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Louisiana’s budget basics
According to the National Association of State Budget Officers (NASBO), Louisiana’s total expenditures in fiscal year (FY) 2021 were $37.7 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2021 were $2.7 trillion, ranging from $4.7 billion in Wyoming to $512.8 billion in California.
Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.
Per the US Census Bureau, Louisiana’s combined state and local direct general expenditures were $44.4 billion in FY 2019 (the most recent year census data were available), or $9,526 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $10,161.
Louisiana’s largest spending areas per capita were public welfare ($2,715) and elementary and secondary education ($1,730). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.
Louisiana’s combined state and local general revenues were $45.3 billion in FY 2019, or $9,718 per capita. National per capita general revenues were $10,563. Louisiana uses all major state and local taxes. After federal transfers, Louisiana’s largest sources of per capita revenue were general sales taxes ($1,759) and charges ($1,365), such as state university tuition and highway tolls.
Governor John Bel Edwards, a Democrat, was elected in 2019 with 51 percent of the vote. The next gubernatorial election is in 2023.
Louisiana has a divided government. Republicans control both the House of Representatives (68 Republicans to 33 Democrats and 3 independents) and Senate (27 Republicans to 12 Democrats). The entire legislature is up for election in 2023 because both representatives and senators serve four-year terms.
Louisiana’s budget institutions, rules, and constraints
Louisiana uses an annual budget. The legislature must pass a balanced budget, but it can carry a deficit over into the following year. Louisiana limits both spending and revenue growth with binding rules so a legislative supermajority is required to override them. A supermajority is also required for any bill that increases taxes. The state also limits total authorized debt incurred by the state, but does not restrict debt service.
(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)
Louisiana’s current budget
Governor Edwards released his FY 2023 budget proposal in January 2022. He has not given his state of the state address.
Under the American Rescue Plan, Louisiana will receive $3 billion in direct state fiscal aid and $1.5 billion in local government aid from the federal government. As of January 2022, Louisiana had spent part of its ARP funds on refilling its unemployment insurance trust fund, capital construction, and economic development.
According to NASBO, Louisiana’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:
FY 2021: $10.1 billion/$37.7 billion
FY 2020: $9.6 billion/$31.1 billion
FY 2019: $9.8 billion/$29.4 billion
For more on Louisiana’s budget, see
Louisiana’s economic trends
Louisiana’s per capita income (per the Bureau of Economic Analysis) was $54,435 in 2021, ranking 40th among the states. It was below both the national average of $63,444 and the Southeast regional average of $56,118. The state’s median household income (five-year estimate) was $50,800 in 2020, ranking 47th among the states and below the national average of $64,994. Louisiana’s poverty rate was 18.6 percent in 2020 (five-year estimate), above the national rate of 12.8 percent.
Although Louisiana’s averages tell a story about the entire state, Louisiana is composed of diverse localities. For example, the city of Hammond’s median household income was $31,250, and its poverty rate was 37.5 percent; the city of Central’s median household income was $90,183, and its poverty rate was 5.3 percent.
Louisiana’s unemployment rate has historically been above the national average. The state’s unemployment rate particularly spiked following Hurricane Katrina, and in recent years it has been among the highest in the country. (See how COVID-19 is affecting state employment and earnings data.)
Unemployment rates (like other economic indicators) often vary significantly by race and ethnicity. In Louisiana, the average unemployment rate in 2021 was 3.9 percent for white residents, 9 percent for Black residents, and 6.5 percent for Hispanic or Latino residents. (This is preliminary data. See the 2020 data for a more detailed breakdown of state unemployment rates by race and ethnicity.)