Publisher: Voting on constitutional amendments
Once again we are being asked to change our Louisiana Constitution at the polls. Early voting starts on Oct. 25 and runs through Nov. 1. These matters are often confusing in their language and impact. One of the best sources for information is the PAR Guide (from the Public Affairs Research Council), which you can access at www.parlouisiana.org. Some I feel strongly about. Several have pros and cons and are a close call. Some have loopholes with a two-thirds vote of the Legislature, and others come down to intent and execution. Here’s how I will vote.
Amendment 1. Establishes new requirements for local registrars of voters. YES
As technology grows and professional skills are required, this can raise the bar on qualifications and provide more disclosure and transparency when hiring a registrar. This will outline requirements for all parish positions. That should be a good thing for voters and the process.
Amendment 2. Tuition and fee autonomy to college management boards. YES
Only one state in the nation requires a two-thirds vote of the Legislature to approve a tuition increase. That’s right: Louisiana. But who do you think interacts most often with students and parents (the customers) to understand their situation and goals or works with companies (the employers) on their needs for graduates to enter their workforce? The answer is quite clear: our institutions of higher education.
As a businessman and member of the LSU Board of Supervisors, I am close to this issue. I believe in a free enterprise marketplace and putting the customer first by providing an excellent product at a good value. That formula can succeed whether you are a restaurant or a university. But why would a restaurateur let other people, who meet once a year and are not in the restaurant daily, set his menu prices? He wouldn’t. And for more than 130 years, neither did Louisiana when it came to setting tuition for higher education—but it changed. This amendment would restore that ability and take politics out of the classroom. If higher education must compete in-state and out-of-state, it must control its destiny and control its tuition to maintain quality for students and avoid creating a brain drain to schools in other states.
LSU has a tuition rate that is currently below the Southeastern Conference and Southern Regional Education Board average. The graduation rate and earning potential ranks high, and that is a value people don’t mind paying for. But in a competitive market that now includes four-year, two-year, vocational-technical and online degrees, no college can price themselves out of the market—or they could go out of business. LSU and our other institutions of higher education get it and are better equipped to manage the process. This amendment would allow that to happen and put the management boards, not the Legislature, in charge.
Amendment 3. Eliminates federal income tax deduction for corporations on state tax returns and sets a flat rate. YES
I have always liked the idea of a flat tax since Steve Forbes first mentioned it years ago. While this amendment applies only to corporate taxes for C-corporations, it makes sense. It is consistent and simple. I do understand it will affect some companies differently.
As PAR points out in its guide, “This amendment eliminates one of the biggest corporate income tax deductions while lowering the top rate. As one of just three states that offer a full federal corporate income tax deduction, eliminating the deduction would bring the state in line with standards observed around the country.
“The state’s highest tax rate is currently 8%. That rate is higher than most other states, particularly in the southeast and central regions. Dropping the rate to 6.5% would make the state more competitive at the national level. While 27 other states use a corporate flat tax, just six (Montana, Utah, South Carolina, Florida, Arizona and Colorado) would have lower rates than Louisiana after adoption of the amendment.” PAR also points out, “Eliminating this deduction also distances our corporate tax system from the federal system.” If the feds raise corporate taxes (and who knows what will happen in future), that would increase the deductions here and impact our revenues, too.
I went back and forth, but I still believe “flat is fair.”
Amendment 4. Property tax exemption for surviving spouses of persons killed in the line of duty. YES
This was an easy one for me and I pray would apply to a very small group in our future. PAR says, “The proposed amendment adds another exemption to the state constitution for a surviving spouse of a person who died while on active duty. It applies in cases of death of members of the U.S. armed forces or the Louisiana National Guard or of officers while performing their duties as state police, law enforcement or fire protection officers. The spouse would receive a 100% exemption on the full assessed value of the home.”
This would help them out and apply to their current residence’s value, and they must verify they have not remarried.
Amendment 5. Creates a Revenue Stabilization Trust Fund. YES
Here is another one that is complicated and has arguments pro and con that I struggled with. PAR notes, “Two of Louisiana government’s most volatile sources of funding are mineral revenue and corporate taxes. Unlike steadier sources of revenue like individual income or sales taxes, mineral revenue and corporate taxes can vary wildly. For example, in fiscal (year) 2015 the state brought in more than $1 billion in mineral revenue, but projections for fiscal (year) 2017 predict less than $500 million.”
The point here is that it is hard to rely on these numbers year after year and therefore hard to budget. So this amendment would allocate funds from those sources when they spike above a set amount, and put 30% of the surplus toward the large retirement debt and 70% into a new fund called the Revenue Stabilization Trust Fund. This way, instead of adding new programs from a windfall that would go into the general fund—only to have these revenues decline the next year, requiring cuts—you would save the surpluses for an “emergency.” While I don’t like dedicating more funds, we need to attack our unfunded accrued liability. Unfortunately, emergency situations are not defined and could include budget shortfalls. This is the loophole in the savings account, because a two-thirds vote by the Legislature would permit the funds to be appropriated for any time or any use. But, hey, better to tap the fund than raise our taxes.
Amendment 6. Adjusts threshold for tapping protected funds. NO
PAR explains, “The proposed amendment would add a new trigger letting the Legislature use otherwise protected and dedicated funds. It adds five other funds and trusts to the list of accounts exempted from the present and proposed triggers. It also allows fund balances to be diverted.”
I am not opposed to sweeping accounts if revenues are down and there are more serious priorities facing our state. But there are two things I don’t like. First, this adds a new trigger that could apply even when state revenues increase. The trigger can happen with just a 1% decline in the official revenue forecast. Total state revenues could be up and we are still tapping these dedicated funds. In addition, the amendment locks up five more funds, limiting flexibility—an issue Louisiana has struggled with for decades.
Four schools in Baton Rouge were honored as Blue Ribbon Schools of Excellence by the U.S. Department of Education. Three of the honorees were Catholic schools, including St. Joseph’s Academy, St. George and St. Thomas More. The other school named was Madison Preparatory Academy, a charter school opened in 2009.
Congratulations to these schools for serving children so well.