(AP) — Ideas about how to restructure, divvy up and use the state’s “rainy day” fund are plentiful at the Louisiana Capitol, as the fund has become one of the central arguments in the state budgeting battle between the House and Senate.
Whether lawmakers tap into the rainy day fund will help determine the depth of cuts that colleges, health care and other programs take in the more than $28 billion budget for the new fiscal year that begins July 1.
An impasse between the two chambers continued Tuesday. Lawmakers are grappling over whether to make steep cuts in services to cope with a $1.3 billion drop in state general fund revenue or to use one-time funds, like the rainy day fund, or other revenue sources to plug gaps and lessen cuts.
The Senate has overwhelmingly backed a plan to take the one-third of the rainy day fund allowed under law — or $258 million — and divide that money into three allocations of $86 million. The money would be doled out over three budget years to help stave off cuts.
“We’re at a time where we can certainly make a case for tapping into one-third of the rainy day fund,” said Sen. Mike Michot, R-Lafayette, chairman of the Senate Finance Committee.
The idea hasn’t come up for debate in the House because leaders there oppose using the fund this year and instead want to use it for the 2011-12 budget year, when federal stimulus aid disappears and Louisiana’s budget woes are expected to worsen.
“We need to save some of our resources,” said House Speaker Jim Tucker, R-Terrytown.
Either plan would call for adjustments in the laws tied to the rainy day fund.
Formally called the Budget Stabilization Fund, the rainy day fund was created in the state Constitution in 1998 to help with state budget shortfalls. Certain pots of money immediately flow into it, including budget surpluses and state income tied to oil and gas.
The fund can be tapped when the official state income forecast for an upcoming budget year is less than the current year. Only one-third can be withdrawn in a two-year period, and a two-thirds vote is needed in the Legislature. Lawmakers have tapped the fund only once, in November 2002 for $86 million.
For the Senate plan to work, senators said they would have to delay a glitch with the fund that requires it to be refilled nearly immediately if lawmakers use it. However, Gov. Bobby Jindal has said he was concerned about that plan, saying a delay of only a year would worsen the state’s budget problems in upcoming years.
Under the House leadership proposal, Tucker said lawmakers would have to rewrite the complex provision that helps calculate the trigger for when the fund can be used.
Those aren’t the only ideas for how to use the rainy day fund.
Some lawmakers proposed using all $258 million now. Higher education leaders floated an idea to use rainy day fund money in next year’s budget and then replace that money in the rainy day fund with state surplus cash — to meet the requirements for refilling the fund.
Jindal said he supports a budget maneuver that would use $50 million from the rainy day fund to offset some higher education cuts and then replenish the fund with dollars from a planned tax amnesty program. The use of the rainy day fund money could help alleviate the timing concerns of the tax amnesty money that House members agreed to use for colleges.
But Tucker and Appropriations Committee Chairman Jim Fannin said this week that they don’t support using the rainy day fund even as a swap mechanism with tax amnesty money. Their opposition could ensure any plans to use the fund for next year’s budget remain stalled.—-Contact The Daily Reveille’s news staff at [email protected]