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.

Louisiana’s politics

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 and gave his state of the state address in March 2022. The FY 2023 budget was enacted in June 2022.

Louisiana enacted its FY 2022 budget in June 2021. The enacted budget included $38 billion in total spending.

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 Division of Administration: Restoring the Pride,
• Louisiana Transparency & Accountability,
• the Louisiana Legislative Fiscal Office, and
• the Louisiana House Fiscal Division.

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.)

The major industries that contributed the most to Louisiana’s gross domestic product (GDP) in 2020 were manufacturing, finance, government, professional services, and social services (i.e. health and education). Manufacturing contributed more to Louisiana’s GDP than it did to the nation’s and region’s GDP, while finance, government, professional services, and social services were less important to Louisiana than they were to the nation and region in 2020.

Looking at more specific industries, among those that accounted for at least one percent of Louisiana’s GDP in 2019, petroleum and coal manufacturing produced far more for the state than for the nation, contributing 8.1 percent to Louisiana’s GDP and 0.7 percent to the nation’s. Other industries that overperformed in Louisiana relative to national averages in 2019 were chemical manufacturing, oil and gas extraction, mining support, and retail.

Louisiana’s demographics

As of July 2020, Louisiana’s population was 4,645,319. That was up 2.2 percent from 2010. The state’s population growth rate was slower than than the nation’s 6.5 percent growth over the same period. The Urban Institute estimates the state’s population will increase 5.9 percent between 2010 and 2030, less than the nation’s estimated growth rate of 16 percent.

Additional resources

• The State and Local Finance Initiative’s Backgrounders explain the tax and spending issues highlighted in these briefs.
• The State Economic Monitor presents updated data and customized visualizations of state economic indicators.
• State and Local Finance Data: Exploring the Census of Governments allow users to sort, customize, and download the Census of Governments State and Local Finance series data featured in these summaries.
• The State Tax and Economic Review series provides quarterly reports on state tax collections and underlying economic trends in all 50 states.
• The Urban Institute’s State Tax Data Subscriptions provide access to up-to-date revenue data in all 50 states.