved the budget proposal this week, the Senate inserted $1.7 million in “performance rate adjustments” for unclassified employees in the Louisiana Department of Justice that Attorney General Jeff Landry runs. They also added back six positions to Landry’s agency that Edwards’ removed from the state budget proposal earlier this year.

LOSERS

People who wanted a tax cut: Republican legislative leaders successfully sidelined efforts to cut taxes over the next year. The House voted to accelerate the large sales tax cut already scheduled for mid-2025, but that proposal was stymied in the Senate. With the budget getting final legislative approval, it’s very unlikely any effort to slash taxes over the next year could be successful.

Local law enforcement, first responders: Legislators did not go along with the governor’s proposal to increase state supplemental pay for local police and first responders by $100 each month, for a total of $25.7 million annually. Instead, they agreed to a lump sum payment of $1,200 for the next fiscal year only. 

Government transparency: The lack of a budget debate in the Senate and no public push-and-pull between the House and the Senate over the spending plan means there was very little public airing of private negotiations over the Legislature’s final $47 billion proposal.

Even rank-and-file House members have complained they have very little idea of what took place during private budget discussions between legislative leaders or why the Senate made some changes to the House version of the spending plan. 

Small government proponents: The approved budget plan increases the state’s future spending significantly. The Legislature’s approved budget relies on $136.2 million of surplus revenue to cover some of the state’s ongoing expenses, according to the legislative fiscal office, meaning the state’s reliable income already doesn’t line up with its ongoing spending.

The gap between state revenue and expenses will also get larger. Louisiana is projected to have $205.7 million less to spend in the 2023-2024 budget cycle than they do in the one that starts July 1. By the middle of 2025, the amount of money available to spend on universities, health care and prisons will have dropped by over $420 million, according to current revenue projections.

This pending fiscal cliff is largely exacerbated by the legislators’ decision to let a 0.45% portion of the state sales tax expire in 2025. Legislators last year also voted to start diverting hundreds of millions of dollars annually from the fund that pays for health care, higher education and prisons into transportation projects, even though the state currently doesn’t have a plan for replacing the revenue. 

Baton-Rouge-to-New-Orleans commuter rail: The Baton Rouge-to-New-Orleans commuter rail project is getting $12.5 million in the recently passed budget plan, half of what the governor originally proposed. 

Future lawmakers: By voting for a budget that increases state spending in future years, current lawmakers have made it more likely that future lawmakers – those serving in 2025 especially – might have to make large budget cuts. Those spending reductions would likely hit higher education and programs for people with disabilities because their budgets don’t have state constitutional protections.  

Rep. Blake Miguez: The chairman of the House Republican Caucus objected to an increase in government spending and use of one-time money for ongoing state obligations. In the end though, Miguez was only able to get a handful of Republicans to vote with him against the main budget bill Thursday.

Besides Miguez, only five of the remaining 68 Republicans in his caucus joined him in opposing the legislation. The Erath lawmaker was also unable to slow down the budget process, despite complaining that the House members had not been given enough time to review Senate changes before being asked to give it final approval. 

WINNERS AND LOSERS

K-12 school teachers, support staff: Teachers and support staff will receive annual pay raises of $1,500 and $750 respectively starting July 1. The increase will cost the state $148 million annually moving forward. 

Edwards and Democratic lawmakers lobbied for even larger raises – $2,000 and $1,000 annually – but weren’t able to convince Republican leadership. 

Higher education faculty: Public universities and college faculty are expected to receive a 3% raise starting July 1 – not as high as the 5% the governor wanted. It will cost the state an additional $20 million annually.

The Louisiana Senate removed some of the pay raise, saying that lawmakers preferred to make “strategic investments” in certain facets of higher education instead. 

Baton Rouge bridge project: A new Mississippi River bridge in the Baton Rouge region has been allocated $300 million, less than the $500 million the governor proposed. The money is expected to be enough to attract some additional federal support and private investment.