While Louisiana is expected to have tens of millions of extra cash after ending its fiscal year with a $595 million surplus, lawmakers are constitutionally restricted on how they can spend it, Louisiana Illuminator reports.
According to the state constitution, Gov. Jeff Landry and lawmakers have to use half of any surplus for state reserves to pay down public retirement debt.
The rest can go toward one-time building projects, coastal restoration, roads, bridges and other transportation needs, but it cannot be used to deal with Louisiana’s looming budget deficit nor can it be allocated for teachers.
“Surplus funds cannot be used for recurring budgetary operational expenses or requirements and therefore, cannot be used toward solving the upcoming FY25-26 budget shortfall,” Commissioner of Administration Taylor Barras wrote to legislators in a letter last week.
The $595 million is left over from the state’s fiscal cycle that ended June 30—the last budget plan put together by Gov. John Bel Edwards and the former Legislature.
Louisiana faces a financial shortfall of at least $587 million next year primarily because of automatic tax cuts scheduled to take effect next year.
