Louisiana legislators’ plan to draw millions from a special state fund to pay for local projects and other initiatives without funding a stipend for teachers or expanding a school voucher program has drawn backlash both sides of the aisle, with government policy think tanks questioning lawmakers’ priorities.

The state’s latest set of budget bills, which could still be amended as legislators enter their final days of session, would divvy up $800 million from the Revenue Stabilization Fund for infrastructure upgrades, state economic development initiatives, regional law enforcement agencies, local governments and some nonprofits and other private organizations.

Legislative leaders say it is smartest to spend money from the reserve fund on one-time expenses. They contend the many initiatives added to the budget will make a huge difference to local communities and strengthen the whole state.

But critics from various policy groups have argued that, if lawmakers can back those investments, they should be able come up with $43.5 million to expand LA GATOR, a program that gives taxpayer dollars to families to pay for private school.

And, they argued, the Legislature should be able to set aside $200 million to renew stipends for teachers and school support staff so that those workers do not make $2,000 and $1,000 less, respectively, next year.

The latest budget proposal also has reignited debate over what critics call “pork” – “pet projects” that receive funding at the request of individual lawmakers without going through a formal vetting process.

The Revenue Stabilization Fund is made up of corporate overflow tax revenue that accrues when annual collections exceed a certain threshold. Corporate tax revenue can be volatile, and the fund’s growth is expected to stagnate in the coming years after legislators passed bills in 2024 that cut corporate taxes.

The Revenue Stabilization Fund has about $3.9 billion in it, according to state Rep. Jack McFarland, R-Jonesboro, who plays a key role in drawing up the state budget as chair of the House Appropriations Committee.

Top budget officials say it would be irresponsible to put money from the Revenue Stabilization Fund toward recurring expenses like investments in education. In general, putting temporary money toward one-time expenses can create so-called “fiscal cliffs” – budget holes that arise when funding dries up.

The Legislature never committed to a long-term funding source that would turn the teacher stipends into permanent pay raises, but they have given those stipends to teachers three years in a row.

Budget conundrums

The Legislature’s budget woes began earlier this month when state economists forecasted that Louisiana would collect less revenue than previously expected. As a result, officials had to trim the budget for the coming fiscal year, which starts July 1, by about $100 million.

Then, on May 16, a constitutional amendment that would have liquidated state education trust funds to make teacher pay raises permanent failed at the ballot box. To extend the stipends, lawmakers would need to allocate $200 million next year.

Top legislators spent hours in budget negotiations last week. Those talks culminated in a set of Senate amendments that did not include money for teacher pay raises.

“If they can find $800 million for local projects, for corporate incentives and other construction needs, then certainly they can find money to keep teachers from taking a pay cut in this economy,” said Jan Moller, director of Invest in Louisiana, a Baton Rouge-based progressive think tank.

The Revenue Stabilization Fund should not be a long-term solution, but it could buy legislators time until they reconvene, Moller said.

McFarland said lawmakers are committed to finding a way to give teachers permanent pay raises but declined to offer details about when that might happen. Senate President Cameron Henry has said he wants the Legislature to take up the matter in 2027.

Meanwhile, a Senate amendment that cut out new funds for LA GATOR is drawing backlash from some conservatives.

“The repeated state funding of local pet projects and non-governmental organizations at alarming levels – as critical state needs like LA GATOR remain unmet – demonstrates ‘business as usual’ at a time when lawmakers should be fulfilling their pledge to enact positive change and take Louisiana in a new, more prosperous direction,” said Erin Bendily, Senior Vice President of the Pelican Institute, an influential right-leaning think tank that has been a major proponent of LA GATOR.

Gov. Jeff Landry proposed doubling the size of the program, which would cost another 43.5 million. Henry has long been skeptical of the GATOR program and said earlier this year that it would be irresponsible to expand it.

‘Pet projects’

Under the current budget proposal, about $81 million of the $800 million from the Revenue Stabilization Fund would be directed to an account that has been dubbed the Strategic Investments Across Louisiana Fund.

House Bill 1, a key budget bill, shows how the $81 million money would be spent.

The allocations vary greatly in size and have been set aside for a range of public and private entities, from organizations like Keep Louisiana Clean, which aims to reduce littering and would receive $500,000, to Visitation of Our Lady School in Marrero, an all-girls Catholic school that would receive $50,000 to pay off debt on its gymnasium.

Some of the bigger ticket items include $2.2 million for a training center at the Franklin Parish Sheriff’s Office, $800,000 for the YWCA of Greater Baton Rouge and $1.5 million for renovations at the Northeast Louisiana Children’s Museum in Monroe.

A large chunk of the money is dedicated to helping out local municipalities.

House Bill 312, which expands the budget for the current year, gives millions more to pet projects.

The House set aside about $70 million for amendments requested by legislators, but about $20 million is for statewide initiatives, McFarland said. The Senate added member-driven amendments worth millions more.

For years, outside groups and even some officials have questioned whether doling out money to individual lawmakers’ wish-lists is the smartest way to spend state funds.

Steven Procopio, policy director of the Public Affairs Research Council of Louisiana, a non-partisan good government group, said spending on pet projects is “driven more by politics than they are by the overall needs of the state.”

State Treasurer John Fleming, who in 2024 tried to get lawmakers to submit forms indicating which amendments they requested, also cast doubt on pet project spending.

“There’s a lot of risk for mis-expenditures. There’s a lot of risk for inside dealing, especially when it comes to [non-governmental organizations],” Fleming said.

If lawmakers were more “analytical” about spending and stopped “playing politics” to get money for their districts, Fleming added, “we could deploy that money for better roads and highways and better teacher pay.”

“Of course he (said that), he’s running for Congress,” McFarland said when asked to respond to Fleming’s statement. He was referring to Fleming’s ongoing campaign for U.S. Senate.

McFarland argued the allocations go toward critical local projects, and that the state has done a better job of scrutinizing funding for NGOs in recent years. Those, too, can be vital, McFarland said, noting state funds have gone to everything from cancer centers to organizations that fight food insecurity.

Moller, of Invest in Louisiana, also defended the practice.

“As a basic matter I don’t think there’s anything wrong with legislators taking money back to their districts for needs in those communities,” Moller said. “They know those communities the best. That’s why they’re there.”