Louisiana Legislature agrees to raise spending cap, freeing up more money for lawmakers to spend

The Louisiana House voted 85-19 Wednesday to lift the state spending cap by a total of $1.65 billion, ending months of speculation over whether a group of conservative legislators could block more than a billion dollars in additional government spending over the next 13 months. 

“To achieve great things, two things are needed: a plan and not quite enough time,” House Appropriations Committee Chairman Jerome Zeringue, R-Houma, said as he rallied to colleagues to bust through the spending threshold.  

Gov. John Bel Edwards and Senate leadership were able to lure enough House Republicans to go along with busting the cap — in part by promising a significant portion of the state’s extra funding would go toward transportation needs, hospitals, college campuses and other projects in those lawmakers’ districts. 

The 19 conservatives who voted against raising the cap are likely to see funding to their areas slashed as retribution. 

Edwards and Senate President Page Cortez, R-Lafayette, pressured House members over several weeks to raise the spending threshold so they could take immediate advantage of an unexpected $2.2 billion the state is expected to generate.

House members initially resisted that plan, saying they wanted to put most of that extra money in savings accounts for future use and toward paying down debt — a move that might not have required legislators to vote to lift the spending cap at all. 

Some House conservatives were also interested in holding onto the money until at least next year, when they expect the current Democratic governor to be replaced by a more conservative Republican one. Others wanted the money saved for 2025, when significant tax cuts are predicted to create a state budget shortfall.

But Edwards, who leaves office in January, and the senators, many of whom are also retiring, were not interested in leaving Louisiana’s current largesse for a new governor and future legislators to use. 

“They will not be here next year and in the following years to deal with the shortfall we are facing,” said Rep. Larry Frieman, R-Abita Springs, in trying to convince his House colleagues to vote against the spending cap. “Do you want to raise taxes? That’s what we will be facing in the years to come.”

Instead, they’ve proposed putting money unlocked by the spending cap vote toward transportation projects (more than $666.2 million), hospitals ($311.3 million), deferred maintenance on college campuses ($25 million), a popular roof fortification program ($40 million) and water and sewage system upgrades ($80 million), among other items. 

Lawmakers have also prioritized $137.4 million of their own pet projects for these extra dollars as well as construction projects for sheriffs, school boards, politically-connected nonprofits and local governments that could help them with their reelection efforts later this year.

The House conservatives’ push to restrain government spending started to falter last month when state budget analysts became skeptical Louisiana could both raise public school teacher pay and keep the state’s construction budget flush without raising the spending cap.

Things worsened for the conservatives this week as more House members discovered what construction projects and other funding for their home parishes and communities would be threatened if they didn’t vote for the cap to be lifted. 

But even if the spending cap vote didn’t go their way, House conservatives said they were able to score some more minor victories in budget negotiations.

The legislature seems poised to put hundreds of millions of dollars in additional funding toward paying off state employee and public school teacher retirement debt this year — a nod toward what the fiscal conservatives had originally proposed.

The Senate has also gotten behind Mandeville Rep. Richard Nelson’s constitutional amendment to put more of the state’s budget surplus funding toward retirement debt in the future. That contribution would grow from 10% to 25% under his proposal. 

“The conversation about debt payments, budget growth rate and planning for future shortfalls were definitely more in consideration than would have been in our absence,” said Rep. Brett Geymann, R-Lake Charles, one of the leaders of the fiscal conservatives. 

Legislators are still working to finalize their budget plan now that they’ve moved past the spending cap standoff. One remaining sticking point is how much money will go toward early childhood education programs, which some lawmakers feel are still underfunded.

Lawmakers must reach a consensus on their spending proposal by Thursday evening, when the current legislative session is scheduled to end.