02 June 2008

Committee action, Jun. 2: HB 703, HB 709, SB 796

HB 703 would amend the Constitution to take a quarter of funds above the ceiling established for mineral revenues and instead of sending it to the Budget Stablization Fund send it to coastal restoration fund. Author Rep. Damon Baldone said little money was going to come from the federal government for years so this would get the restoration process much more quickly.

House Appropriations Committee chairman Rep. Jim Fannin cautioned this would be a diversion of funds around $300 million from the latest surplus and hamstring it to this purpose. Rep. Joe Harrison argued the coastal part of the state contributed much to the state and that this would be good legislation to preserve it. But Rep. Mert Smiley said the state had many needs and needed the flexibility, plus it had shown sufficient commitment with previous actions and legislation.

Baldone then asked to defer this bill, cautioning this needed to be addressed and the state needed to put its money where its mouth is on the issue. He then brought forward HB 709 which would not take a quarter off of a top but would after the $750 million ceiling put into the Fund. He pointed out this was less onerous on revenues but also asked for its deferral.

SB 796 would change the way the state’s debt ceiling debt is computed by removing from its calculation dedicated revenues to paying off debt, which practically speaking would exempt expenditures for the TIMED program. Author Sen. Joe McPherson told the House Ways and Means Committee that while on a yearly basis it didn’t take up much bonding power (particularly because it has an offsetting revenue stream included), it made statistics in terms of per capita debt look higher than what McPherson called “accurate,” leading to explotation by what he termed “irresponsible reporters.” It would cut the per capita figure by half.

Chairman Rep. Hunter Greene wondered by “debt was being excluded from debt.” McPherson said it was ability to repay that was important, not the total amount. Greene said this was supported by tax dollars just like any other debt, and compared the semantics used by McPherson to “gaming” vs. “gambling.” McPherson said the change would force the media and some politicians from exploiting the issue and over time this debt was going to increase because of the TIMED program that would make it look even “worse.” Greene felt his testimony alone performed a good educative function, and maybe statistics ought to be reported to reflect that.

Rep. Cameron Henry wondered whether this was a way to allow more debt than what is currently intended, which could lower the bond rating of the state. McPherson said the marginal nature of it he wouldn’t think would do that.

Rep. Joel Robideaux queried why the bill’s information was on different colored paper. He also asked whether future statewide dedicated debt approved by voters would fit into this new category that is excluded, and McPherson said it would. Rep. Harold Ritchie said he would like to see an amendment on the revenue side that would parcel out money coming from state sources and from federal sources, but did not offer anything.

When the time came for it to move, Greene said it would increase capacity for debt and he was opposed that, and also the media would pick up on this. The bill passed 8-6 with Reps. Carter, Danahay, Guillory, Honey, Perry, Richard, Ritchie, and Robideaux in favor, while Baldone, Burrell, Henry, Hoffman, Smith, and Greene were against.

“I’ve spent an entire career wearing out blue jeans’ knees trying to borrow money from banks.”

TUESDAY: HB 1357 is scheduled to be heard by the Senate Judiciary B Committee.

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