Louisiana House Bill HB535

Louisiana 2013 Regular Session

• Introduced: 4/8/13
• Refer: 4/8/13

Caption

(Constitutional Amendment) Limits appropriations from the state general fund and creates the Working Cash Stabilization Fund (OR -$174,400,000 GF RV See Note)

Impact

The creation of the Working Cash Stabilization Fund is intended to enhance fiscal responsibility within the state's budgeting process, ensuring that appropriations are aligned more closely with actual revenue forecasts. This measure aims to prevent overspending that could lead to budget deficits, thereby promoting a more sustainable financial posture for Louisiana. By controlling appropriations in line with a realistic assessment of available revenue, the bill seeks to safeguard the state's financial health and improve accountability in fiscal management.

Summary

House Bill 535 proposes a constitutional amendment to establish the Working Cash Stabilization Fund in Louisiana. Starting from the fiscal year 2015-2016, the state treasurer would be required to deposit 2% of estimated state general fund revenues into this fund. The primary purpose of the fund is to provide a financial buffer that can be utilized in case of budget shortfalls, allowing for the stabilization of state finances in challenging economic times. The bill also stipulates that total appropriations from the state general fund shall not exceed 98% of the estimated revenues as confirmed by the Revenue Estimating Conference.

Sentiment

The legislative discourse surrounding HB 535 was generally supportive, reflecting a consensus on the need for more robust fiscal measures. However, concerns were raised about the limitations that such a fund might impose on state spending. While proponents view the bill as a necessary step towards fiscal responsibility, critics argue that strict limits on appropriations could hinder the state's ability to respond to urgent needs and emergencies that may require swift financial action, thereby creating a potential conflict between sound budgeting and responsive governance.

Contention

A notable point of contention in the discussions was the balance between ensuring fiscal discipline and maintaining enough flexibility within the budget to address unforeseen expenses. Some legislators argued against the constitutional amendment, suggesting that it could lead to missed opportunities for funding vital programs and services in times of need. Overall, the debate highlighted the challenge of establishing a budgetary framework that promotes fiscal stability while allowing for responsive governance in times of crisis.