(Constitutional Amendment) Limits the amount of monies that may be appropriated in a fiscal year (OR SEE FISC NOTE GF EX)
Impact
If enacted, HB 451 will amend existing provisions in the Louisiana Constitution regarding the determination of state expenditure limits. The proposed amendment mandates that appropriations for state funds must not exceed the lesser of the Louisiana Sustainability Limit or the official revenue forecast. This could lead to more conservative budgeting practices and potentially limit the state's ability to respond to economic fluctuations or emergencies, as spending would be constrained by historical GDP growth rates. The bill also allows for certain exceptions to the limit, enabling the legislature to allocate funds above the limit under specific circumstances, such as for tax rebates or nonrecurring revenue uses.
Summary
House Bill 451 is a proposed constitutional amendment designed to establish the Louisiana Sustainability Limit, which seeks to restrict the total amount of state general fund and dedicated fund appropriations that the legislature can make in any fiscal year. This limit will be tied to the 10-year average percentage change in the state's gross domestic product (GDP), thereby linking fiscal appropriations to economic growth. Starting from the fiscal year 2024-2025, the initial limit will be based on actual appropriations from the fiscal year 2022-2023, and future limits will be adjusted based on the prescribed growth factor. This proposal emphasizes fiscal discipline and aims to create a more predictable budgeting process for state finances.
Sentiment
The sentiment surrounding HB 451 appears to be mixed, with supporters advocating for stronger fiscal responsibility and transparency in state budgeting. They argue that by tying appropriations to GDP growth, the proposal will prevent irresponsible financial management and overreach by future legislatures. Conversely, opponents express concerns that the sustainability limit may restrict necessary governmental services and flexibility to meet emerging challenges, particularly in times of economic downturn. The debate reflects broader tensions between fiscal restraint and the need for responsive governance.
Contention
Notable points of contention regarding HB 451 include the implications of basing state funding on historical economic performance, as critics argue that this could disadvantage investments in critical services during periods of economic strain. Furthermore, the requirement for the legislature to alter the sustainability limit could necessitate a two-thirds majority vote, which may impede timely adjustments needed in response to unforeseen fiscal demands. Opponents worry this rigid structure may yield long-term detrimental effects on public services and local governance, particularly in relation to funding education, healthcare, and infrastructure projects.
(Constitutional Amendment) Limits the amount of State General Fund (Direct) revenues that may be appropriated in a fiscal year for recurring expenses and restricts use of such revenues above that limit (EG SEE FISC NOTE GF EX)
Limits the amount of recurring State General Fund (Direct) revenues that may be appropriated in a fiscal year for recurring expenses and restricts use of such revenues above that limit (RE SEE FISC NOTE GF EX)
(Constitutional Amendment) Increases the maximum annual amount of severance tax revenues that may be remitted to parishes in which the associated severance occurs (OR SEE FISC NOTE GF RV)
Provides for monies in the Budget Stabilization Fund to be available for appropriation in Fiscal Year 2020-2021 (Item #14) (EG +$90,062,911 GF RV See Note)
Transfers the sound recording investor tax credit program from La. Economic Development to the Dept. of Culture, Recreation and Tourism and extends the duration of the program (EN DECREASE GF RV See Note)