Louisiana college and university leaders have proposed a “standstill” budget for the 2025-26 fiscal year. The move comes after Gov. Jeff Landry’s budget proposal keeps overall state funding at relatively the same levels, and the Trump administration is proposing cuts to higher education. The Louisiana Illuminator’s Piper Hutchinson reports:
Lawmakers could choose to deviate from the governor’s proposed budget, but it is unlikely higher education will get a significant boost beyond the proposed funding. Landry’s budget would decrease state funding for higher education by about $68 million, largely the result of one-time expenses from the previous budget cycle. The proposal also acknowledges an increase in tuition and fee revenue, meaning the overall budget for higher education would increase just over $4 million.
The state Department of Health, which administers the Medicaid program that insures 1 in 3 Louisianans, is bracing for an $86 million cut in federal funding as a result of Elon Musk’s efforts to slash the federal workforce. The Advocate’s Emily Woodruff reports that state officials are getting mixed messages from the new administration in Washington:
In addition to Medicaid, LDH oversees services like mental health care, nursing homes, vaccination programs and clean drinking water initiatives. It’s not clear how the cuts initiated by DOGE may impact those programs. … During a March 25 budget hearing, LDH officials initially said they expected a loss of $10 million based on “a series of emails that were slightly difficult to interpret” that they received the night before, according to Karen Stubbs, assistant secretary of the Office of Behavioral Health, who answered questions about the cuts during a state Senate Finance Committee meeting.
The DOGE-ordered cuts are only the beginning, as Congress is working on a budget that would cut $880 billion from Medicaid over the next decade – which would force devastating cuts to health care services in Louisiana.
A guide to Medicaid
While the U.S. House and Senate must reach an agreement on competing budget blueprints, Medicaid is very much under threat. Shalina Chatlani of States Newsroom provides a helpful rundown of how the federal health care program operates, including the crucial role it plays in state budgets and who it serves:
But at the same time, Medicaid is the largest source of federal funds for states, accounting for about a third of state budgets, on average, and 57% of all federal funding the states received last year. … Medicaid is the single largest health payer in the nation, and is particularly important for people in poverty. Almost a fifth of people living in the United States are covered through Medicaid. But nearly half of all adults with incomes at or below the federal poverty line are insured through the program. Medicaid covers 4 out of every 10 children overall, but it covers 8 out of every 10 children below the federal poverty line.
A new blog from the Economic Policy Institute explains why people of color and children will be disproportionately affected by Medicaid cuts.
Inflation weakens tax cuts for families
The effort to provide financial support for families with children is starting to draw bipartisan support around the country. Indiana and Ohio could become the first Republican-led states to create a refundable child tax credit, and Vice President JD Vance supported the policy on the campaign trail last fall. But inflation has eroded the value of these tax benefits for parents. Columnist Ramesh Ponnuru explains how Congress could change that:
Many provisions of the tax code change automatically in response to inflation. Policymakers have deliberately chosen not to protect the child credit from inflation, presumably because they don’t want to make the extra room that such a move would require in the federal budget. … As Republicans try to rewrite the tax code this year, the question to ask is not whether they have become a working-class party willing to go further than ever before to help families. It’s whether they’re going to be stingier with families than their Bush-era predecessors were.
State Rep. Matthew Willard of New Orleans has filed legislation for the upcoming session that would create a refundable state tax credit for children under 6 who hail from low-income households.
EPA freezes funding for clean-energy projects
The Environmental Protection Agency has frozen $27 billion in funding to spur the growth of clean-energy technologies. The dollars came from the Greenhouse Gas Reduction Fund, which is part of President Joe Biden’s Inflation Reduction Act. Allison Prang, writing for States Newsroom, explains how the funding freeze is stranding local projects:
As a result, organizations around the country either already awarded money or in advanced talks to obtain funding are unable to access capital for planned projects. The projects run the gamut, focusing on anything from installing energy-efficient technology in affordable housing units with the aim of lowering residents’ utility bills to adding solar panels to schools. “There will be … very real capacity constraints if the funding is frozen indefinitely,” said Kari Groth Swan, executive director of the Minnesota Climate Innovation Finance Authority, a state body that finances clean-energy projects.
Louisiana has received $4.3 billion from the IRA. But these investments face growing uncertainty as shifting political priorities threaten funding continuity and equitable distribution. A new issue brief from Invest in Louisiana examines the focus and future of the IRA in Louisiana.
Number of the Day
$100 million – Amount of revenue that would ultimately be generated annually under a tax on social media companies that is being proposed in Minnesota. (Source: Minnesota Legislature via Route Fifty)