Louisiana is in good shape financially as work is underway to craft a state spending plan for next fiscal year, but Jan Moeller with Invest in Louisiana warns the state could see budget deficits in future years. Moeller says the reason is simple.
“One reason is that state revenues have plateaued and are actually starting to decrease a little bit. And the state’s expenses are starting to increase,” Moeller said.
Moeller says state revenues peaked in 2024 and are slowly going down, and projected costs of running state government are going up.
One example is the proposed $82 million increase in funding for the Department of Corrections. Meanwhile, the state must make up for a loss in federal dollars because of the budget bill approved by Congress in 2025.
“Louisiana is going to be picking up more cost for food assistance and healthcare in the coming years,” Moeller noted.
Moeller says there’s an extra $42 million in this year’s budget proposal to pay for extra administrative costs for SNAP, and that figure is expected to grow in future years.
Moeller says the projections of future budget deficits is just not his analysis, it’s also the conclusion of the Legislative Fiscal Office, which is concerning for those who count on state funding.
“Make it harder to fund things like pay raises for teachers, who’ve been going four years now without a permanent raise, money for early childhood education, money for infrastructure, money for healthcare coverage,” Moeller said.
Legislative leaders say if the state budgets smartly this year, they can avoid revenue shortfalls in future years.
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