AT THE SPECIAL SESSION

Edwards' plan rejected

Committee balks at using all of rainy day fund

BATON ROUGE — The House Appropriations Committee derailed a bill Thursday containing Democratic Gov. John Bel Edwards’ plan for dealing with a $304 million midyear budget deficit, but approved a resolution aimed at ensuring state dedicated funds pay their fair share of the state’s annual debt service.

The Republican-majority committee voted 15-7 to kill House Bill 1, by Rep. Walt Leger, D-New Orleans, a measure backed by the Edwards administration. But it voted 21-2 to send House Concurrent Resolution 1 by House Speaker Taylor Barras, R-New Iberia, to the full House for debate.

Rep. Mark Abraham, RLake Charles, voted for both measures. Rep. Bob Hensgens, R-Abbeville, voted against the Leger bill and for the Barras resolution. Rep. James Armes, D-Leesville, was absent. They are the three Southwest Louisiana representatives on the committee.

The committee approved two bills Wednesday that make appropriations designed to deal with the $304 million midyear deficit.

H.B. 3 by Rep. Cameron Henry, R-Metairie and committee chairman, would use only $74.6 million from the state’s rainy day fund. But Edwards insists lawmakers need to use $119 million from the fund to protect state agencies from harmful budget cuts over the last four months of the fiscal year.

Henry said the cuts in his bill are not as harmful as some are led to believe because there are agencies that got extra funds at the beginning of the year. Democrats on the committee disagreed.

The committee also approved H.B. 8, by Rep. Rick Edmonds, R-Baton Rouge; it wouldn’t use any money from the rainy day funds. Agencies would receive larger cuts as a result.

Henry’s bill was approved 19-4 and Edmonds’ 17-6. Leger asked that his bill also be sent to the floor, but Henry said the two measures passed earlier can be amended and serve the same purpose.

Although Leger’s measure doesn’t mention the $119 million Edwards wants to use from the rainy day fund, it contains budget cuts much smaller than those in the other two bills.

Leger said smaller reductions are necessary because of the high cost of historic flooding in the state, the drop in the price of oil to $30 per barrel and declining state revenues. He said agencies that serve the serious needs of residents need the additional funding.

The rainy day fund withdrawal is contained in Senate Concurrent Resolution 2, by Senate President John Alario, R-Westwego. It would use $119 million from the fund and cleared the Senate Finance Committee. The Alario resolution is up for debate by the full Senate.

Barras said the goal of his resolution is to capture some 3 percent of dedicated funds to help pay the state’s $400 million annual debt obligation. He said the state constitution provides for the payments, but Leger questioned whether that is what the constitutional provision says.

State funds are dedicated to certain agencies with constitutional amendments approved by voters and by laws passed by the Legislature.

Although the funds are considered untouchable by some, Barras said they have helped pay debt service in the past. He said that if the dedicated funds had been tapped for their roughly 3 percent last year, the state general fund would have received an additional $74 million. The total for next year could be as high as $96 million, he said.

This is not a funds sweep, Barras said, but an accounting correction. He called it the right thing to do.

Leger said he doesn’t think the constitution is clear about the use of dedicated funds for debt service. He said it would take a bill to get the job done.

Barras said the state treasurer supports the concept and has been asked to work on its implementation.

Jay Dardenne, state commissioner of administration and the governor’s budget chief, was asked to comment on the Barras resolution. He said he isn’t sure it meets the requirements of the governor’s list of issues to be decided at the special session.

Dardenne said what Barras wants to do was tried by the Gov. Buddy Roemer administration (1988-1992), but was abandoned because it was too onerous to implement. He said the process would also result in significant budget reductions to areas like the TOPS scholarship program, the transportation trust fund and health care programs that draw significant federal funds.

Barras said those funds could be restored later by the Legislature. Rep. Lance Harris, R-Alexandria and chairman of the House Republican Caucus, said the technology is out there to accomplish what Barras wants to do.

“Everything is onerous, but that isn’t a reason not to do it,” Harris said. He moved to send the resolution to the full House.

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