Louisiana Senate Bill SB391

Louisiana 2010 Regular Session

• Introduced: 3/29/10
• Refer: 3/29/10
• Report Pass: 5/17/10
• Engrossed: 6/2/10
• Refer: 6/3/10
• Report Pass: 6/16/10

Caption

Constitutional amendment to authorize limited redirection and transfer of funds supporting appropriations and allocations from the state general fund and dedicated funds in certain circumstances. (2/3 CA13s1(A)) (RE1 SEE FISC NOTE SD EX See Note)

Impact

If passed, SB391 would significantly modify the existing constitutional restrictions on budget adjustments. Previously, the state was allowed to reduce appropriations by a maximum of 5% under specific circumstances; the amendment would double this limit. This change is expected to enable the legislature to respond more effectively to fiscal challenges by reallocating resources more liberally during periods of financial strain. However, it also maintains safeguards by requiring a majority vote of both houses of the legislature for adjustments beyond the prescribed thresholds, thus providing a layer of accountability.

Summary

Senate Bill 391 proposes a constitutional amendment to allow for limited redirection and transfer of funds that support appropriations from the state general fund and dedicated funds under certain conditions. It aims to increase the flexibility of the state government to manage its budget by adjusting allocations when projected deficits occur. Specifically, the bill increases the adjustment limit for allocated funds from 5% to 10% while imposing a requirement for legislative approval on any adjustment exceeding 5%. Furthermore, the amendment includes provisions for managing funding in future budget forecasts when declining revenue is expected.

Sentiment

The sentiment around SB391 is mixed, with support primarily from fiscal conservatives who argue that enhancing the state’s capacity to address budgetary deficits efficiently is crucial for maintaining essential services. Opponents, however, raise concerns regarding the potential for misuse of funds and the erosion of protections for constitutionally mandated allocations. Critics argue that the bill could pave the way for financial mismanagement if transparency and oversight do not remain vigilant, particularly during economic downturns.

Contention

Major points of contention focus on the perceived risks of loosening existing restrictions on fund reallocations, especially concerning funds that were meant for specific, mandated purposes. Concerns arise around whether the increased flexibility might lead to reduced allocations in critical areas such as education and public safety if the legislature opts to redirect funds for more politically favorable projects. The requirement for legislative approval for significant adjustments serves as a necessary check, yet it remains to be seen how effectively this will work in practice.