The Legislature overhauled Louisiana’s tax laws last year, replacing the state’s progressive income-tax structure with a 3% flat rate, raising and expanding the state’s sales tax and eliminating the corporate franchise tax. Those changes will soon be felt in the state budget, as David Jacobs of LaPolitics reports:
Of the two biggest tax sources, sales taxes are coming in about 30% higher than before the makeover, which is slightly more than was projected, Revenue Secretary Richard Nelson says. … As for the other big one, personal income tax collections are down by about $1.1 billion since Louisiana replaced its tiered system with a flat 3% rate, which is a softer hit than was expected. However, Nelson notes that the lower income tax rate in place this year largely will be reflected in the returns people file next calendar year, so the impact on state coffers will be more evident in the back half of the current fiscal year that ends June 30.
Some lawmakers and capitol insiders would like to see the Legislature go a step further and eliminate the state’s personal income tax altogether. But this would be a bad move at the wrong time:
Jan Moller of Invest in Louisiana, on the other hand, says the last thing lawmakers should be trying to do is cut taxes again, pointing to the federal cuts and the national and global economic uncertainty. State government will be shouldering a bigger share of the cost of Medicaid and food assistance, and that could be true of the next natural disaster as well, he says. “We know that budget shortfalls are coming back,” Moller says. “The governor and the Legislature are looking at one more budget cycle that’s kind of calm before the waters get more treacherous.”
Louisiana seniors brace for increased Medicare costs
The Centers for Medicare and Medicaid Services announced last week that the standard monthly premium for Medicare Part B in 2026 will increase to $202.90, up nearly 10% from this year and the second-largest annual increase in history. The Times-Picayune | Baton Rouge Advocate’s Mark Ballard explains how the price increase will eat a large portion of crucial cost-of-living adjustments:
For seniors, most of whom live on fixed retirement incomes, this year’s higher costs will significantly cut into the annual cost of living adjustment, called COLA, that better aligns Social Security benefits with inflation. Part B increases will turn the $56 average monthly COLA increase for 2026 to $38.10. … The increased costs for Medicare premiums and higher deductibles effectively lowers the annual COLA way below the current inflation rate, putting a financial strain on the elderly, particularly those with low and middle incomes, KFF says.
Louisiana seniors will be hit hard by the premium hikes:
About 14.2% of the state’s population over the age of 65 — the national average is 10% — lives in poverty, making less than $21,150 annually for a couple, according to America’s Health Rankings, a report compiled by the United Health Foundation, a private health care study group based in Minnesota and associated with the insurance giant, UnitedHealth Group Inc. As many as 6% of Louisiana adults older than 65 simply went without medical care because of the cost, according to the 2025 State Medicare Scorecard released in October. That is the highest rate in country and nearly four times more than the 1.6% in Vermont.
An expert’s take on Louisiana’s child-care affordability crisis
Affordable, high-quality early care and education programs help put children on the path to a brighter future and allow parents to stay in the workforce. But rising operating costs could force many child care providers in Louisiana to shutter, according to a recent report from the Louisiana Policy Institute for Children. The Times-Picayune | Baton Rouge Advocate’s Elyse Carmosino sat down with Rochelle Wilcox, Executive Director at Wilcox Academy of Early Learning, to discuss the state’s child care affordability crisis:
What we’re seeing is that providers are not paying themselves. They’re paying their staff, then they’re trying to pay all of their bills. If there’s anything left, then they’ll take maybe an owner’s draw or a small stipend for themselves. I say all the time, “What business do you go into that you are expected to still live in poverty?” Most of our providers across the state are living in poverty because they see the need in the community and want to help. They know this is about brain development. They know this is something that’s going to get our economy working, yet nobody respects that.
Wilcox explains what the state can do to ease the financial burden of child-care centers:
We need money. I would love to see us funded the way K-12 is funded. I would love to see early care and education treated like a right at birth. If you want, if you need, you should be able to send your little person to your neighborhood early learning center.
Linking wages to housing affordability
Santa Fe is addressing its housing-affordability crisis with a first-in-the-nation policy that ties the city’s minimum wage to rental costs. The AP’s Susan Montoya Bryan explains how the ordinance will work:
Santa Fe’s minimum wage will increase to $17.50 starting in 2027. The annual increase historically has been tied to consumer prices, but going forward a new blended formula will be used to calculate the annual increase, with the Consumer Price Index making up one half and fair market rent data making up the other. There’s a 5% cap in case costs skyrocket, and if consumer prices or rents tank in any particular year, the minimum wage will not be reduced.
An estimated 9,000 workers – or 20% of the city’s workforce – will see a pay increase once the ordinance kicks in.
Number of the Day
45 – Number of Louisiana’s 64 parishes that had increased numbers of residential foreclosure filings for the first six months of 2025 compared with the same period last year. (Source: Attom Data via The Advocate)