Session will open with an extra $1.6 billion

Louisiana is expected to have at least $1.6 billion in excess and surplus revenue when the legislative session convenes Monday, but how the money is spent, or not, hinges on whether lawmakers increase the state’s spending cap.

Legislative leaders who discussed priorities for the upcoming session during a webinar hosted by the Public Affairs Research Council of Louisiana on Friday agreed Louisiana’s constitutional restraints on spending will be the top consideration in 2023.

Of the $1.6 billion surplus, about $500 million can be spent without exceeding the current spending limit in the state constitution, with the rest going into a rainy day fund or other savings. That’s after constitutionally mandated payments from surplus to the rainy day fund and unfunded accrued pension liabilities. A vote of two-thirds of lawmakers in both chambers is required to change the state’s spending cap.

Senate President Page Cortez, R-Lafayette, said he’s in favor of increasing the expenditure limit if the money goes to one-time expenses, rather than toward growing the government.

“My priority would be if we raise the cap, all of the money be spent on one-time expenses,” he said, citing water, sewer and infrastructure projects as examples.

“I think you would be doing a disservice … to say I’m just putting it in a savings account.”

Cortez suggested addressing the rising costs of existing construction projects due to inflation and making other infrastructure investments that could ultimately save the state money in the future.

Sen. Gerald Boudreaux, D-Lafayette, agreed with Cortez that “we need to have some parameters in place so we can (increase) the spending limit,” but said lawmakers should hear from constituents on their needs.

“The rainy day fund has more money in that account today than it ever has in history,” he said, citing other pressing issues like the expiration of federal COVID benefits. “We need the residents of the state to chime in.”

“It’s now our responsibility to take care of the people of Louisiana,” he said.

Rep. Jack McFarland, R-Winnfield, chairman of the conservative caucus, said he’s against raising the cap, and noted the money can legally be used to pay down debts like the unfunded accrued pension liabilities and hurricane debt. He also pointed to the estimated loss of $900 million in revenues when a temporary 45 cent sales tax expires in two years.

“We still haven’t officially addressed that shortfall,” he said. “Some of the things that will inform our financial well-being going forward we don’t know yet.”

McFarland agreed with Cortez and Boudreaux in support of teacher raises, though he suggested “more local participation” to fund them.

“We support a teacher pay raise. I think we can do it in a different way without increasing our budget to do it,” he said, noting the state has funded five raises in the last seven years.

“It’s just the amount and where does the money come from.”

Lawmakers also briefly discussed proposals to legalize marijuana, restructure the state’s tax system, transgender rights, early childhood education, legislative pay, school security and other issues.