Policy group says nearly $1 billion shortfall could be handled with changes in Constitution

A public policy thinktank identified Constitutionally protected 28 special funds that could be restructured to provide nearly enough money to fill an expected $962 million funding gap in the state’s revenue stream.

Robert Scott, president of the Baton Rouge-based Public Affairs Research Council of Louisiana, doesn’t want to push for convening a convention to rewrite the state Constitution, as much as to provide a road map for what needs changing.

For instance, parts of the Constitution’s Article VII, which deals with finances, could be amended to provide lawmakers flexibility. This single article has grown from about 6,000 to about 31,000 words, near the length of the entire original 1974 document. The article’s limitations placed on the state’s fiscal framework is a regular target of criticism and represents another example of how the Louisiana way is different from most everywhere else.

“So many people talk in platitudes, so we looked at what we can do. What do we need to change?” Scott said about an analysis this 70-year-old organization funded by donors published earlier this week.

Specifically, nine funds should be moved entirely into statute, while seven can be eliminated because they are useless and unused. Meanwhile, six trust funds should be reestablished with more flexible spending options to give the Legislature the ability to modernize priorities in the state budget, Scott said.

Louisiana dedicates specific revenue streams in the Constitution that creates lock boxes of special funds with mandating spending mechanisms, he said. Some of the uses are good practices, others cause fiscal inefficiency and inflexibility.

PAR recommends strictly protecting six of the funds in the Constitution, including the Bond Security and Redemption Fund, which pays the state’s loan debts; the Budget Stabilization Fund, which provides money for rainy days; and the Transportation Trust Fund, which provides money to build roads and bridges.

Another class of funds take in money from specific sources, like the Health Excellence Fund and TOPS, but give legislators only marginal ability to spend investment earnings. A third class of funds should be reviewed periodically to determine if they are necessary. Currently, any changes to these funds, no matter how small the tweak, would require a constitutional amendment and a statewide … Continue Reading >>>

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