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Louisiana might have met thresholds that would trigger an across-the-board personal income tax cut at the beginning of 2026, Louisiana Illuminator reports.
The catch—the tax cut would worsen the state’s budget crisis over the next few years.
Gov. Jeff Landry’s administration said Wednesday that the projected state budget deficit for next fiscal year could grow another $100 million to $200 million if income tax rates automatically lower as a 2021 state law requires.
The income tax rate reductions would bring the state’s estimated financial shortfall from $587 million next year to as much as $787 million, according to the state revenue department.
State budget holes would also deepen for years to come. Starting July 1, 2026, the impact of the income tax reduction would be a loss of $200 million to $400 million in state revenue per year. It would bring the projected budget shortfall for fiscal year 2027-28 to more than $1 billion.
Though the income tax cut might come to fruition, it isn’t a certainty yet.
