A former state representative has filed suit against the use of $198 million from Louisiana’s budget stabilization fund to balance the fiscal 2010 budget. The money was taken out of the fund after a dispute between House and Senate leaders over when the money would be repaid.
House Speaker Jim Tucker, D-Terrytown, wanted to reimburse the fund in fiscal 2011, citing a state constitutional provision that requires quick repayment.
The Senate position, which prevailed in the Legislature, said a law passed in 2009 allowed reimbursement to wait until state revenues returned to their post-Hurricane Katrina peak in fiscal 2008.
Kyle Keegan, the attorney who filed the suit in the 19th Judicial Court in Baton Rouge, said the draw on the rainy-day fund violated the state constitution.
“Through these illegal actions, our state government is attempting to avoid its responsibility to balance the state budget through the traditional means of regulating spending and revenue levels,” he said.
Keegan filed the suit on behalf of Ron Gonzalez, who served two terms in the House in the 1980s. Along with the state, other defendants named in suit are Treasurer John Kennedy and Attorney General Buddy Caldwell.
Commissioner of Administration Paul Rainwater said state agencies would be asked to reduce their budgets if the $198 million must be returned to the rainy-day fund. “We are not raising taxes, so if the court rules against this language, we will have a plan in place to make the necessary reductions,” he said.
Oil and gas production taxes flow into the rainy-day fund until it reaches $850 million. At that point the revenues are deposited into the general fund.
