RSS Feed

Louisiana took in more money than it spent in 2022, due to higher tax collections and an influx of federal funds, though expenses increased as well, according to the state’s comprehensive annual financial report.

The report published by the Louisiana Legislative Auditor last week shows total primary government revenues of $43.8 billion in fiscal year 2022, compared to total primary government expenses of $40.1 billion, leaving the state with a net ending position of $9.3 billion.

"Louisiana’s overall net position increased by $3.7 billion. Approximately $3.0 billion of this increase is from the State’s governmental activities and $619 million from business-type activities," according to the report. "For governmental activities, the State’s primary revenue sources are tax revenues included in general revenues … and federal revenues included in operating grants and contributions.

"Both of these revenue sources increased in fiscal year 2022, with a $2.1 billion increase in tax revenues and a $3.2 billion increase in operating grants and contributions," the report read.

Expenses increased by $2.9 billion in FY 2022 mostly due to increased federal revenues that are generally received or earned on a reimbursement basis, though a $391 million decrease in net pension liabilities contributed to the increase in net position.

Louisiana’s general fund increased by $898 million in FY 2022, due mainly to tax collections and federal funding outpacing a $3.7 billion increase in expenditures.

Sales taxes increased by $715 million, individual income taxes increased $556 million, corporate income and franchise taxes increased $503 million, and severance taxes increased $243 million.

"These tax collections grew mainly as a result of a quick recovery from the pandemic, enhanced by federal stimulus packages," the report read. "The outcome reflected historic increases in the general sales tax, individual income tax, and corporate tax collections."

The increase in severance tax and royalty collections was tied to a rise in oil prices, while a gaming revenue increase of $73 million "also reflects the increase in economic activity and disposable income," according to the report.

Louisiana reported $2.5 billion in intergovernmental revenues, mostly related to Medicaid, disaster relief, and education programs funded by the federal government. Federal revenues included an increase of $590 million for the Louisiana Department of Health to keep folks on Medicaid during the pandemic, $526 million for pandemic and hurricane recovery, and $1 billion to help schools recover from learning loss during the pandemic.

Long term, Louisiana reported an unrestricted net position of negative $12.2 billion, which includes $5.3 billion in net pension liability, a $6.3 billion liability for post-employment health care benefits, $3.3 billion in long-term debt for capital grants, and a $2.1 billion in "unfunded reserves for incurred claims payable to outside parties for worker’s compensation, disallowed costs, and various lawsuits."

The Louisiana Legislative Auditor also pointed to ongoing issues with unemployment insurance totaling nearly $1 billion that remain unresolved.

"As of November 2022, the Louisiana Workforce Commission identified approximately 23,000 claims totaling $187 million paid from July 1, 2021, through June 30, 2022, with various issues indicating potential overpayments to claimants," LLA Mike Waguespack wrote. "In addition, there are 100,600 claims totaling $819 million identified in the prior years (March 15, 2020, through June 30, 2021) with unresolved issues indicating potential overpayments to claimants."

Patterson Municipal Government Photo
On Jan. 4, Patterson Outreach served 447 hot meals to senior and disabled citizens. The meal was compliments of an anonymous church, Stacey Lancaster and the Purple Lemon, and Patterson Truck Stop and customers. Desserts were donated by Pastor Mark and Paula Norwood, LeeAnn Dumount and Donna Thibodaux. Patterson Outreach thanked Police Chief Garrett Grogan and his staff for their service. "The smiles and thanks are so heartfelt," said Patterson Outreach Director Allise Jennings-Salazar "Also January makes two years we have been serving hot meals to our senior and disabled citizens. Thanks Mayor [Rodney] Grogan for the vision.”

State Treasurer John M. Schroder issued a warning Monday to alert the public to recent online advertising that may be misconstrued as Louisiana unclaimed property advertisements.

He urged residents to be wary of “unclaimed compensation” social media posts and advertisements after a number of people reported seeing misleading information online.

“Treasury enlists every safeguard possible to protect citizens’ information regarding unclaimed property,” Schroder said. “It is always free and safe for you to check for unclaimed property you might be owed at LaCashClaim.org or MissingMoney.com.”

According to Schroder, each year, businesses turn over millions of dollars in unclaimed cash, stocks, gift cards, bonds, securities and insurance proceeds to the state treasurer's office.

At present, over $1 billion is waiting to be claimed in Louisiana.

