Business of Politics

Dedicated funds get a close look in session

by Jeremy Alford, LaPolitics

Should the Legislature unlock the state’s dedicated funds to free up more money for the budget?

An affirmative answer is one of the war cries coming from Republicans in the House and Senate this session.

These are funds that, for one reason or another, were given special protections by the Legislature over the years, which means the money they’re holding cannot be accessed by lawmakers and used on other needs.

It’s a perennial topic at the Capitol; as universities and hospitals have seen their budgets cut, lawmakers have been barred from dipping into a variety of protected funds that could have helped ease the pain.

Debating the importance of these protections will once again be an issue as lawmakers continue with their regular session that adjourns June 8.

To be certain, extra cash is exactly what Gov. John Bel Edwards is calling for, although he has taken no firm stance on whether dedicated funds should be unlocked.

The governor’s executive budget has $440 million in needs that are not yet fully funded, and there’s an additional $1.3 billion in temporary taxes that expire in 2018.

That’s why some lawmakers contend this latest incarnation of the dedicated funds debate will bring with it some urgency.

To better understand the issue, here’s a look at the four categories of dedicated funds some lawmakers want to open up:

— There are 19 constitutionally dedicated funds holding $2.5 billion in appropriations this fiscal year, according to information provided by the House Appropriations Committee. The TOPS Scholarship Fund and the Artificial Reef Fund are two examples.

— There are also 124 statutorily dedicated funds from special revenue sources such as fees and licenses holding $664 million. You can find the Boll Weevil Eradication Fund and the Concealed Handgun Permit Fund in this category.

— Plus there are another 97 statutory funds for “local support,” including sales tax dedications, holding $70 million. These are largely local funds, like the East Baton Rouge Parish Community Improvement Fund and the Lake Charles Civic Center Fund.

— Finally, there are 42 statutory funds for agency and department support holding $716 million, which is money that would otherwise be a part of the state general fund. The Tobacco Settlement Enforcement Fund, Louisiana State Police Salary Fund and Fireman Training Fund are all examples.

Source: House Fiscal Division (click to view)

You can review each and every one of these funds, and their totals, on the LaPolitics website by clicking here. There’s also this flowchart and graph that offers a broader view of how the funds are organized.

In terms of related policy pushes this session, House conservatives are looking with interest across Memorial Hall to Sen. Sharon Hewitt, R-Slidell, who has SB 226 to eliminate a number of different funds — none of them constitutional.

Hewitt’s proposal uses criteria that the Legislature’s Joint Budget Committee is supposed to be applying during regular fund reviews.

Those reviews, however, have not been taking place, says Hewitt.

Some lawmakers are already expressing support for the approach, especially compared to across-the-board reductions or eliminations.

“We cannot keep doing the things that we are doing now and it’s time for us to helicopter up and look at the big picture,” Hewitt says. “We need to be willing to un-dedicate these funds and put all of the money on the table and then let the administration and Legislate prioritize spending.”

Her legislation has been assigned to the Senate Finance Committee but a hearing has not yet been scheduled.

Staying on topic, here are a few related bills worth keeping an eye on:

— HB 236 by Rep. Rob Shadoin, R-Ruston, is a constitutional amendment that goes after the constitutionally dedicated funds.

— HB 458 by Rep. Beryl Amedee, R-Houma, eliminates a handful of certain statutory dedications, but doesn’t go as far as Hewitt’s proposal.

— HB 588 by Rep. Jay Morris, R-Monroe, seeks to reduce by 50 percent the revenue dedications in certain funds.