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Tax revenues still above prepandemic collections

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(The Center Square) – Decreased tax revenues are still 19% above prepandemic collections, Louisiana officials said Thursday.

Ben Vincent, an economist with the Legislative Fiscal Office, briefed the committee on the state’s revenue situation as the Senate prepares to tackle the state’s budget.

Lawmakers are planning to spend nearly $48 billion this year, down from the more than $52 billion appropriated for fiscal 2024. The state’s General Fund spending is planned to be at nearly $12 billion, down from $12.2 billion in this fiscal year.

He said while the state’s revenues are up compared to prepandemic forecasts, the state’s revenues are coming down after a post-pandemic peak in fiscal 2023. He said his office predicts that the estimates for the state’s personal income and sales taxes will be up slightly over the December estimate.

One of those areas that he predicts increases is with severance taxes, especially those assessed on natural gas production, which Vincent said were “driven by kind of eye-popping collections.”

This fiscal year, the state is predicted to take in $15.5 billion in taxes and fees and $15.6 billion in the new fiscal year that starts on July 1.

Officials predicted in December that the state would take in $4.3 billion in sales tax revenue in the upcoming fiscal year, down from $4.45 billion this year. The state’s personal income tax revenues are expected to shrink from $4.65 billion to $4.53 billion. Gasoline tax revenues are expected to drop slightly from $598.4 million to $596.6 million.

The state has $89 million in additional revenues to allocate in the upcoming year before the so-called fiscal cliff hits in fiscal 2026.

Due to some expiring revenue sources such as the 0.45 cent sales tax, the state will have deficits of $558 million in 2026 and $733 million by fiscal 2028. In January, Gov. Jeff Landry issued an executive order designed to cut spending among state agencies.

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