Louisiana House Bill HB656

Louisiana 2025 Regular Session

• Introduced: 4/23/25
• Refer: 4/24/25
• Refer: 5/13/25
• Refer: 5/14/25

Caption

Repeals the reduction in the state sales and use tax rate and dedicates a portion of the avails of the state sales tax to fund teacher pay raises (EG -$276,800,000 GF RV See Note)

Impact

The proposed law is expected to have a significant impact on the state's teacher compensation structure. By creating the Teacher Compensation Fund and ensuring a steady stream of financial support through the designated sales tax revenue, the bill aims to facilitate consistent salary increases for educators. Moreover, it specifically points toward a planned $2,000 pay raise for teachers and a $1,000 raise for educational support staff, which advocates hope will enhance retention and recruitment in the education sector amid ongoing concerns regarding teacher salaries in Louisiana.

Summary

House Bill 656 is designed to repeal an impending reduction in the state sales tax rate set for 2030 and instead dedicate a portion of the revenue generated from this tax to the establishment of the Teacher Compensation Fund. Specifically, the bill aims to maintain the current sales tax rate of 1% and allocate 0.25% of the avails collected from this tax to support pay raises for teachers. This initiative reflects a legislative effort to address teacher compensation amidst discussions on educational funding and fiscal responsibility within the state treasury.

Sentiment

General sentiment around HB 656 appears to be supportive, particularly among educational advocates and teacher organizations that view the measure as a critical step toward improving teacher pay. However, there may be concerns regarding the long-term sustainability of this funding source and how it will impact the state's overall budget. Critics may argue that maintaining a higher sales tax could hinder economic growth or disproportionately affect low-income families who are more sensitive to sales tax increases.

Contention

Notable points of contention surrounding HB 656 may center on the implications of permanently maintaining the 1% sales tax rate without any reduction. While proponents advocate for the benefits of increased educational funding, opponents might raise concerns about the effectiveness of a sales tax-dependent funding model, arguing that it may not provide a stable or equitable revenue source. Furthermore, discussions may arise regarding the distribution of funds and whether additional measures are needed to ensure fair compensation across different educational roles.