“Unclaimed property is money and other assets that get turned over to the state when the owner can't be found,” said Schroder.

“If you forget to cash a paycheck, overpay a utility bill or leave behind a security deposit, to name a few examples, that money eventually gets handed over to the state if you can't be found.

The state holds onto it until you reach out to claim it.”

One in six individuals in Louisiana has unclaimed property, with refunds averaging $900.

While LaCashClaim.org is Louisiana’s official unclaimed property site, the state also formally collaborates with MissingMoney.com, from which individuals can search for claims from 49 states, including Louisiana.”

“Unclaimed property scams are increasingly common. If you've been contacted about money that could be yours, remember that there is never a charge for you to collect your money from our program. When searching online, be sure you are on a legitimate website,” said Kathleen Lobell, director of Louisiana’s Unclaimed Property Division.

“That way, you won't lose cash or risk having your identity compromised when trying to claim property.”

Not such a happy new year if you were a property owner in the Bayou State. Property insurance rates throughout Louisiana are skyrocketing.

In New Orleans, the state-run insurance company now charges as much as an 83% increase. Headlines in national publications blurred out.:
"Louisiana insurance market is collapsing!"

The Louisiana insurance commissioner’s efforts to pour state funds into the coffers of insurance companies was shut down by the legislature just this past week.

And for good reason.

There was no specific plan offered to lawmakers besides “Just give us more money to spend.”

Over in Florida, a state that has similar problems in finding affordable homeowners insurance for its citizens, legislators grabbed the bull by the horns and came up with a number of solid changes.

One change was to demand that the insurance commissioner in Florida resign, which he promptly did.

A number of smaller insurance companies were allowed by the Louisiana Insurance Department to begin operating in the state without proper back-up funding.

When dealing with risky insurance coverage, it’s imperative that insurance companies buy protection called reinsurance. So if a company gets into financial trouble, there is a backup plan to turn to.

But many of the smaller companies selling property insurance in Louisiana did not have this proper back up.

They should never have been allowed to come into the state to begin with.

NBC news did an expose’ on the Louisiana crisis, quoting critics as saying many companies failed to buy enough reinsurance and that the state Department of Insurance should have prevented those mistakes from happening.

“This is not a fluke of statistical bad luck. This was very clearly a political decision that the Department of Insurance made to undercapitalized insurance companies to allow them to make more profit on the front end and with the state taking the risk on the back end,” said Jesse Keenan, a real estate professor at Tulane University who studies climate change and the economy. “This is about politics. This is about trying to keep the rates lower. This is about the political pressure to lower the rates.”

While Louisiana stands by and twiddles its thumbs on any insurance reform efforts, Florida has taken the opposite approach.

Here was a typical headline in newspapers all across the sunshine state last week: "Florida enacts weeping property insurance reforms." Florida directly addressed the reinsurance problem by creating the Florida Optional Reinsurance Assistance Program.

FORA will be administered by the State Board of Administration.

It permits eligible insurers to purchase reinsurance coverage under this new plan.

Let me tell you why reinsurance is so important.

When an insurance company has sold too many policies that might jeopardize their financial standing, they buy insurance just like you and I do.

The insurance company goes to a “wholesaler” or a reinsurer to cover a portion of their losses. Kind of like the bookie laying off part of his bet.

The insurance company gives up a portion of the premium to buy their own insurance coverage in case the losses potentially get too high.

Because of recent so many storms, reinsurance has become quite expensive.

That’s why the Florida governor and legislature stepped in.

The new Florida law, strongly supported by Gov. Ron DeSantis, doesn’t come cheap.

The state created and funded $1 billion reinsurance fund.

So can Louisiana afford to do the same thing?

It simply comes down to a matter of priorities.

The Louisiana Legislature, in this coming year, will have a surplus over last year of $1.5 billion.

Just how important is affordable property insurance to legislators who are hearing massive pleas from their constituents?

In the past year and a half, Louisiana has lost 67,508 residents who left the state. Many of those who moved on cite the
high cost of insurance as their reason for leaving.

If the Legislature does not find a solution to the lack of reinsurance, this out migration will continue.

The outrageous cost of property insurance should be a top concern for the lawmakers in the coming legislative session.

Peace and Justice
Jim Brown

Jim Brown’s syndicated column appears each week in numerous newspapers throughout the nation and on websites worldwide. You can read all his past columns and see continuing updates at http://www.jimbrownusa.com.