Establish a “Construction Subfund” within the state’s Transportation Trust Fund to contain any new fuel tax revenue, which could not be used for state employee benefits or wages.
Continue to allot all revenue from fuel taxes, including any new fuel taxes, into the Transportation Trust Fund.
To ensure that state gas tax dollars would go to transportation projects, the Transportation Trust Fund (TTF) was created with constitutional protections in 1990. Money in the Trust Fund can be used only for the costs associated with construction and maintenance of roads and bridges, flood control, ports, airports, transit, and state police for traffic control purposes. A portion is also set aside for local governments through the Parish Transportation Fund. In 1990, the Louisiana Legislature requested and received a legal opinion from the Attorney General stating that “…salaries and related benefits of employees of DOTD whose work is directly related to highway programs or other programs may be funded out of the [TTF], and the necessary administrative costs associated therewith.”
Following the 1990 Attorney General opinion, each year the Louisiana Legislature has utilized the Trust Fund to finance state transportation department employee salaries and benefits. Also since its establishment, the Trust Fund has intermittently been used by the Louisiana Legislature to fund the Louisiana State Police at an amount totaling approximately $750 million over the years. These longstanding legislative actions have, in recent years, prompted critics of state road spending practices and trust fund diversions to claim there is not much “trust in the trust fund.” Consequently, in 2015, the Legislature capped Trust Fund allocations for the State Police at $10 million annually. In 2016, The Legislature did not use the Trust Fund to support State Police. During the recent failed effort in the Legislature to increase in the state fuel tax, critics claimed that more accountability was needed on how new funds would be spent before the state should increase its revenue for transportation and infrastructure.
This amendment would require any new taxes on gasoline, motor fuels or special fuels to flow into a “Construction Subfund”, which would be part of the Transportation Trust Fund. Money in this subfund would be used specifically for the delivery, construction and maintenance of transportation and capital transit infrastructure projects of state and local governments. The subfund prohibits the Department of Transportation and Development from using any revenue generated from new taxes for employee wages and benefits, including retirement benefits. However, this restriction does not necessarily include paying engineers and other workers compensation for work dedicated specifically to project delivery.
Almost everyone agrees Louisiana needs better infrastructure. The state has an estimated $13.1 billion backlog of needs on its existing transportation system and another $10 billion worth of major megaprojects that would increase the size and scope of the system. This amendment will provide more confidence to taxpayers by guaranteeing that future new tax dollars will be used on more projects and not administrative overhead. While this amendment does not raise money for infrastructure itself, it may raise confidence in the state construction process and paves the way for future efforts to put more dollars into transportation. If this amendment, or something like it, does not pass, then solutions to our infrastructure needs would be unlikely in the foreseeable future.
This amendment is a symbolic gesture that does nothing to improve the poor condition of the state’s transportation system. It creates a fund with no funds. More specifically, the amendment does nothing to prevent the Legislature from again choosing to fund State Police with Trust Fund dollars in the future, although current law caps the amount. If new fuel tax revenue is approved in the future, this fund mechanism will not work because the Legislature and administration still can move funds around in the budget process to meet their priorities. Increased employee costs will just be borne by the regular Trust Fund dollars that will not be placed in the subfund. A more direct way of restoring trust would be to ensure the transportation department runs efficiently and that the agency demonstrates that to voters before asking for additional taxes. Also, dedications of state tax proceeds, which limit state budgeting flexibility, are a recurring problem in the Louisiana Legislature. The creation of a transportation subfund further constitutionally dedicates state taxes, and in this case represents a dedication within a dedication.
Legal Citation: Act 429 (House Bill 354 by Rep. Thibaut) of the 2017 Regular Session amending Article VII, Section 27(B).