That would be the first, which
deals with the Budget
Stabilization Fund, the savings account of the state. In essence, bonus
revenues, both those in excess of the state’s constitutionally-determined expenditure
limit and including a quarter of all nonrecurring monies, that accrue to the
state, mineral proceeds above the base level, and whatever else the state
wishes to throw in, up to a maximum balance of four percent of the state’s
budgeted revenues at the time get chunked into the BSF. The base level, which
may be readjusted at minimum every ten years, recently became $950 million,
with the BSF holding $517 million and its ceiling currently set at $811
million. Money removed must be filled at the next available opportunity.
Amendment #1 would divide the BSF
into two sub-funds, its original one and a new Transportation Stabilization
Subfund. Each would be capped at $500 million, with the new one to have money
flow to it from excess mineral revenues after the new Budget Stabilization
Subfund. It also would delay at least a year any refilling of the new BSS, with
the same applying it would appear to the new TSS, and the base level could be
raised after five years (monies in excess of the base level and subject to the delay
could be spent on operating expenses). The TSS could have proceeds spent generally
on transportation projects, although some would be dedicated.
This commits a multitude of sins,
the foremost being it perverts the intention of the BSF, where a third of it
may be drawn out to assist in operating expenses when state revenue sources are
lower than in the previous fiscal year. That would limit the BSF to at most a
$166.6 million contribution, an amount that does not grow as does the budget.
This reduced level prevents thriftier planning in times of plenty or when
bonuses come that could help more when needed in the future. Instead, it
becomes just another dedication that already has close to 85 percent of the
state’s budget locked into certain expenditures, creating inflexibility that
causes cuts to needier programs than often get funded.
As such, this amendment merely sets
up a raid on the BSF that may cause credit rating agencies to rate Louisiana
debt less confidently, which in turn would increase borrowing costs. There
already exists a Transportation
Trust Fund that supplies money for roads from fuel taxes, but a portion of
that can be spent on operating costs of the state police and also goes to
parishes. Instead of corrupting the intent of the BSF, if legislators want more
money for state road needs, they could amend out the parish allocation and/or
not siphon any of the balance to the state police. Further, help is on the way
as beginning in
fiscal year 2017 motor vehicle fees collected up to $97.9 million a year
will flow into the TTF (as long as there has been an increase in all mineral
revenues from the previous fiscal year).
Thus, to protect the integrity of
the BSF, Amendment #1 needs defeating. So does Amendment #2, which funds a
state-run infrastructure bank from which local governments could borrow money
to finance transportation deals. The Legislature can fund it optionally, and up
to $2.1 million of the money from motor vehicle fees can go in it starting in
two years. This amendment would give the state treasurer the option of using
free cash as capital for lending to local governments, instead of investing
these balances in other ways, such as on equities or other kinds of debt
instruments.
However, this not only presents
problems in that a substantial sum would have to accrue for it realistically to
lend and also would cost a small amount operationally, but also allows politics
to creep into the capitalization process. An elected official would decide
whether to fund it, without any other oversight, and there’s no guarantee that
those decisions would not occur more on criteria such as favoritism or
progressive ambition than on sound investment practice.
By contrast, the relatively
innocuous Amendments #3 and #4 can pass without real damage to the public weal.
The former changes the definition slightly of what constitutes a “fiscal” bill,
broadening that to include measures involving tax administration, instead of a
more restrictive current list. This matters as every other (even-numbered)
year, only five “general” bills per lawmaker may be considered in a session of
the Legislature, so this would have the impact of allowing more of those kinds
of bills in those sessions.
For the latter, it concerns a
passage in the Constitution that says “public” lands or properties are not
subject to property taxation. A recent appellate court decision went against
decades of Louisiana Supreme Court guidance on the subject to expand this
meaning to out-of-state governments, and the amendment would make specific the
exemption applies only to Louisiana governments.
While my colleagues at the Baton Rouge Advocate advocate
that the amendment deserves defeat in order to let the courts sort it all out,
policy-making should be left in the hands of the people and their elected
legislators, not decided by courts. Further, the clarification seems in the
public interest, so as on #3 a vote should be registered in favor of #4 as
well.
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