The Louisiana Legislature gavels in at noon on Monday for the start of a three-month general lawmaking session. The Times-Picayune | Baton Rouge Advocate breaks down the major issues, which include carbon capture, workforce training, legislative redistricting and Gov. Jeff Landry’s request to send another $44 million in public support to the LA GATOR Program:
Last year, the state Senate rejected Landry’s bid to boost funding for LA GATOR, his signature education program. And Senate President Cameron Henry, who has said he is concerned about the program’s cost growing unsustainably, has again voiced skepticism this year. … (S)keptics worry the program will give money to parents who were going to send their children to private schools anyway. And others point out that, in the state’s previous voucher program, participating students had lower test scores than public school students.
The executive budget includes $42 million in new spending to administer the Supplemental Nutrition Assistance Program – costs that were shifted from the federal government to the state as part of the massive budget and tax megabill. There are other serious budget questions that lawmakers must address:
(I)n May, just before the session ends, Louisianans will head to the polls to vote on whether to make a teacher pay raise permanent. If they vote against it, the Legislature may have to find another way to come up with the funds, or teachers could lose the temporary stipends they have received over the past several years. But Senate President Cameron Henry thinks one of the biggest budget issues this year will be in higher education: the state will have what to do about universities that are perennially in the red, he said.
A looming U.S. Supreme Court ruling in the Louisiana v. Callais case could eviscerate the federal Voting Rights Act and clear a path for state lawmakers to redraw Black-majority districts:
Should an opinion come down during the legislative session, there’s a chance it will prompt the Legislature to redraw Louisiana’s congressional map — a process that would almost certainly be deeply contentious and take center stage. In anticipation of a possible ruling, some state lawmakers have already filed bills that would allow them to redraw Louisiana’s six congressional districts this year.
A go slow legislative session
Gov. Jeff Landry and state lawmakers have moved quickly in recent years to overhaul Louisiana’s tax code and propose constitutional changes that voters later rejected. The Times-Picayune | Baton Rouge Advocate’s editorial board urges state leaders to slow down as they navigate through the legislative process:
A key reason we urge a go-slow approach this year is that big changes have also been happening in Washington. The One Big Beautiful Bill Act made significant cuts to Medicaid and SNAP, the federal food aid program, that are already starting to impact state budgets and will likely shift more costs in the coming years. The full impact remains to be seen, but lawmakers would be wise to set Louisiana up to be prepared. That’s why this year, we think slow and steady is the way to go.
Gov. Jeff Landry made a $47 billion “standstill” budget request that would keep most state programs financed at current-year levels. Invest in Louisiana Executive Director Jan Moller explains what the Legislature can do this year – and in future years – to ensure the state is making adequate investments in its citizens in the face of looming budget shortfalls.
Louisiana gives massive data center tax breaks to tech giants
The sales tax breaks Louisiana has given to three companies to build AI data centers could cost the state as much as $3.6 billion. While other states have used generous tax incentives to attract data centers, Louisiana’s highest-in-the-nation sales tax makes its incentives more expensive. The Times-Picayune | Baton Rouge Advocate’s Sam Karlin reports:
Louisiana is “middle of the pack” in terms of its job and spending requirements for incentives, [Virginia Tech engineering professor Dimitrios Nikolopoulos] said. Unlike some states, Louisiana exempts construction costs but doesn’t exempt electricity taxes, which some do. … “What makes it notable is the combination of the high combined tax rate — which actually makes the exemption more valuable per dollar spent than in lower-tax states — and the sheer scale of the projects it’s attracted,” Nikolopoulos said.
Some states are now looking to reign in data center tax breaks as their fiscal consequences become clearer:
[Nikolopoulos] noted that Virginia auditors have found that its tax break for data centers only created 48 cents in new state revenue for every dollar it gave up, which they classified as a “moderate” benefit. And the companies are sourcing much of the server hardware from suppliers in other states, he said. … Greg LeRoy, head of Good Jobs First, said many data center tax breaks were initially set up when data centers were much smaller, and state budgets wouldn’t take that big of a hit. Now, three states — Virginia, Texas and Georgia — have crossed the threshold of giving at least $1 billion annually in tax breaks for data centers.
A new issue brief from Invest in Louisiana’s Emanuel Lain, III explains how the state requires less transparency and accountability for its data center tax breaks than other Southern states.
Does Louisiana higher education need an overhaul?
Louisiana’s sprawling – and arguably outsized – higher education system has 30 post-secondary schools for a state of 4.6 million people. State colleges are facing budget challenges stemming from declining enrollment and reduced state investment. The Times-Picayune | Baton Rouge Advocate’s Haley Miller and Marie Fazio report:
“There’s no system or school in our state that’s not faced with this,” University of Louisiana System President Rick Gallot said about the system’s funding. “Obviously, some have been in a better position to absorb it and address it than others, but generally, we all face the same main challenge, and that is the amount of state resources being allocated to our schools. It’s simply putting us further and further behind our southern peers.”
State leaders have an idea of what changes they want to make to Louisiana college and universities:
Those working to solve the state’s small public universities’ budgetary and enrollment woes often point to two paths forward for a school in crisis: absorption into another system, currently underway with the University of New Orleans migrating from the UL System to the LSU System, or specialization, which involves scaling back programs that fail to align with industry needs and bolstering more workforce-oriented majors. “I do think that specialization will be the order of the day,” Louisiana Commissioner of Higher Education Kim Hunter Reed said. “The institutions will not be able to be all things for all people.”
Number of the Day
$329 million – Louisiana’s projected state budget shortfall for the 2027-28 fiscal year, which balloons to nearly $1 billion for the 2029-30 fiscal year. Recent state tax cuts combined with new costs resulting from the federal tax and budget megabill are driving the looming budget deficits. (Source: Joint Legislative Committee on the Budget)