February 23, 2016
BATON ROUGE – Despite opposition from several legislators, the House Appropriations Committee today gave an initial nod to a bill by a Houma lawmaker to let private citizens donate money to Louisiana to help ease the state’s budget issues.
The committee voted 11-7 to send House Bill 77 by Republican Rep. Beryl Amedée to the House floor for more debate. The legislation would create the Payment Towards State Debt Fund to accept private donations to the state. It also details how the money would be distributed to cover state debts.
The bill as written, however, would not automatically help ease either the nearly $1 billion shortfall for the current year or the $2 billion deficit for the 2016-17 fiscal year. Instead, it would direct at least a portion of any private donations to help pay off the state’s long-term debts.
HB 77 says at least 25 percent of any private donation would be appropriated for the Budget Stabilization Fund, commonly known as the Rainy Day Fund. Another 10 percent would go toward paying the balance of the state’s multi-billion-dollar unfunded accrued liability of retirement costs for state employees and teachers. The remainder would be used to help pay off state bonds early.
Lawmakers have used the Rainy Day Fund to plug budget shortfalls in recent years and are poised to do so again this year.
“We don’t know how much money people might contribute; we don’t know if they’ll contribute a dollar,” Amedée told committee members. “But if they do and when they do we know have a process in place so that the money would be used to pay down state debt.”
Amedée, who is a member of the Appropriations Committee, said she filed the bill after hearing from two constituents who had heard about the state’s budget shortfalls and asked what would happen if they cut the state a check to cover their share. The freshmen legislator said she worked with legislative staff to draft a plan for how to handle private donations based on language already in law detailing how the state handles other types of outside money.
“I’ve already heard from a few people that are interested,” she said. “If this gets put into place they’d like to make contributions.”
Amedée said that even if the law didn’t prompt a wave of private donations, she hoped it would at least raise awareness about the budget and state debts.
Rep. Pat Smith, D-Baton Rouge, said it wasn’t fair to set up another dedicated fund in the state budget when the Appropriations Committee voted a day earlier to remove a series of “statutory dedications” that guarantee in law the state will fund certain operations.
Some lawmakers argue that too many funding dedications in state law have limited their ability to balance the budget. Smith, though, said she opposed the committee’s Monday vote to remove the dedications.
“I just don’t understand setting up another fund,” Smith said of HB 77.
Smith objected to a motion to send the bill to the House floor, but only six of her colleagues followed suit.
Voting for the bill were Reps. Amedée; James Armes, D- Leesville; Jerome “Zee” Zeringue, R-Houma; Mark Abraham, R-Lake Charles; Dee Richard, I-Thibodaux; Blake Miguez, R-Erath; Tony Bacala, R-Prairieville; Charles Chaney, R-Rayville; Lance Harris, R-Alexandria; Valarie Hodges, R-Denham Springs; and John Schroder, R-Covington.
Voting against were Reps. Smith; Larry Bagley, R-Stonewall; Johnny Berthelot, R-Gonzales; Robert Billiot, D-Westwego; Gary Carter, D-New Orleans; Jack McFarland, R-Winnfield; and Dustin Miller, D-Opelousas.
Huge thank you and congratulations to our ABLE Committee Chairs @MOTreasurer @Eric_Schmitt and @ILTreasurer Mike Frerichs for their great job..