Recommendations on amendments posted Wednesday, October 5th, 2011 @ 12:38 pm  E-mail Story |  Print Story  Voters throughout Louisiana will decide the fate of five constitutional amendments in the Oct. 22 election. Early voting for the Oct. 22 primary begins Saturday, Oct. 8 and will conclude Saturday, Oct. 15. Though closed Sunday, Oct. 16, early voting will be conducted from 8:30 a.m. – 6 p.m. each day. With early voting scheduled to begin Saturday, here is a breakdown on each proposed constitutional amendment that will appear on the Oct. 22 ballot. Our recommendation on each amendment is offered as well. Amendment No. 1: This amendment would take annual tobacco settlement payments made to the Millennium Trust and redirect them to the Taylor Opportunity Program for Students (TOPS). The change would affect revenues -- $40 million to $45 million per fiscal year – received after April 1, 2011. The proposed amendment would allow TOPS to receive roughly $80 million in payments from the tobacco settlement during the current fiscal year and single payments in subsequent fiscal years. The intent of the amendment is to provide a stable source of income for TOPS, which has evolved into a financial burden for the state general fund. This proposed constitutional amendment also would make permanent a 4-cent per pack tax on cigarettes. The 4-cent tax is scheduled to expire next year. Proceeds generated by the tax would be used to help finance healthcare expenses incurred by the state. The proposal would not affect a separate 32-cent per pack tax on cigarettes. We feel the Legislature needs to work toward controlling the costs of the popular TOPS program before lawmakers ask the people to constitutionally commit scarce tax dollars to help finance it. Also, it is unconscionable to us to amend the constitution to make permanent any tax under any circumstances, regardless if the tax could be interpreted as a deterrent to cigarette smoking. Accordingly, we recommend a NO vote on Amendment No. 1. Amendment No. 2: This amendment would require that a certain percentage of nonrecurring state revenues be used to pay down the pre-1988 unfunded accrued liability (UAL) for the Louisiana State Employees' Retirement System (LASERS) and the Teachers' Retirement System of Louisiana (TRSL). The Budget Stabilization Fund would continue to receive the first 25 percent of nonrecurring revenues until the fund's cap is reached. The cap in fiscal year 2011 was $801.4 million. In fiscal years 2014 and 2015, the Legislature would be obligated to appropriate at least five percent toward the UAL of LASERS and TRSL. In fiscal year 2016 and every fiscal year thereafter, the Legislature would be obligated to appropriate at least 10 percent of nonrecurring revenues to the UAL. Those payments would be in addition to the regular payments the state makes each year toward the UAL. The amendment prohibits the additional payments from being used to pay for cost-of-living increases for either retirement system. It is worth noting that LASERS and TRSL are two of the four retirement systems the state operates. The other two are the Louisiana School Employees' Retirement System (LSERS) and the Louisiana State Police Retirement System (STPOL). LASERS and TRSL accumulated unfunded accrued liabilities for years, and in 1988 the state embarked on a path to pay down the accrued debt through annual payments that escalate as each year passes. About $9.45 billion is still owed on the pre-1988 UAL, but the retirement systems have accumulated additional unfunded liabilities since 1988 because of actuarial losses, market losses, interest on debt and cost-of-living adjustments. In fiscal year 2011, the state will spend more than $700 million to meet the obligations for LASERS and TRSL. By 2028, the state will spend about $1.8 billion to meet the two retirement systems' obligations. In other words, LASERS and TRSL represent a financial drain on the state treasury, and the situation will only worsen over time. We recommend a YES vote on Amendment No. 2. However, the Legislature must face the reality that the state cannot sit idly by and allow the retirement systems – all four of them – to continue operating as they do today. Changes must be made in collecting monies to fund the retirement systems, but more importantly, the Legislature must rein in the benefits the retirement systems will pay out in the future. Amendment No. 3: This amendment would make it crystal clear that the Legislature is forbidden from taking monies that are deposited into the Patient's Compensation Fund. The fund was established by the Legislature in the mid-1970s to offer affordable medical malpractice insurance coverage for qualified healthcare providers. It also provides a source of monies to pay legitimate claims of injury due to medical malpractice. No state revenues are appropriated for the Patient's Compensation Fund. The fund is financed strictly by qualified healthcare providers, who pay into the fund annually. Under state law, qualified healthcare providers must carry malpractice liability insurance or be adequately self-inured to cover the first $100,000 in liability. They also must pay an annual surcharge to the Patient's Compensation Fund for coverage of any additional liability. Today, that fund's balance stands at about $676 million. In recent years, we have witnessed the Legislature lift self-generated monies from state agencies to balance the state budget. Though the Legislature has never attempted to raid the Patient's Compensation Fund, it most likely is only a matter of time before lawmakers view the fund as a source of additional revenue to aid the Legislature in adopting a balanced budget. Amendment No. 3 would prohibit it. That's why we recommend a YES vote for Amendment No. 3. Amendment No. 4: This amendment concerns managing the state's Budget Stabilization Fund, also better known as the "Rainy Day" fund. Established some 20 years ago, the Rainy Day fund was created by the Legislature to help stabilize the budget over time. When the state enjoys a nice budget surplus or some other windfall, some of the revenue is directed to the Rainy Day fund to prevent the Legislature from spending it on ongoing state expenses or increasing the size of the budget. The Rainy Day fund also serves as a savings account for lawmakers to tap in times of tight finances. Currently, the state is being sued over a statute approved by the Legislature in 2009 that attempted to clarify when monies taken from the Rainy Day fund must be repaid. The statute allowed for the repayment of Rainy Day monies over time. Opponents of the statute say any Rainy Day monies used by lawmakers must be repaid in the same year that the monies are withdrawn from the fund. Amendment No. 4 would allow the Legislature to structure repayments of monies taken from the Rainy Day fund over a period of time, beginning during the second fiscal year after the monies are withdrawn from the fund. The payback would be spread out in payments of one-third each year until monies withdraw from the Rainy Day fund are fully repaid or until the Rainy Day fund reaches its statutory cap. We recommend a YES vote on Amendment No. 4. Amendment No. 5: This amendment is a housekeeping matter that deals solely with the City of New Orleans. The amendment would alter the constitution to identify the City of New Orleans by name, and it would remove the state constitution's indirect reference to a municipality with a population of more than 450,000. We recommend a YES vote on Amendment No. 5.