Louisiana’s economy works best when every family has the resources and opportunities they need to reach their full potential. That means having access to great schools, safe neighborhoods, affordable housing and health care, and a reliable safety net for families that fall on hard times.
Like many states, Louisiana emerged from the global Covid-19 pandemic in 2023 with an economic tailwind. The state unemployment rate hit an all-time low, and the number of people working hit a record high. This economic growth, combined with federal pandemic aid, meant that state lawmakers had unprecedented resources available to address the state’s many needs as they met for an election-year “fiscal” session.
Given such a great opportunity, the results were mixed – at best. Legislators wisely resisted the election-year temptation to make sweeping, across-the-board tax cuts, and opted instead to put much of the money aside for state and local construction projects. They increased funding for GO Grant college scholarships for low-income students, maintained funding for safety-net services and increased funding for higher education, including pay raises for college faculty.
But the session will likely be remembered for its chaotic final minutes when legislators made hundreds of changes to the budget bills without any public debate or discussion and for harmful anti-LGBTQ+ bills that attempted to outlaw gender-affirming care for youth and discussions of gender and sexual identity in K-12 classrooms. The last-minute changes meant that classroom teachers and support workers received a one-time stipend instead of a permanent pay raise, while early care and education programs were left with less funding than Gov. John Bel Edwards had requested.
Legislators also missed several opportunities to reduce the economic and structural barriers that keep too many Louisiana families in poverty and build a stronger safety net for those who struggle to get by. Bills to establish a minimum wage, double the state Earned Income Tax Credit and create a new tax credit for low-income families with young children all failed. Legislators also refused to pass a bill that sought to guarantee paid family and medical leave for most workers, including those with low incomes.
Louisiana’s next governor – and the new and returning legislators who voters will choose this fall – will inherit a much better financial situation than their predecessors. Louisiana will enter the next budget cycle with $2.7 billion in reserves, a nearly tenfold increase over 2016-17. But policymakers also face the challenge of replacing hundreds of millions of dollars in tax revenue that will be lost in 2025, when a temporary sales tax is set to expire. Failure to do so could spell a return to the structural deficits of the prior decade, which led to underinvestment in education and other services and caused Louisiana to fall farther behind its Southern neighbors.
