And Now, The Bill EVERYONE Will Hate…

We bring you HB 523, sponsored by Reps. John Schroeder, Stuart Bishop, Franklin Foil, Brett Geymann, Lance Harris, Kenny Havard, Kevin Pearson, Dee Richard and Kirk Talbot.

What does HB 523 do? Well, let’s put it this way – if you’re a fan of dedicating revenue coming into the Louisiana treasury for specific purposes, this bill isn’t for you.

Among the sacred cows to be slaughtered if this passes…

“supplements to the salaries of law enforcement and fire protection officers, free school books, the minimum foundation program, the hospital stabilization formula, parish allocations of severance tax, and deposits into and expenditure out of certain funds including the Lottery Proceeds Fund, Hospital Stabilization Fund, Louisiana Medical Assistance Trust Fund, Louisiana Quality Education Support Fund, Education Excellence Fund, Health Excellence Fund, TOPS Fund, Louisiana Fund, Millennium Leverage Fund, Coastal Protection and Restoration Fund, Barrier Island Stabilization and Preservation Fund, Mineral Revenue Audit and Settlement Fund, Transportation Trust Fund, Parish Transportation Fund, Louisiana Investment Fund for Enhancement, Higher Education Louisiana Partnership Fund, the Atchafalaya Basin Conservation Fund, and Revenue Sharing Fund; to eliminate certain restrictions on budget deficit reductions; to prohibit the creation of certain statutory dedications; to provide for submission of the proposed amendment to the electors; to provide for an effective date; and to provide for related matters.”

That’s most of the dedicated funds.

The bill also raises cigarette taxes and eliminates the protection for the Minimum Foundation Program from the state’s ability to do a five percent across-the-board haircut to sweep money into the general fund in times of budget deficits; currently the MFP, which is a $3.6 billion fund paying for a large piece of public school district budgets in the state, is immune from that five percent sweep.

And then there’s this part…

Beginning on July 1, 2016, the legislature shall not create any special funds or accounts in the state treasury unless the source of monies in the dedicated fund are federal funds or funds from the collection of fees, licenses, permits, penalties, or interest earnings.

It doesn’t exactly ban future bills to establish dedications, because that could still be done if specific funding sources are tied to the dedications, but it would be a lot harder to make that happen in the future.

And in the future it funds the MFP on a year-by-year basis. Current law says there’s a formula for the MFP which basically locks in a raise each year, but this would make MFP’s money discretionary.

Plus, it puts the lottery proceeds into the state treasury, which would put to bed the fiction that all the lottery money would get poured into education. It was supposed to, but it never actually worked out that way.

There is no chance this bill passes, of course. What it does is start a discussion about the dedicated funds and how locking up all the state’s revenues destroys the ability to set priorities in the budget. At best, the bill might be whittled down during the legislative process to kill some of the dedications and change the way future dedication bills can be written.

But the hearings on the bill will be legendary, if it gets that far. Every special interest in the state would declare war on it – and the sponsors.



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