HLS 171ES-34 ENGROSSED
2017 First Extraordinary Session
HOUSE CONCURRENT RESOL UTION NO. 2
BY REPRESENTATIVES MCFARLAND AND ABRAHAM
FUNDS/FUNDING: Provides for monies in the Budget Stabilization Fund to be available
for appropriation in Fiscal Year 2016-2017 (Item #4)
1 A CONCURRENT RESOL UTION
2To make available for appropriation from the Budget Stabilization Fund the sum of
3 $74,645,508, due to the reduction of the Fiscal Year 2016-2017 official forecast in
4 the amount of $340.5 Million as adopted by the Revenue Estimating Conference at
5 its meeting on January 13, 2017, resulting in the second mid-year deficit for the
6 current fiscal year, and presented to and recognized by the Joint Legislative
7 Committee on the Budget at its meeting on January 27, 2017.
8 WHEREAS, during the current fiscal year, it was determined that the state of
9Louisiana ended Fiscal Year 2015-2016 with a deficit of $313.8 Million (Fiscal Year 2016
10Deficit); and
11 WHEREAS, Article VII, Section 10(G) of the Constitution of Louisiana provides that
12if a deficit exists in any fund at the end of a fiscal year, that deficit shall be eliminated no
13later than the end of the next fiscal year; and
14 WHEREAS, the governor presented a deficit reduction plan to the Joint Legislative
15Committee on the Budget on December 15, 2016, that addressed and eliminated the Fiscal
16Year 2016 Deficit of $313.8 Million through a combination of budget reductions contained
17in Executive Order JBE 16-74 and adjustments approved by the Joint Legislative Committee
18on the Budget; and
19 WHEREAS, additionally, during the current Fiscal Year 2016-2017, the state of
20Louisiana has experienced a severe financial crisis due to many factors, including declining
21revenues attributable to decreased collections of corporate income and franchise tax,
Page 1 of 4 HLS 171ES-34 ENGROSSED
HCR NO. 2
1individual income tax, and sales and use tax, causing corresponding decreases in the amount
2of $340.5 Million in the official forecast of the Revenue Estimating Conference for Fiscal
3Year 2016-2017; and
4 WHEREAS, Article VII, Section 10.3 of the Constitution of Louisiana establishes
5the Budget Stabilization Fund in the state treasury and in Subparagraph (C)(2) thereof
6provides that if a deficit for the current fiscal year is projected due to a decrease in the
7official forecast, an amount equal to one-third of the fund not to exceed the projected deficit
8may be appropriated after the consent of two-thirds of the elected members of each house
9of the legislature; and
10 WHEREAS, R.S. 39:95 provides that the state treasurer shall report the balance of
11the Budget Stabilization Fund as of July first of each fiscal year to the Revenue Estimating
12Conference, which shall certify the Budget Stabilization Fund balance and the determination
13of one-third of the balance; and
14 WHEREAS, the balance in the Budget Stabilization Fund as of July 1, 2016, was
15$358,982,171, and one-third of such balance as certified by the Revenue Estimating
16Conference is $119,660,723, which is the maximum amount of the Budget Stabilization
17Fund available for appropriation for Fiscal Year 2016-2017 to address a projected deficit;
18and
19 WHEREAS, subsequent to obtaining the consent of two-thirds of the elected
20members of each house of the legislature for the use of $74,645,508 from the Budget
21Stabilization Fund, the legislature shall appropriate such amount for use in Fiscal Year
222016-2017; and
23 WHEREAS, in addition to the decline in the official forecast, due to the state of
24emergency caused by heavy rain and flooding, the state has also experienced expenditure
25shortfalls in the current fiscal year which total over $30 Million; and
26 WHEREAS, the state has further identified additional shortfalls in the current fiscal
27year that total at least $35 Million and are attributable to Local Housing of Adult Offenders
28and the Department of Corrections; and
29 WHEREAS, prior to recognizing the reduction of the Fiscal Year 2016-2017 official
30forecast in the amount of $340.5 Million, hundreds of millions of dollars in reductions and
Page 2 of 4 HLS 171ES-34 ENGROSSED
HCR NO. 2
1adjustments were made to agencies and departments in state government; and due to the state
2of emergency caused by rains and flooding, certain state departments are waiting on federal
3reimbursement of approximately $246 Million in disaster expenditures which has caused
4budgetary and cash flow problems for those agencies and departments; and in the last four
5months of the fiscal year, the options to eliminate the budget deficit are significantly
6reduced, thereby leading to the request to use $74,645,508 from the Budget Stabilization
7Fund towards elimination of the second mid-year deficit for the current fiscal year, which
8is a purpose for which the Budget Stabilization Fund is intended; and
9 WHEREAS, after incorporating debt service savings and means of financing options,
10the current deficit for Fiscal Year 2016-2017 is $304.22 Million, without inclusion of the
11aforementioned shortfalls of at least $65 Million.
12 THEREFORE, BE IT RESOLVED that pursuant to Article VII, Section 10.3 of the
13Constitution of Louisiana and R.S. 39:94, the Legislature of Louisiana does hereby consent
14to make available for appropriation from the Budget Stabilization Fund the sum of
15$74,645,508 of the balance of the Budget Stabilization Fund as of July 1, 2016, due to the
16reduction of the revenue forecast for the current fiscal year as adopted by the Revenue
17Estimating Conference at its meeting on January 13, 2017, and utilizing means of financing
18adjustments reduced that amount to $304.22 Million, which was recognized by the Joint
19Legislative Committee on the Budget at its meeting on January 27, 2017.
20 BE IT FURTHER RESOLVED that the treasurer is directed, after complying with
21the provisions of Article VII , Section 9(B) of the Constitution of Louisiana relative to the
22allocation of monies to the Bond Security and Redemption Fund, to take the appropriate
23steps to transfer $74,645,508 from the Budget Stabilization Fund to the state general fund.
24 BE IT FURTHER RESOLVED that a copy of this Resolution be transmitted to the
25treasurer.
Page 3 of 4 HLS 171ES-34 ENGROSSED
HCR NO. 2
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HCR 2 Engrossed 2017 First Extraordinary Session McFarland
Provides legislative consent to make available for appropriation from the Budget
Stabilization Fund the sum of $74,645,508, due to the reduction of the Fiscal Year 2016-
2017 official forecast in the amount of $340.5 Million as adopted by the Revenue Estimating
Conference at its meeting on Jan. 13, 2017, resulting in the second mid-year deficit for the
current fiscal year, and presented to and recognized by the Joint Legislative Committee on
the Budget at its meeting on Jan. 27, 2017.
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Appropriations to the
original bill:
1. Changes the amount available from appropriation from the Budget Stabilization
Fund from $50,000,000 to $74,645,508.
Page 4 of 4