BATON ROUGE, La. (WAFB) - Without objection Tuesday, June 9, a House committee advanced a plan that aims to prevent the legislature from giving more money to state agencies than they actually need to operate.
The bill, by Rep. Barry Ivey, R-Central, would set aside 1% of state tax and fee revenue at the beginning of each year in a trust fund. That roughly $140 million would collect interest until the end of the year, when state agencies could come before the Joint Legislative Committee on the Budget and request more money if their appropriation was inadequate.
“Joint budget could decide whether or not the need merits additional funding,” Ivey said. “We want to make the last few nickels squeal when they come out of the treasury.”
Ivey argued state departments without significant needs would not want the “headache” of appearing before the legislature to ask for more money. Unspent cash in the fund would roll over and could be tapped to fill holes in the following year’s budget.
Ivey’s plan is different from previous proposals to limit spending. During the regular session, some lawmakers wanted to cap the spendable amount state tax revenue at 98%, effectively creating a 2% surplus each following year, but guaranteeing reductions to state departments.
The legislature cannot freely spend surplus money under Louisiana’s constitution, meaning the cash that would have otherwise gone to LSU could not be restored to LSU the following year. Surplus money can only be used to pay down debt, saved, or invested in road projects.
Ivey says creating the trust fund would give lawmakers more flexibility to spend the withheld money as needed, which is partly why the bill earned bipartisan support.
The plan would take affect in July of 2021, meaning lawmakers would not have to adjust the budget they’re currently crafting in the special legislative session. It now moves to the House floor for full debate.
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