The Louisiana Legislature has significant leeway on when it has to reimburse the state’s rainy-day fund, under a ruling last week from Judge Kay Bates in favor of the state.
If Louisiana had lost, lawmakers would have been forced to resolve a revenue shortfall by the end of fiscal 2012 estimated to be between $150 million and $225 million.
The state constitution requires money taken from the fund to be reimbursed with revenues from the oil and gas production tax by the end of the next fiscal year.
Lawmakers tapped the rainy-day fund for $175 million to balance the fiscal 2010 budget.
However, the Legislature passed a law in 2009 that does not require reimbursement of the fund until oil and gas revenues reached the high level generated in pre-recession fiscal 2008.
House leaders pushed for a quick reimbursement in fiscal 2011 under the constitutional provisions, but Senate leaders and Gov. Bobby Jindal prevailed with their reliance on the statutory requirement.
The judge said the plaintiffs, including former state representative Ron Gomez, did not prove the law was unconstitutional. Gomez’s attorney said the case would be appealed.
The rainy-day fund was created in 1990. When production tax revenues exceed $850 million a year, the money flows into the emergency fund until it reaches a statutory level.
