Louisiana Senate Bill SB49

Louisiana 2022 Regular Session

• Introduced: 2/22/22
• Refer: 2/22/22
• Refer: 3/14/22

Caption

Constitutional amendment to reallocate severance tax to parishes for Parish Transportation Funds. (2/3 - CA13s1(A)) (OR -$15,700,000 GF RV See Note)

Impact

The proposed amendment not only retains the annual adjustment of the maximum remittance based on the Consumer Price Index but also mandates that a minimum of 50% of any additional severance tax revenue received—referred to as excess severance tax—be allocated strictly for local transportation purposes. This will ensure that parishes have dedicated funds available to improve roads, bridges, and related infrastructure, potentially leading to improved travel safety and economic growth. The proposed funding mechanism is designed to make these local governments less dependent on variable state funding and provide a more stable financial resource for community projects.

Summary

Senate Bill 49 proposes a constitutional amendment aimed at reallocating severance tax revenues to parishes within Louisiana. Specifically, it seeks to modify the way severance taxes collected from natural resources—excluding sulphur, lignite, and timber—are distributed, increasing the maximum amount that can be retained by the governing authority of the parish where the severance or production occurs. Initially, the bill sets this maximum at $1,850,000 for the fiscal year following sufficient collections, with plans to increase it to $2,850,000 in subsequent years. This significant change is expected to enhance local funding for parishes, particularly for important transportation infrastructure projects.

Sentiment

The sentiment surrounding SB 49 appears to be supportive among local government officials and community advocates who see potential for improved infrastructure and enhanced local control. Supporters view the reallocation of severance taxes as a necessary step toward empowering parishes to make decisions about their transportation needs without waiting for state-level approval or funding. However, some critique the bill on the basis that it may further entrench financial disparities between parishes based on their natural resource wealth. The discussion reflects a broader debate about local versus state governance and how best to finance local projects.

Contention

Notable points of contention focus on the mechanics of reallocating funds and the requirement for parishes to allocate the excess revenue exclusively to transportation projects. Critics argue that imposing such restrictions could limit the parishes' ability to address other pressing needs within their communities. Moreover, the bill's reliance on fluctuating severance tax revenues could lead to unstable funding, raising concerns about long-term financial viability of the projects funded through this mechanism. Ultimately, the passage of SB 49 would signify a substantial shift in how local governments in Louisiana can manage and benefit from their natural resources.