HOUSE committee amendment technical

Proposes to establish a "Government Growth Limit" to control the appropriation of recurring State General Fund (Direct) revenues.

Key provisions:

1.    Establishment of the Growth Limit:

·       The Revenue Estimating Conference (REC) must set the growth limit each year, no later than the first quarter of the calendar year, for the upcoming fiscal year.

·       The Commissioner of Administration is responsible for calculating the growth limit and submitting it to the REC for review and adoption.

2.    Calculation of the Growth Limit:

·       If the growth factor is positive, the growth limit is calculated by adding the base amount to the product of the base and the growth factor.

·       The growth factor consists of:

o  The average annual percentage change in Louisiana’s population over the past five years.

o  The average of two indicators over the same five-year period:

§ The average annual percentage change in the chained consumer price index (CPI) for the U.S.

§ The average annual percentage change in the chained consumer medical care price index for the U.S.

·       If the growth factor is negative, the growth limit remains equal to the base amount.

·       The base amount is the total recurring State General Fund (Direct) appropriations from the most recent full fiscal year, not including any amounts appropriated under the specific exceptions outlined in this bill.

3.    Appropriation Restrictions:

·       If the official revenue forecast shows recurring revenues that exceed the growth limit but remain under the constitutional expenditure limit, the excess can only be used for nonrecurring expenses.

·       Nonrecurring expenses are defined as those that are not ongoing or permanent.

In summary, this bill creates a cap on how much the state can grow its recurring spending, based on population and inflation metrics. The goal is to ensure recurring expenditures do not grow faster than the state’s ability to sustain them, promoting fiscal discipline.

CONSTITUTIONAL AMENDMENT Government Growth Limit companion

Proposes a constitutional amendment to modify Louisiana's financial management practices. The bill aims to establish a "Government Growth Limit," which would restrict the amount of State General Fund (Direct) revenues that can be appropriated for recurring expenses in a fiscal year. Any recurring revenues exceeding this limit would be designated exclusively for nonrecurring expenditures.

Key Provisions:

1.    Establishment of the Government Growth Limit: Starting with the 2027-2028 Fiscal Year, the Revenue Estimating Conference is tasked with setting this limit annually during the first quarter of the calendar year for the upcoming fiscal year. The legislature is responsible for defining the procedures for calculating and applying this limit.

2.    Allocation of Excess Recurring Revenues: Recurring revenues that surpass the Government Growth Limit but remain below the overall expenditure limit can only be appropriated for nonrecurring expenses. Nonrecurring expenses are defined as those that are not ongoing or expected to recur annually in similar amounts.

3.    Legislative Authority to Adjust the Limit: The legislature retains the power to modify the expenditure limit for any fiscal year with a two-thirds majority vote in each house. Such changes must be enacted through specific legislation that clearly indicates the intent to alter the limit.

The proposed amendment seeks to promote fiscal responsibility by capping the growth of recurring expenditures and directing surplus recurring revenues toward one-time investments or obligations, thereby aiming to ensure a more sustainable financial future for the state.

YES!!

Proposes changes to the Louisiana state appropriations process concerning nongovernmental entities (NGOs). The bill aims to prohibit including appropriations for NGOs within the General Appropriation Bill, capital outlay bill, or any appropriation bill that contains funding for a budget unit or political subdivision of the state. Instead, such appropriations would need to be made through separate bills dedicated solely to NGOs.

Currently, NGOs seeking state funding must submit specific information to legislative committees by November 1 each year. Late submissions may be considered if approved by the Joint Legislative Committee on the Budget or the Joint Legislative Committee on Capital Outlay before the final introduction date for new legislation. House Bill No. 309 maintains these requirements but stipulates that appropriations for NGOs cannot be included in bills funding state budget units or political subdivisions.

If enacted, this bill would take effect on July 1, 2025.

Proposes to reduce Louisiana's state sales and use tax from 5% to 4% by repealing the 1% levy established under R.S. 47:321.1. The bill includes amendments to various statutes to align with this repeal and directs the Louisiana State Law Institute to update references accordingly. If enacted, the legislation would take effect on July 1, 2025.

Starting July 1, 2025, state budget bills cannot include funding for nongovernmental entities unless handled separately from funding for state agencies or political subdivisions. These entities must submit a funding request form by November 1 each year. Late requests need approval from the Joint Budget or Capital Outlay Committee before the filing deadline.