Amendment 4 On The 2020 Louisiana Ballot: What To Know About State Budget Spending

Oct 16, 2020
Originally published on October 14, 2020 12:55 pm

Here’s the language you’ll see on the ballot:

“Do you support an amendment to allow for the use of the Budget Stabilization Fund, also known as the Rainy Day Fund, for state costs associated with a disaster declared by the federal government?”

How would it work?

The Budget Stabilization Fund, or Rainy Day Fund, is a pot of money the state can use to fill budget holes when the state brings in less revenue than expected. The fund has been around since 1990, and the legislature has put a number of safeguards in place to make sure that it is only used for its intended purpose. State lawmakers are not allowed to take more than the projected deficit or more than one-third of the total fund balance, and they can only use the money if two-thirds of the House and Senate agree.

If adopted by Louisiana voters, this amendment would allow state lawmakers to draw down the fund to swiftly respond to a federally declared disaster — before the state could receive disaster aid from the federal government. Once that federal relief money arrives, the state would have to replace whatever it took out of the fund. All of the other rules on withdrawal limits and legislative approval would still apply.

Who’s for it and who’s against it?

Louisiana experiences a lot of natural disasters. That simple fact is the basis for arguments for, and against, this amendment.

Supporters say this change would give the state the flexibility it needs to alleviate Louisianans’ suffering as quickly as possible when hurricanes strike or floodwaters rise.

Rep. Gary Carter (D-New Orleans) sponsored the amendment and companion legislation.

“It is to allow the state of Louisiana to stand itself up in a federally declared emergency and not wait for FEMA [the Federal Emergency Management Agency] or the federal government, or anyone else to bail us out,” Carter said.

But opponents point out that the federal government’s reimbursement process can be long and complicated, which could leave the state with a low rainy day fund balance in the interim. That could leave state services vulnerable in the event of a recession and could hurt the state’s bond rating, increasing the cost of long term construction projects.

To learn more about what's on your 2020 ballot, check out our ballot guide.

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