The Louisiana Legislature started its annual session with record amounts of revenue to divide among the state’s many needs. Lawmakers have more than $3.6 billion in windfall revenue on hand that includes surplus dollars from last year, leftover pandemic relief dollars and “excess” tax revenue in the current year that can be spent with few restrictions.
Legislators have directed much of this money to projects that will serve Louisiana for generations: road and bridge repairs and construction, water system upgrades, coastal projects and overdue maintenance and upgrades on college campuses. Lawmakers also made new investments in early childhood education, gave teachers a modest pay raise and repaid the federal government for expenses incurred after the 2005 hurricanes.
But legislators also used $500 million to bail out the state’s unemployment insurance trust fund, and steered millions of dollars to pet projects in their districts. And in so doing, they missed a rare opportunity to give back some of the windfall revenue to families that need help. Instead of bailing out corporations, lawmakers should follow the lead of a dozen states that are using excess revenues to provide one-time payments to ordinary citizens.
Inflation is soaring
Like families across the country, Louisianans are paying more than ever for basic necessities like groceries, gasoline and rent. The annual inflation rate hit 8.5% in March – the highest it’s been in more than 40 years – driven in part by higher prices for food (8.8%) and energy (32%).
While the cost of living is rising, the federal pandemic relief programs that helped millions of Americans weather the economic downturn have expired. The expanded federal Child Tax Credit and the expansion of the Earned Income Tax Credit expired in December, throwing millions of Americans back into poverty just as inflation began to peak.
At the start of the legislative session, the Louisiana Budget Project joined with other community organizations and advocates to invest in a Recovery Agenda for Louisiana. The Recovery Agenda called for new investments in affordable housing, worker training, weatherization assistance, student loan forgiveness and other programs aimed at lifting up low-income families and communities.
If lawmakers aren’t interested in using public funds to solve those problems, then the least they could do is give back some of these excess tax revenues to working families who are most impacted by inflated consumer costs. Other states are doing exactly that, providing a model that Louisiana should emulate.
Many states are using surpluses to boost family incomes
Twelve states have already sent, or are preparing to send, their residents a share of excess or surplus revenues. While each state’s plan differs, most of them are distributing money to people and families who have filed state income tax returns, though New Mexico has also created a program specifically for low-income families who may not ordinarily file tax returns.
Most of these refunds, rebates, or credits will provide relatively small amounts. But at a time when many families are paying more for rent, food, and fuel, anything can help, especially if Louisiana’s neediest families are prioritized.
The rebate program created by Hawaii is particularly worth attention, as it targets assistance to lower-income residents and adds support to families with children or other dependents. Louisiana could also borrow a lesson from Connecticut, which is providing a one-time state child tax credit of a few hundred dollars per child.
Working families could use the help
The budget bills that are pending final passage on the Senate floor include vital long-term investments that, in many cases, are long overdue. But many Louisiana families need help now. The Legislature missed a chance to prioritize families who lost a financial lifeline when the relief programs supported by the American Rescue Plan expired. Considering the scale of the problems facing our state and its people, that should be unacceptable to all of us.
The least lawmakers could do is send some relief to working people and families.
– Jackson Voss, Policy Analyst