Louisiana lawmakers should adopt a 2024 fiscal-year budget that limits state government growth, bolsters the state’s rainy-day fund and provides a tax cut for individuals and businesses, according to a coalition of public-policy and business groups.
The coalition, which includes the Louisiana Association of Business and Industry (LABI), the National Federation of Independent Business (NFIB), Americans for Prosperity and the Pelican Institute for Public Policy, called on lawmakers keep a handle on government growth and expand the rainy-day fund in a way that will trigger cuts in the income tax and corporate franchise tax.
A letter the coalition released on May 16 argues that one-time funds and excess revenues should be spent on “shovel-ready transportation and infrastructure projects.”
Dawn McVea, the senior NFIB state director in Louisiana, said that other Southern states have figured out how to fund needed infrastructure projects while providing households with tax relief.
“States all over the South are experiencing surpluses,” McVea told the Louisiana Record in an email. “Those dollars belong to taxpayers and should be returned to them to the extent possible, not used to just continually grow the size of government. … Bottom line, there are overdue needs in Louisiana, but if Mississippi, Arkansas and Texas can figure out how to return money back to their citizens and still manage addressing their needs, I have to believe we can too.”
Louisiana’s rainy-day fund, which came into being during the 1998-99 fiscal year, is used to cover projected shortfalls in state revenues. But the state has been recording budget surpluses in recent years.
“We firmly believe that the Louisiana Legislature, in all of its wisdom, can figure this out,” McVea said. “The (Legislature’s Revenue Estimating Conference) just recognized over $300 million in excess revenues. At the very minimum, the rainy-day fund should have the appropriate deposits made into it that will trigger the income tax rate reductions. This is a no-brainer.”
The business coalition also urged lawmakers to devote state funding to paying down long-term debts, such as the state workers’ retirement program.
Louisiana has the 11th smallest rainy-day fund among the 50 states, as a share of state budgets, according to the Pew Trusts.