BATON ROUGE, La. (Louisiana First) -- The Louisiana Legislature must decide what will truly be a priority in the budget this year after voters rejected Amendment 2 in the March 29 election. With reductions already being made in the governor’s proposed budget to deal with a $194-million shortfa ll, there are questions on if the teacher pay stipend will be put back in. If it is, where will the money come from? Related: Gov. Jeff Landry, Louisiana officials react after amendments fail Voters reject amendment with tax and budget changes Amendment 2, born out of a two-week tax session in November 2024, was a lengthy bill that encapsulated many aspects of tax reform for the state. If approved, the amendment would have: Lowered the maximum state income tax rate. Increased tax deductions for residents over 65. Limited government spending growth and change how certain state funds operate. Required a portion of the state’s budget surpluses to address teacher retirement debt, potentially increasing teacher salaries. Kept property tax exemptions, including the homestead exemption and religious organization exemptions, unchanged. There were plans to consolidate some of the state funds and pay down teacher retirement debt. That debt pay down would lead to districts having a savings to put towards a permanent raise of $2,000 for teachers and $1,000 for support staff that was put into place last year. Teachers and staff face a pay cut after the amendment failed to pass. “Those were conversations that are being had [Monday] and will be had this week as far as the direction that we go in,” said state Rep. Julie Emerson, R-Carencro. “You know, we will have to take money from somewhere else to put it on that. I think the question is going to be where would you take that from and would a majority of the legislature be willing to do that?”  During the tax reform session, the legislature approved reducing the state income tax to a flat 3% rate for all. That hit to the budget was made up in part to raising the state sales tax to 5% and diverting funds from the construction mega projects account that takes from the vehicle sales tax revenue. Louisiana lawmakers to explore options It would cost the state $198 million to cover the cost of the stipend in the budget. House Appropriations Chairman Rep. Jack McFarland, R-Jonesboro, said there are discussions being had about the priorities in the budget and where the money could be taken from. He said he believes they can make it work, but have to determine as a body how to make up the funds. McFarland said he has spoken to constituents who said they liked some of Amendment 2 but not other parts, which led them to vote against it. He said there is a possibility of piecemealing the amendment through several bills to send back to the voters. In two years, if the temporary pause of the construction funds diversion is lifted, the state faces a $568 million shortfall, McFarland said. The gap will only continue to grow if they don’t find a consistent revenue stream to help keep the budget balanced without hefty cuts. Emerson, who carried the bill for Amendment 2, said she doesn't want to abandon the ideas of doubling the standard deductions for seniors, phasing out the inventory tax, and opening up the funds in the Revenue Stabilization Fund. “With the Revenue Stabilization Fund that we were trying to combine with the Rainy Day Fund, that fund has recurring revenue that's continuously being dumped into it year after year after year, and we can only utilize it and unlock it for certain items,” Emerson said. McFarland said some of the revenue possibilities that did not pass in the special tax session, such as increasing the number of goods and services that fall under the sales tax, could be back on the table. It will be up to legislators to determine what they have the appetite for. Louisiana Democrats name new executive director after months-long search With voters riled up at the level seen in this usually sleepy spring election, there will be a lot of eyes on what they decide to do. Some changes that require altering the state constitution will have to be put back on the ballot. “I would just really encourage you, don't make any judgments ahead of time. I want to get feedback from people. If you did oppose this and you did have issues, please email us. Please contact us. Please come to the Capitol,” Emerson said. What's next? The 2025 Louisiana Legislative session begins on April 14. Since it is a fiscal year in the legislature’s calendar, they will be able to consider tax-related legislation. Lawmakers have until April 4 to prefile constitutional amendments for the session. Latest News Trump highlights Friedman, Grenell as possible UN ambassadors to replace Stefanik House Intel Democrats call for damage assessment on Signal chat Trump says he expects Musk to eventually return to running companies Livingston Parish alleged gang members arrested after Bogalusa shooting, drug bust Trump welcomes idea of hypothetical run against Obama as he floats third term ...read more read less