Louisiana Senate Bill SB89

Louisiana 2017 Regular Session

• Introduced: 3/30/17
• Refer: 3/30/17
• Refer: 4/10/17

Caption

Provides for the limits of appropriations from state general fund and dedicated funds to ninety-eight percent of the official forecast unless certain conditions have been met. (7/1/17) (OR -$188,400,000 GF EX See Note)

Impact

If enacted, SB 89 would significantly impact how the Louisiana legislature approaches budget appropriations each fiscal year. By setting a cap at ninety-eight percent of the official forecast, the bill would limit legislative flexibility in allocating funds beyond this threshold unless a history of significant fund balances—specifically triggering a mechanism for approval after three consecutive years—can be demonstrated. This is expected to reduce the risk of budget shortfalls and promote more sustainable financial planning practices for the state’s fiscal future.

Summary

Senate Bill No. 89, introduced by Senator Fannin, seeks to amend Louisiana's current appropriations process by limiting the amount that can be appropriated from the state general fund and dedicated funds to ninety-eight percent of the official forecast unless certain conditions are met. The proposed law intends to enhance fiscal responsibility by ensuring that appropriations align closely with actual revenue forecasts, thereby avoiding overcommitting state funds based on optimistic financial projections. This change aims to create a more stable financial environment for the state budget.

Sentiment

The sentiment surrounding SB 89 appears to be cautiously optimistic, focusing on the intent to create more discipline within fiscal policies. Proponents argue that strict adherence to the funding cap will foster prudent financial management and protect the state’s financial health. However, there is apprehension among some legislators regarding the potential inflexibility this may impose, particularly during periods of economic downturn or unexpected financial needs where rapid funding allocation might be crucial.

Contention

Notable points of contention relate to the balance between fiscal discipline and necessary flexibility in appropriations. Critics of the bill argue that while it aims to promote responsible budgeting, it may inadvertently hinder the legislative body's ability to respond quickly to urgent financial needs that require rapid funding adjustments. This tension underscores the ongoing debate within the legislature about the best approach to balance sound fiscal management with the practical realities of governance in an unpredictable economic environment.