Thursday, June 20, 2024

Louisiana House committee backs do-over for constitutional spending limit changes

by BIZ Magazine

By David Jacobs | The Center Square

The Louisiana House’s spending committee advanced a new version of a state constitutional amendment Monday meant to restrain state spending growth that voters rejected last year.

Supporters said the change would set realistic limits on government growth without cutting current spending, while critics said the new cap is unnecessary and would make it more difficult for legislators to do the job they were elected to do.

Rep. Beau Beaullieu, R-New Iberia, authored House Bill 276 and the associated House Bill 273, which would strip the current expenditure limit from the constitution. He also was the author of the legislation calling for a similar measure that failed at the polls in November by a 56%-44% margin with a 70% voter turnout.

Louisiana currently has a spending limit calculated based on the old limit multiplied by the average personal income growth over the past three years. Because of the compounding effect, the limit rarely comes into play, which Beaullieu said makes it basically meaningless.

HB 276 would create a more complex formula involving the three-year average growth in state personal income, gross domestic product, population and the regional consumer price index. Spending growth would be limited to 5% per year. The bill exempts federal COVID-19-related dollars from the calculation.

Beaullieu said this year’s proposal is basically the same as last year’s except that the amendment wording is different. He said he didn’t think voters fully understood the measure and suggested supporters would have more ability to make their case in a “post-COVID world.” In his experience, people tended to support the change once it was fully explained to them, he said.

Rep. Rick Edmonds, R-Baton Rouge, called the new effort “a retry of a very good principle.”

“These bills are a solution in search of a problem,” said Jan Moller of the Louisiana Budget Project, which argues state government should use some of the savings from the tax overhaul lawmakers are attempting this year to spend more on basic needs such as early childhood education.

The change would impose restrictions on future legislatures and make it more difficult for the state to recover from a recession that resets the state’s funding baseline.

A constitutional amendment requires support from at least two-thirds of the legislators in each chamber and a majority of voters.

The House Appropriations Committee advanced without objection House Bill 511 by Rep. Jack McFarland, R-Jonesboro, which seeks to dedicate the proceeds from state sales taxes on vehicles to transportation construction. The legislation calls for redirecting an additional 10% of the tax from the general fund to transportation each year until the full amount is going to roads and bridges.

McFarland had considered filing legislation this year to raise gas taxes, in part because the value of the state gas tax has been eroded by inflation and improved fuel efficiency since it was last raised three decades ago, but decided not to because of widespread opposition. Supporters said they preferred McFarland’s HB 511 over a higher state gas tax because sales taxes naturally rise with inflation and because, unlike higher fuel taxes, it would not place a higher burden on lower-income drivers. The bill does not raise taxes on vehicles.

Vehicle sales taxes raise about $400 million per year. Eric Kalivoda, deputy secretary with the Louisiana Department of Transportation and Development, said his department will be happy to put the new money to good use but reminded lawmakers they would need to consider the impact of losing funding for other priorities.

The committee also advanced without objection Edmonds’ House Bill 38, which requires taxpayer-funded school systems to report their financial information on state government’s Louisiana Checkbook website.

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