Local officials back Amendment #4, one of seven on ballot

Deidre Cruse

The Iberville Parish Council went on record last week backing proposed Constitutional Amendment #4, which would give the parish government a much larger portion of severance funds collected by the state.

“This is not a new tax,” said Parish Finance Director Randall Dunn as he proposed the resolution.

“This is a reallocation.”

The proposed amendment to the Louisiana Constitution of 1974 is one of seven that will be on the ballot Tuesday.

Dunn said the parish currently gets up to $850,000 a year from the state for severance taxes collected on natural resources produced in the parish. The proposed amendment would increase that amount to $1.85 million next year and then to $2.85 million a year in 2010 and thereafter.

State Sen. Robert Marionneaux, who also spoke in support of the amendment, told the Parish Council that half the additional funds would have to be dedicated to the parish’s transportation fund, with the other half spent as the council chooses.

Marionneaux also said the amendment includes a provision added by state Rep. Karen St. Germain for 50 percent of the severance tax collected on state-owned lands in the Atchafalaya Basin to be spent on water quality projects. The new Atchafalaya Basin Conservation Fund would be capped at $10 million, he said.

“The money must be spent on water quality projects,” the state senator said, not on boat launches or similar projects. He said it would allow 15 percent of the fund to be used to finish construction projects that have already been started. “Once that is maxed out, it will be capped at five percent for administration.”

Marionneaux said that, as a congressman, Gov. Bobby Jindal had argued for oil royalties to go to the State of Louisiana.

“This does the same thing for the Atchafalaya Basin,” he said. “The Atchafalaya Basin should be reserved for generations to come.”

In its “Guide to the Constitutional Amendments,” the Public Affairs Research (PAR) Council analyzed all seven proposals that will be on Tuesday’s ballot.

Here is how PAR summed the amendments up:


Term Limits for Boards and Commissions

?A vote for would impose term limits for members of certain boards and commissions.

??A vote against would continue to allow members of certain state boards and commissions to be elected or appointed for an unlimited number of terms.

A few of the more than 500 appointed boards and commissions in the executive branch already have term limits. This amendment would impose a limit of three consecutive terms on members appointed to the Public Service Commission, the State Board of Elementary, the Board of Regents for higher education, the Board of Supervisors for the University of Louisiana System, the Board of Supervisors for LSU, the Board of Supervisors of Southern University, the Board of Supervisors of Community and Technical Colleges, the Forestry Commission, the state Civil Service Commission and the State Police Commission.

“Proponents argue that entrenched board and commission members tend to favor the status quo and would be a barrier to reform,” the research organization said. “They argue that term limits encourage diversity of perspectives in public service.”

Opponents argue that selection processes already in place can prevent problems associated with consecutive terms of service.

“They argue that board service often requires development of specialized knowledge that takes a long time to acquire and should not be set aside for the sake of an arbitrary term limit,” PAR said.


Time Limits for Calling

Special Sessions

??A vote for would require that the call for a special legislative session be issued at least seven days prior to the start of the session.

??A vote against would continue the requirement that a call for a special legislative session be issued at least five days prior to the start of the session.”

By adding the two calendar days, PAR said, “the proposed amendment would eliminate confusion over whether days must be counted by calendar days or by 24-hour periods.” There still would be no required timeline for a public announcement of a special session.


Temporary Successors

For Legislators Ordered

To Active Military Duty

??A vote for would allow the Legislature to appoint a temporary successor for any legislator called to active military duty that prevents the performance of the duties of office.

??A vote against would continue to require districts to be without representation in the case of their elected legislator being called away to active military duty and refusing to resign.

The Legislature currently has one member at risk of being called to active military service. Unless he resigns and a special election is called to replace him, his district would be without representation during his absence. The situation has only arisen once in the past 36 years, when a legislator was called to duty during the Gulf War.

“This amendment is proposed to address that rare situation,” PAR said.


State Severance Taxes

To Parishes

??A vote for would dedication additional severance taxes to parishes of origin, restrict the use of a portion of these funds and dedicate a portion of severance taxes collected on state lands to the Atchafalaya Basin Conservation Fund.

??A vote against would maintain the maximum amount of severance tax revenue that has to be paid by the state to parishes at $850,000, adjusted annually for inflation.

“Proponents argue that boosting the cap above the rate of inflation is justified by the recent spike in state severance tax revenue,” PAR said. “As prices and production rise, parishes should get to share the windfall, they argue. Severance tax is likely to rise further in coming years as production increases in the Northwest Louisiana due to the recent Haynesville Shale natural gas strike.

“Opponents of the proposal question the need for the state to give up more revenue to benefit parishes that already receive other revenue from the economic activity associated with severance operations, like jobs and sales taxes. If mineral resources are considered assets of the state as a whole, then dedication prevents the state from using its revenue where most needed.”


Transfer of Special

Property Tax

Assessment Level

??A vote for wold allow homeowners to transfer any special property tax assessment level to their new homes when their property is sold to or expropriated by the state, federal or local government.

??A vote against would continue to prohibit the transfer of special property tax assessment levels to new properties.

The Constitution gives a special property tax break to homeowners who are 65 or older, who are permanently and totally disabled, and certain members of the military and their surviving spouses.

The proposed amendment would allow such a homeowner to transfer the special assessment to a replacement home unless the fair market value of the new home exceeds 200 percent of the fair market value of the home sold or expropriated by the government. The new home would have to be acquired no later than 24 months after the expropriation or sale is final.


Re-Sale of Certain

Expropriated Property

?A vote for would remove the requirement that public authorities first offer expropriated property back to its prior owner before the property can be sold to a third party if the property was taken to remove a threat to public health or safety and we held for less than 30 years. It also would remove the requirement for that property to be sold by public bid and eliminate the opportunity for certain property owners to challenge surplus takings.

??A vote against would maintain the same re-sale requirements for property taken to remove a threat to public health and safety as for property taken for other public purposes.

The right of first refusal provision was added to the constitution by an amendment in 2006.

Redevelopment officials contend the 2006 amendment had the unintended effect of hampering the sale and redevelopment of blighted property by requiring the first right of refusal and a public bid offering. The requirements have hampered the post-Katrina redevelopment goals of the New Orleans Redevelopment Authority (NORA), which wants to repackage individual properties for sale as a larger unit to a specific developer.

“Proponents of the amendment, including officials representing other storm-affected parishes besides Orleans, argue that these changes are necessary for recovery,” PAR said.

“Opponents counter that property rights are fundamental and should continue to require the government to give the original owner and others an opportunity to repurchase their property – no matter why the property was originally taken. The exclusion from existing protections of property labeled as blighted has the potential to unfairly impact lower-income property owners.”


Investment of Non-Pension

Benefit Trusts

??A vote for would allow public funds reserved for non-pension, post employment benefits to be invested in stocks.

??A vote against would continue to prohibit public funds reserved for non-pension, post-employment benefits from being invested in stocks.

With a few exceptions, the Constitution prohibits the investment of state funds in stocks.

A post-employment benefit trust provides retirees’ health care, life insurance or any other benefit other than pension payments. The Government Accounting Standards Board is now requiring that the benefits be treated like other pension benefits.

“Proponents of the change argue that to create a long-term asset, the trusts must be established and invested in such a way that they would likely grow at a fast pace,” PAR said. “The investment options currently allowed for such funds prohibit appropriate growth. If this amendment fails, they argue, many parish governments may have to choose to discontinue benefits rather than list unfunded liabilities.”

“Generally, opposition to investment of public funds in equities stems from an unwillingness to take on additional risk. Active management of the investment portfolio would be allowed. This is often touted as a safeguard against additional risk.”