Can lawmakers resist tapping into La. savings account before it meets its threshold?
BATON ROUGE, La. (WAFB) - Since 54% of voters agreed to create a state savings account in Louisiana six years ago, it’s grown at an incredibly fast pace. It’s reached roughly $1 billion through corporate and franchise taxes.
“And when you have a large amount of money sitting around, then it becomes the target of things that aren’t necessarily the most efficient use of those dollars,” said PAR Louisiana President Steven Procopio.
Procopio says the account must reach $5 billion before lawmakers can even consider touching the money. But like most things in politics, there are loopholes.
“The biggest one is with a two-thirds vote they can just take money out of the fund. PAR’s biggest concern is that we have a fiscal cliff coming up with some of the sales tax falling off and that legislators might be tempted in the future to use money that’s been set aside to fix a long-term structural problem,” Procopio added.
The money is intended to go toward infrastructure, but a two-thirds vote would allow lawmakers to use the money for whatever they want.
“I don’t think that’s going to happen. The other opportunity is if there’s an emergency you can tap into it as well, but, since we have a surplus this upcoming fiscal year, I don’t anticipate that being an issue,” said Rep. Jerome Zeringue (R).
As chairman of both House Appropriations and the Joint Budget Committee, Rep. Zeringue answered whether or not he’s heard of anyone flirting with the idea of tapping into the money prematurely.
“Well, obviously they look at the amount of money that’s going to be in the fund. But again, the fund was established to have an opportunity to invest and make significant investments in addressing infrastructure issues which we need,” Rep. Zeringue added.
A large bulk of the money has poured into the account in the last couple years, and it was more than economists predicted. But the uptick in tax collections is likely more of a short-term anomaly as opposed to a long-term increase in the state’s treasury.
“The big concern is do you take money that essentially could be used for long-term investments or spend it on short-term needs that will be a recurring expense in the budget, but you won’t have a recurring source of revenue. And that’s where you really begin to get into problems fiscally,” Procopio explained.
WAFB was also told this will likely be a problem that surfaces after the next regular session when lawmakers begin to look for alternatives to renewing a tax, finding a new tax, or making cuts to things like higher education and healthcare. That’s when this savings account is going to look extra appealing to some at the Capitol.
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