Louisiana House Bill HB392

Louisiana 2012 Regular Session

• Introduced: 3/12/12
• Refer: 3/12/12

Caption

(Constitutional Amendment) Provides relative to deposits into the Budget Stabilization Fund

Impact

The proposed amendment would significantly impact state financial regulations by altering how surplus funds are managed. Under the current constitution, deposits into the Budget Stabilization Fund are restricted once a certain cap—set at four percent of total state revenue receipts—is reached. HB392 seeks to amend this restriction, allowing for investment earnings to be continually added to the fund, even if the existing balance exceeds this cap. Such changes could enhance the fund's stability and availability during fiscal emergencies, promoting a more robust financial strategy for the state.

Summary

House Bill 392, introduced by Representative Jim Morris, proposes a constitutional amendment aimed at clarifying the rules regarding deposits into Louisiana's Budget Stabilization Fund. This fund is designed to act as a financial cushion during economic downturns by holding surplus state revenues. The bill specifies that funds are to be deposited into the Budget Stabilization Fund when the state’s expenditure limit is either increased or decreased. This provision aims to ensure that surplus funds are utilized effectively in maintaining fiscal stability for the state budget.

Sentiment

The sentiment surrounding HB392 is generally supportive among fiscal conservatives and those advocating for stronger financial safeguards within state governance. Proponents argue that ensuring the ongoing accumulation of investment earnings will fortify the fund's reserves, allowing Louisiana to better withstand economic fluctuations. However, there may be concerns from fiscal analysts regarding the implications of elevating the fund's cap, with opponents highlighting the importance of maintaining checks and balances on state funding and expenditures.

Contention

Notable points of contention regarding this bill include the potential for over-reliance on the Budget Stabilization Fund during budgetary planning. Critics may argue that freeing up funds for continuous deposit into the budget stabilization may reduce the urgency for effective revenue generation and fiscal discipline. The discussions surrounding the bill also emphasize the delicate balance between ensuring fiscal preparedness and adhering to sound financial principles, which will likely be a focal point during legislative deliberations.