By Steve Spires
Louisiana voters will find four proposed constitutional amendments on their Oct. 24 statewide primary ballot. None are more consequential than Amendment 1. The goal of this amendment is laudable: to address Louisiana’s chronic backlog of transportation needs. Unfortunately, it would do so by weakening the state’s rainy-day savings account, which would hurt the state’s ability to react to future financial downturns and put vital state services at risk for damaging cuts.
Voters should reject this amendment.
As the name suggests, the Rainy Day Fund (formally known as the Budget Stabilization Fund) is an emergency fund that the Legislature can tap when the state is facing a temporary revenue shortfall—for example, one caused by an economic downtown or a drop in oil prices—to avoid deep cuts to critical services like higher education, public safety and health care. As the Public Affairs Research Council notes, ratings agencies consider the strength of a state’s rainy day fund when assessing its overall financial health and stability. That means weakening the fund could lead to lower bond ratings, which, ironically, could raise the state’s cost of borrowing money for things like transportation projects. Continue reading…