Louisiana and the State Budget Crisis

Louisiana and the State Budget Crisis

Louisiana continues to have the highest average combined state and local sales tax rate, coming in at a whopping 9.98 percent.  In order to avoid a $1 billion deficit next summer, it's likely that political leaders and lawmakers will have to keep the state's already high sales tax rate steady, as they continue to meet regarding the state's budget and tax negotiations.

Plan for Consensus

The hope is that the state legislature will reach a consensus by the start of the 2018 year, and House Speaker Taylor Barras has plans to meet with Governor John Bel Edwards later this month to discuss options.  Many, however, are not as optimistic.  According to Senator JP Morrell,"There is no tax solution. No one has suggested anything we haven't already tried,..." 

A Budget Crisis

Given the state's budget crisis, Louisiana must cut $1 billion in spending from its $28 billion budget.  The concern is that a budget cut of that magnitude could effectively shut down public universities, close public hospitals, and halt some road and bridge projects.

And because lawmakers refused to make the necessary cuts in 2016, the same concerns have resurfaced again this fiscal year, only this time, the Governor is predicted to threaten to cut the popular TOPS college scholarship program and services for disabled people.

More information about whether Louisiana will keep the highest-in-the-country sales tax can be found here.