Two plaintiffs recently filed a lawsuit that attempts to defend the integrity of our state’s constitution. The issue is whether or not the Legislature can, by enacting a statute, circumvent the intent of our constitution. Any change to the constitution requires a two-thirds vote of both chambers of the Legislature, and then ballot approval by the voters.
Back in the 1990s, both the Legislature and the voters amended the constitution to create several fiscal reforms, including the creation of the Budget Stabilization Fund (BSF). The constitution dictates that 25 percent of any declared surplus must go into the BSF. Additionally excess mineral revenues (those exceeding $850 million) must go into the fund, according to the constitution, until the fund reaches its cap of 4 percent of state revenue receipts. In order to change the funding procedure for the BSF, the constitution would have to be amended (requiring a two-thirds vote of the Legislature and ballot approval by the voters).
At the very end of the legislative session of 2009, legislative leaders and the Jindal administration inserted language into a conference committee report for a statute that declared that when money is withdrawn from the BSF, it wouldn’t have to be repaid until the state general fund reaches the level it hit in 2008—a record year for state general fund revenues. The Jindal administration and some legislators are attempting to use that statute to avoid the constitutional requirement of placing the excess mineral revenue clearly available into the BSF. The 4 percent revenue cap has not been reached. That being the case, the action being taken by our state leaders is a direct affront to the constitution.
A constitutional amendment was filed in the recent legislative session that would have emasculated the BSF. It included, among other things, provisions that would have removed the requirement that the fund must be repaid when excess mineral revenues exceed the $850 million level and the fund is below the 4 percent cap. That amendment was adopted by the state Senate by a two-thirds vote but was not even close to having the two-thirds vote needed in the House. A compromise to the proposed constitutional amendment was unanimously adopted by the House in which the state would have been given up to three years to fill the BSF with the required amount of revenues. Senate leaders rejected that compromise. Instead they relied on the 2009 statute to trump the constitution.
Some officials and interest groups will criticize the lawsuit, since the state is in a fiscal crisis. They will claim that the “Rainy Day Fund” should be tapped any time the state wants or needs money. It is important to note that the proper name for the fund is the Budget Stabilization Fund—and the words “rainy day” cannot be found in the constitution. The fund’s purpose is to be a brake on spending volatile revenues for recurring expenditures, not primarily to be a piggy bank.
The plaintiffs who filed the lawsuit are to be commended. It is hard to conceive how any court that looks at the clear language of the state constitution and compares it to the 2009 statute can rule any way other than declaring that the statute cannot supercede the requirement to place the excess mineral revenues into the BSF up to the limit set forth by the constitution. If the Legislature can get away with using a statute to get around the constitution in this instance, the gate will be open for that to happen in many more instances in the future. Hopefully, our state courts will nip that abuse in the bud.