Limits the amount of recurring revenue that can be recognized by the Revenue Estimating Conference (EG NO IMPACT GF EX See Note)
Impact
The enactment of HB 656 will bring forth changes to the existing statutory definitions and calculations that govern revenue projections. By mandating that the REC must establish a baseline revenue limit each year, the bill changes how funds are designated, particularly in terms of 'recurring above the revenue limit.' Notably, it prohibits the inclusion of certain funds, such as those withdrawn from the Budget Stabilization Fund, in any calculations. This could lead to more cautious budgeting practices and potentially inhibit aggressive spending based on overly optimistic revenue projections.
Summary
House Bill 656, sponsored by Representative Geymann, represents a significant reform aimed at the fiscal policy framework in Louisiana. The bill seeks to impose limits on the amount of recurring revenue that the Revenue Estimating Conference (REC) can recognize. This is achieved by defining specific criteria for calculating revenue limits and categorizing revenues into recurring and nonrecurring. The new framework intends to create a more predictable and stable revenue recognition process, which could enhance fiscal discipline within state budgeting processes.
Sentiment
Overall, the sentiment surrounding HB 656 appears to be cautiously optimistic among fiscal conservatives who support measures aimed at enhancing financial accountability and stability. Supporters argue that these changes will provide a more realistic framework for budgeting, which is essential in maintaining the state's fiscal health. On the contrary, some critics voice concerns that the restrictions on revenue recognition may ultimately limit state funding for critical services and programs, especially during periods of economic uncertainty. As such, the bill has generated a mixed response from stakeholders.
Contention
Key points of contention in HB 656 arise around the definitions of recurring versus nonrecurring revenues and the impacts of these classifications on state funding and budget allocations. Detractors argue that by setting strict revenue limits, the bill may restrict the ability of the state to respond flexibly to economic fluctuations. Furthermore, the requirement for unanimous decision-making by the REC in determining yearly revenue limits may create practical challenges, especially in times of political disagreement. These concerns reflect broader debates over fiscal policy and state governance in Louisiana.
Limits the amount of recurring State General Fund (Direct) revenues that may be appropriated in a fiscal year for recurring expenses and restricts use of such revenues above that limit (RE SEE FISC NOTE GF EX)
(Constitutional Amendment) Limits the amount of State General Fund (Direct) revenues that may be appropriated in a fiscal year for recurring expenses and restricts use of such revenues above that limit (EG SEE FISC NOTE GF EX)
Requires the Revenue Estimating Conference to designate certain general fund money from mineral revenue as restricted and prohibits including such revenue in the executive budget (RE SEE FISC NOTE GF RV See Note)
Authorizes the executive budget to contain a "permanent income tax cut" based upon some or all of the amount of recurring revenues which the Revenue Estimating Conference estimates will be actually received by the state in a fiscal year which are in excess of the amount estimated in its official forecast for the fiscal year. (7/1/10)
Provides relative to the disposition of certain state revenues through repeal of the Revenue Stabilization Trust Fund and dedication of certain revenues to the Budget Stabilization Fund. (EG SEE FISC NOTE GF RV See Note)