With less than two days to go until this year’s regular session comes to a close, lawmakers are still mulling over a proposed constitutional amendment that would dedicate future surpluses to paying down the state’s retirement debt. The Senate voted 30-2 Tuesday to give the legislation a final hearing, and the House is expected to vote on it today. House Bill 384 by Rep. Kevin Pearson, R-Slidell, and Sen. Butch Gautreax, D-Morgan City, is designed to address the state’s unfunded accrued liability. The two men serve as chairmen of the House and Senate retirement committees. They’re targeting a debt that has surpassed $18 billion and is spread out over four retirement systems.
The constitutional amendment would work by channeling 5% of all surpluses into the UAL beginning July 1, 2015. In 2016, the threshold would be increased to 10%. Some lawmakers oppose the idea of taking surplus dollars away from other needs. Under current law, nonrecurring dollars—surpluses, in this case—can be used for paying down UAL debt, funding capital construction projects, retiring bonds, making deposits into the so-called rainy day fund, and funding certain highway projects as well as coastal protection and restoration efforts.
During Tuesday’s floor debate, Gautreaux offered a response that reveals the basic rationale of the bill. “One of the most important concepts of money management is, you that pay off your debt first before you spend your money on other things,” he says. —Jeremy Alford
