ATLANTA -- Louisiana voters have overwhelmingly approved a constitutional amendment to cap state debt issuance at about $250 million a year.
Five other amendments were also strongly endorsed by voters last Saturday. Four of these, like the debt limitation measure, place new controls on the state's management of its finances.
Constitutional Amendment 2, which passed by a 71% margin, limits issuance of tax-supported state bonds in Louisiana to an amount that can be serviced by 6% of state revenues, excluding federal aid. The state will have until fiscal 2004 to bring its debt load into proportion with the limit. The debt limit percentage could be waived by a two-thirds vote in both houses of the Legislature.
The law grants constitutional status to a debt limitation statute passed last summer. But unlike the legislation, the constitutional amendment does not contain year-by-year issuance guidelines or a definition of bonds covered.
State Treasurer Mary Landrieu, who campaigned throughout Louisiana this summer in support of the measure, hailed the vote.
"I'm thrilled that the amendment passed, and the state is now constitutionally on a debt diet," Landrieu said yesterday in a telephone interview. "But that is only one part of the battle. We must also maintain the integrity of the statutory definition of tax-supported debt -- and as far as I am concerned, this means that if general fund money is being used to back bonds, they fall under the cap."
Under the bill passed this spring, tax-supported state debt is defined as Louisiana general obligation bonds, debt secured by capital leases payable by the state, or debt backed by statewide tax revenue.
According to Landrieu, the state currently spends about $700 million a year -- about 13% of nonfederal revenues -- to cover debt service on more than $4 billion of tax supported bonds.
Of the other five amendments, three will have a direct impact on the state's debt level.
Amendment 4 provides that all one-time revenues coming to the state must be used to retire state bonds. Amendment 4 also prohibits lawmakers from using such funds to cover recurring expenditures.
The state's Revenue Estimating Conference, comprised of budget officials from both the Legislature and the governor's office, will have the final say on what constitutes a one-time revenue.
Amendment 3 mandates feasibility studies for all projects involving capital outlays, and changes the method of calculating the state's spending limit.
Amendment 5 forces Louisiana's governor to report debt service payments for capital projects in his annual proposed budget.
Each of the other two other amendments will also affect the state's finances.
Amendment 1 requires the legislative session in even-numbered years be devoted solely to fiscal topics. The sessions, which can only consider money bills and capital spending, will be limited to 30 days within a 45-day period. No tax measures can be considered during session held in odd years.
The measure also includes a number of provisions to reduce legislative logjams, including a cap of five proposed bills from any legislator once a session begins, and deadlines for filing bills.
Supporters of Amendment 1 have contended that the measure would force lawmakers to be more efficient and reduce the cost of legislative sessions. Opponents have complained that the measure would create inconveniences for legislators and force more special sessions.
Gov. Edwin Edwards, who opposed Amendment 1, said Monday that he might call a special session on crime next year.
"As the months unfold, there are things going to happen requiring legislative approval that can't wait 18 months to two years," Edwards said at a press conference.
He said that the amendment "will contribute to a larger number of special sessions."
In Louisiana, the governor can call a special session at any time.
Amendment 6 extends the state's $75,000 homestead exemption to cover owner-occupied mobile homes and condominiums.
About 20% of eligible state voters participated in the referendum, according to state officials.