BRADENTON, Fla. – Transportation and education funding initiatives confront voters in two of the three Southeast states electing governors in coming weeks.
Voters in Louisiana, Kentucky and Mississippi select governors who will deal with issues that include infrastructure and pension funding.
The stakes are high in Louisiana on Saturday’s ballot where in addition to picking a new governor from among nine candidates, voters will decide on two constitutional amendments designed to help fund more than $12 billion in backlogged transportation needs.
Amendment 1 would split the state’s Budget Stabilization Fund in half, redirecting a portion of its funding from the state’s mineral revenues into a new transportation sub-fund that could add $500 million in new funds for projects.
Amendment 2 would allow the state’s idle cash to be invested in a Transportation Infrastructure Bank.
“These amendments will force state government to make transportation a higher priority without raising taxes,” said Kenneth Perret, president of the Louisiana Good Roads and Transportation Association. “Voters want state government to spend money on basic services, and that means using existing dollars to build and maintain our roads and bridges.”
While there is agreement that Louisiana needs additional funding for roads and bridges, there is resistance to Amendment 1 as opponents argue the measure could jeopardize the state’s bond ratings.
Currently, Louisiana’s policy is to save 4% of available revenues for emergencies and budget shortfalls, though the Legislature can raise the percentage. The account currently has about $511 million.
Amendment 1, if passed, would cap the balance in the state’s rainy day fund at $500 million, and make other changes in the way the fund is tapped and replenished.
The amendment would shortchange the state’s fiscal stability while delivering only a limited amount of new funding to transportation, according to the nonprofit Public Affairs Research Council of Louisiana.
“Just as potential homebuyers must demonstrate to lenders they have the ability to pay their mortgage, states must show lenders they will be able to pay back bonds even if times get tough,” PARC said in a primer on the initiative. “The potential insufficiency of the new stabilization sub-fund could threaten the state’s credit rating.”
Amendment 1 is well-intentioned because the state has large infrastructure needs, said officials with the Council for a Better Louisiana, a statewide nonprofit, nonpartisan civic organization.
CABL, however, has recommended that voters reject the amendment saying that it is wary of “reducing the potential revenues in our rainy day fund and the future risks that would impose to higher education and health care.”
Both Amendment 1 and 2 are necessary to create greater funding options and flexibility for transportation infrastructure projects, argues the I-49 South Coalition, a group that supports extending the interstate along U.S. 90 from Lafayette to New Orleans – an estimated $4.5 billion project.
“These amendments offer sound policy options at a time when additional funding is desperately needed,” said I-49 South Coalition chairman David Mann.
Perret also argued that the approval of both transportation amendments would send a strong message to candidates for governor and legislative seats that voters support funding for transportation projects.
In addition to the transportation-related initiatives on Louisiana’s ballot Saturday, two other amendments on the ballot deal with tax issues that legislators can tackle in their annual sessions and whether states and local governments outside of Louisiana should pay taxes on property they own in Louisiana.
Nine candidates are also on the ballot seeking to replace Gov. Bobby Jindal, who is term-limited out of office and running for the Republican nomination for president.
Republican candidates are Scott A. Angelle, Jay Dardenne, and David Vitter.
Democrats are Cary Deaton, John Bel Edwards, and S. L. Simpson.
Also on the ballot are non-party candidates Beryl Billiot and Jeremy Odom, and Eric Paul Orgeron, who listed his affiliation as “other.”
Louisiana’s large gubernatorial field likely means there will be a runoff on Nov. 21.
In Mississippi, voters will decide whether Republican Gov. Phil Bryant should serve a second term.
Facing Bryant on the Nov. 3 ballot is Democratic challenger Robert Gray, a truck driver.
Magnolia state electors will also decide the fate of two constitutional amendments.
Both of them deal with how public education will be funded in the future.
Initiative 42, the result of a grassroots effort, would amend the Mississippi’s constitution and require the state to “provide for the support of an adequate and efficient system of free public schools.”
If passed, it could lead to lawsuits over adequate education funding.
A Legislative Budget Office fiscal analysis on the ballot said $201 million in additional state funding would be needed to comply with Initiative 42 in fiscal 2016, though the measure’s proponents claim the funding would be phased in over several years.
Also on Mississippi’s ballot is a constitutional amendment proposed by state legislators called “Alternative 42A.” It asks voters if the decision should be left to the Legislature to “provide for the establishment and support of effective free public schools without judicial enforcement?”
The LBO Fiscal Analysis said there is no determinable cost or revenue impact associated with the 42A initiative.
No constitutional amendments appear on Kentucky ballot Nov. 3, though outgoing Gov. Steve Beshear has left decisions on how to resolve a $14 billion teacher’s pension liability to his successor.
Republican Matt Bevin, Democrat Jack Conway, and Independent Drew Curtis appear on the ballot as candidates vying to replace Beshear, a term-limited Democrat.
Bevin, a businessman from Louisville, has said he would like to see state employees and teachers placed into 401(k) plans.
Conway, who is currently the state’s attorney general, said he is waiting for the recommendations of a task force appointed by Beshear to tackle the indebted teacher’s plan, though he opposes the use of pension obligation bonds.
Curtis, a businessman from Versailles, has said he favors making the annual required pension contributions at 110% and using a line of credit as needed instead of bonding.