The number of days that states could cover operations using only rainy-day funds fell in fiscal year 2025, which marked the first decline since the Great Recession. Pew’s Demetra Aposporos explains how states should handle budget reserves as the risk of recession increases and the federal government enters an era of fiscal retreat:
As policymakers navigate today’s fiscal pressures—the greatest since at least 2020—budget reserves will be a crucial tool that can help stabilize state finances. But leaders need to be careful about relying on rainy day funds to close deficits because many states’ budget gaps stem from structural imbalances—when recurring revenue cannot support recurring expenditures—rather than short-term shocks. While reserves can help during times of need, they’re not a sustainable solution for persistent shortfalls.
An October analysis from Pew found that Louisiana could run for 31.3 days using only rainy-day funds, well below the 50-state median of 46.9 days.
Economic challenges for Black Americans
The U.S. economy weakened in 2025 across several metrics, as unemployment rose and progress on reducing inflation stalled. As. Gbenga Ajilore of the Center on Budget and Policy Priorities explains, the weak labor market took a heavier toll on Black workers:
Historically, the Black unemployment rate is higher than the overall unemployment rate even when the economy is strong, due to structural racism and ongoing discrimination in education and employment. When the economy weakens, Black households are usually the first to feel the effects, with Black workers tending to be the first fired and last hired during the business cycle. In December, the Black unemployment rate was 7.5 percent, the highest since October 2021.
Ajilore explains how price increases caused by the Trump administration’s tariff policies hurt Black-owned small businesses:
Whether it is beauty stores that rely on international supply chains or transportation firms that source globally for parts and equipment, these Black-owned businesses are facing higher costs that require them to make decisions about either raising prices, cutting staff, or a combination of both.
Higher utility bills on the way
Louisianans will face higher utility bills in the coming months as a result of the recent winter storm. Frigid temperatures required customers to increase their natural gas usage, which caused utility companies to buy gas at elevated rates. Louisiana allows companies to pass those increased costs onto customers. The Times-Picayune | Baton Rouge Advocate’s Sam Karlin explains:
“This is a problem we’ve been trying to highlight for both regulators and consumers for a while now, since our electricity system in the region is so dependent on gas, it means we are all vulnerable to even small increases in the cost of fossil gas,” said Logan Burke, executive director of the Alliance for Affordable Energy, a nonprofit that represents consumers. “Louisiana must diversify to fuel free resources to stabilize our bills.”
The constitutionality of Angola’s ‘Farm Line’
Last May, U.S. District Judge Brian A. Jackson ordered the Louisiana Department of Public Safety and Corrections (for the second time) to improve working conditions on the “Farm Line” at the state penitentiary at Angola, where men are forced to toil away in fields for little or no pay. Bernard Smith of the Lens explains the significance of Jackson’s recent move to certify the ongoing case as a class-action lawsuit:
The class certification marks a critical turning point in the case because it allows the court to address the Farm Line as a systemwide practice rather than a series of individual claims, attorneys for the incarcerated men said. “Class certification is a major step toward protecting the constitutional rights of everyone incarcerated at Angola,” said Lydia Wright, legal director of Rights Behind Bars, who is representing the Farm Line along with lawyers from the Promise of Justice Initiative.
A five-day trial to determine whether the Farm Line is unconstitutional began this week:
During the trial, the Farm Line’s very existence will be called into question, Wright said. “The certified classes challenge the Louisiana State Penitentiary’s operation of the Farm Line, an unlawful, degrading, and dangerous disciplinary practice through which the state compels incarcerated men at Angola to labor under conditions designed to replicate aspects of chattel slavery,” Wright said.
Number of the Day
$528 – Average monthly advance premium tax credit, for exchange customers receiving them, in 2024. Congress allowed the credits to expire at the end of 2025, which has doubled the amount people will have to pay for health insurance, on average. (Source: Centers for Medicare & Medicaid Services via Pew Research Center)