Louisiana ran a $534.8 million surplus during the fiscal year that ended June 30, state officials said Friday.
Gov. John Bel Edwards’ administration previously had said the surplus would be in the neighborhood of $500 million. Commissioner of Administration Jay Dardenne presented the more precise number Friday to the Joint Legislative Committee on the Budget.
The state constitution limits how surplus dollars can be spent.
It mandates 25 percent of the total must go to the state’s “rainy day” fund; with the new infusion, the fund’s balance will rise to about $538 million.
Another 10 percent must be used to pay down retirement debt. The remaining $348 million can only be spent on one-time expenses, such as construction or coastal restoration projects, and cannot be used for regular government operating expenses.
Dardenne attributed the surplus to personal and corporate income tax collections coming in higher than was anticipated. That’s due in large part to changes in federal income tax rates. Louisiana allows taxpayers to deduct their federal income tax from their state taxes, so when federal rates fall, state collections increase.
The Revenue Estimating Conference also has been more conservative in its projections recently, Dardenne said.
State Sen. J.P. Morrell, D-New Orleans, told lawmakers who will be returning for the next term that while the state has reformed, capped or eliminated some of its many tax breaks, many others remain uncapped.
Only about 10 percent of the state’s tax credit programs are limited by statute.
“We still have tremendous land mines of uncapped tax credit programs that on a banner year could run the table and dissolve the surplus pretty easily,” he said.