Peli-Guide to the Constitutional Amendments, Part II
The legislature approved eight new constitutional amendments this past spring that will need voter approval to go into effect. Luckily, they are not all on the ballot at the same time! Four were on the October primary ballot, while the remaining four will be on the November 18th runoff election ballot.
This is the second in a two-part series that discusses these amendments in depth — what the issues are and what the amendments do, so that as a voter, you can make an informed decision before you step into that voting booth. This second part covers the remaining four amendments. Early voting starts Friday, November 3rd, and runs through Saturday, November 10th. There will be no early voting on Sunday, November 5th or Friday, November 10th in observance of Veterans Day.
This amendment clarifies language that is currently in the state’s constitution regarding the timing in which the Governor must sign or veto a bill, and how the legislature may handle a vetoed bill.
Currently, the governor must sign or veto bills within 20 days of a legislative session ending, or within 10 days prior to a session ending if a bill is sent well enough before the end of the session. If the governor vetoes a bill, then a veto session must begin on the 40th day after a session ends, unless a majority of either the House of Representatives or Senate vote to not convene an override session.
The last decade or so has seen an increase in special sessions that the drafters of the constitution did not foresee. In recent years, there has been an inclination for the legislature to attempt to override gubernatorial vetoes. If the legislature is in session, whether regular or special, when the 40th day after a prior session occurs and there is a desire to override a veto, then the law is unclear on the procedure for action in this case. Currently, the law is being interpreted by some to mean that the current session must end, a veto session is held, and then the regular session can resume. This can cause some confusion.
This amendment removes ambiguity in the law. If the timing of veto sessions happens to occur during another session, the vetoed item may be considered without holding a special session, or delaying regular work, just to take up that veto override decision.
A vote for the amendment would clarify the language that is currently in the constitution.
A vote against the amendment would leave the constitution as it is now.
This amendment removes six special dedicated funds that were created in the constitution that are inactive and include: Atchafalaya Basin Conservation Fund, Higher Education Louisiana Partnership Fund, Millennium Leverage Fund, Agricultural and Seafood Products Support Fund, First Use Tax Trust Fund, Louisiana Investment Fund for Enhancement (LIFE).
Only one fund, the Louisiana Investment Fund for Enhancement (LIFE), has any money in it, ($604) and hasn’t collected any additional funds in the past 20 years. This money would be transferred to the state’s general fund.
The constitution currently contains 36 dedicated funds. When it was created in 1974, it contained two. None have been eliminated since they were created. Some of these funds have not had funds in them for years, some have never had funds in them. In addition to these funds which exist in the state’s constitution, there are over 400 such dedicated funds in Louisiana’s statutes.
Those in support of the proposed amendment argue that it will help clean up the cluttered state constitution, without affecting the state finances. If the legislature chooses to dedicate funds, the better place to have this is in state law (statutes) with the majority of the others, not in the constitution. Dedicated funds should always be reviewed for purpose, need, and funding on a regular basis, and if not used, then removed. Placing them in statute allows for easier revision or removal, as conditions change.
Those opposed to the amendment say that the dedicated funds should remain just in case the legislature wants to use them in the future, and that they aren’t hurting anything by remaining in the constitution.
A vote for the amendment would remove the funds from the constitution and transfer the remaining $604 to the state general fund.
A vote against the amendment would leave the funds in the constitution.
This amendment would authorize local governments to provide additional property tax exemptions of up to $25,000 for qualified first responders, including police, firefighters (including volunteer firefighters), EMS, dispatchers, and other full-time public employees involved with rapid emergency response (such as HAZMAT or emergency preparedness employees).
The state constitution grants a $75,000 homestead exemption for the home in which you live, meaning that you do not pay property taxes on the first $75,000 in value of your home. Over the years, there have been numerous additional exemptions added for certain people: disabled, military veterans, income thresholds, and senior citizens. Most of these exemptions are up to $100,000, and senior citizens can “lock in” their tax rate at a certain age if they meet certain criteria.
Those in support of the amendment argue that this would allow a parish to choose whether or not they want to participate in this additional exemption, and how much the exemption will be, capped at $25,000. It could help local governments recruit first responders in a shortage area. Since it is a choice for the parish, it is not a mandate from the state to lower their tax collections. It would be an option, but one that could differ from parish to parish across the state.
Those in opposition to the amendment argue that special tax breaks allow the government to pick winners and losers in an ineffective and inefficient manner. This narrows the tax base, leaving fewer people to pay more and pick up the government tab. This requires then that the tax rate be higher on those that don’t get a special tax break in order to make the necessary revenue to fund government. An extra tax break will decrease the revenue available to school systems and the very agencies the first responders work for, putting an increased burden on local government budgets. It will create an inequitable taxing system, where neighbors with property of similar value will pay different property tax bills, all because of a career choice.
A vote for the amendment will allow local governments to increase property tax exemptions for first responders.
A vote against the amendment will leave the constitution and property tax exemptions how they are right now.
This amendment changes how the legislature, with a two-thirds vote of both the House and Senate, can use the funds in the Revenue Stabilization Fund.
The Revenue Stabilization Fund was established in the constitution in 2016 as a part of a package of tax bills aimed at reforming portions of the corporate tax code, and to help smooth out the budget cycle that is constantly plagued with booms and busts. All revenues from the corporate income tax and the corporate franchise tax combined that exceed $600 million per year are automatically deposited into this newly created fund, along with some excess mineral revenues. These revenue sources were chosen because of their volatility in collections compared to others which are relatively stable. The current balance in the fund is $2.2 billion.
When the fund was established in 2016, the legislature placed certain limits on the use of the money in the fund. Lawmakers can access any amount for an emergency with a two-thirds vote. Or, once the fund reaches a minimum balance of $5 billion, the legislature can access 10% annually for infrastructure projects.
This amendment would change some of the restrictions placed on its use. It would remove the provision that allows the legislature to access any amount for an emergency, but would allow access of up to $250 million per year for an emergency or budget deficit with a two-thirds vote. However, they can only access these funds if they are still needed after they have used the allowed amount from the existing Rainy Day Fund and if there is still a valid need for the emergency funding or a budget deficit still exists. The rule that still allows for using 10% of the balance on infrastructure projects once it reaches $5 billion will remain unchanged.
Those in support of the amendment say that the existing language is overly broad, that emergency is undefined and that anything could be called an emergency. In addition, there are no limits placed on the amount of funds that can be withdrawn at one time, so therefore, technically, the fund could be drained all at once. This has not been an issue in the past, because the fund did not have much money in it until recently. Also, there are currently no rules in place that allow lawmakers to use these funds in times of budget deficits, which undermines the intent of the account, which is to bring stability to the state’s budget.
Those in opposition of the amendment say that the state already locks up too much money in statutory and constitutionally protected accounts, which limits lawmakers’ ability and flexibility to prioritize the needs of the state. This amendment will further limit their ability to prioritize by limiting the amount and the circumstance under which they can access these funds.
A vote for the amendment will change the provisions of the Revenue Stabilization Fund to limit withdrawals to $250 million per year with a two-thirds vote of the legislature and adds that it can be used to fill budget deficits.
A vote against will leave the current provisions for the Revenue Stabilization Fund in place.
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