Louisiana House Bill HB441

Louisiana 2017 Regular Session

• Introduced: 3/31/17
• Refer: 3/31/17
• Refer: 4/10/17

Caption

(Constitutional Amendment) Phases out the revenue sharing fund over 10 years (OR INCREASE GF RV See Note)

Impact

If enacted, the bill will significantly alter the way local governments receive financial support, particularly in relation to funding meant to compensate for lost tax revenue from the homestead exemption. Local parishes currently rely on this revenue sharing fund to support various services and obligations, including retirement systems and tax-related expenditures. Reducing this funding could place additional fiscal pressure on local authorities, potentially resulting in budget deficits or alterations in the level of services provided to constituents.

Summary

House Bill 441 proposes a constitutional amendment that phases out the state's annual allocation to the revenue sharing fund over a ten-year period. This fund is currently utilized to offset revenue losses experienced by local governments due to the homestead exemption. Under HB441, the allocation, which stands at $90 million per year, will be reduced by $9 million each fiscal year starting from FY 2018-2019 until the fund is fully eliminated. This modification aims to adjust the financial structure of state funding mechanisms in light of changing budgetary constraints.

Sentiment

The sentiment surrounding HB441 appears to be divided among legislators and stakeholders. Proponents argue that the phase-out of the revenue sharing fund is necessary to alleviate pressures on the state budget and that local governments should find alternative funding solutions without the reliance on state allocations. Conversely, opponents express concern that the elimination of this fund could undermine local governance and fiscal independence, as many parishes depend on this revenue to maintain essential services, thereby potentially exacerbating local financial difficulties.

Contention

Key points of contention are likely to arise regarding the adequacy of local funding and the impact on community services. Critics argue that a significant reduction in state funding undermines the local governments' ability to manage and deliver essential services effectively, particularly in jurisdictions where the homestead exemption constitutes a substantial portion of the tax base. In addition, there are concerns about the long-term implications of this policy on local governance and community welfare, which may fuel further debate regarding the equitable distribution of state resources.