BATON ROUGE, La. (AP) - Lawmakers want to steer Gulf oil spill recovery money to help refill Louisiana’s “rainy day” fund and an elderly trust fund that was raided to fill budget holes.
The plan taps into dollars that BP PLC is expected to pay for the state’s claims of economic damage caused by the massive 2010 spill. Those claims are the subject of ongoing federal litigation, and it’s unclear when any of the money might be available to the state.
The House gave final passage Friday to the budget bill that contained the plans for the recovery money, sending it to Gov. Bobby Jindal for consideration. The governor had proposed using the dollars for the rainy day fund, which is the state’s savings account, but not the other items on the list.
The bill would use up about $1 billion from an economic damages award. Any dollars beyond that could be spent on other items.
The plan to refill the rainy day fund was devised by Sen. Sherri Smith Buffington, R-Keithville, in amendments to a bill by Rep. Jim Fannin, R-Jonesboro.
“I thought it was good fiscal management of the BP dollars that would come in a future settlement,” said Fannin, chairman of the House Appropriations Committee.
Senate Finance Committee Chairman Jack Donahue objected to carving up the money.
“The money’s going to come in, and we’re going to have no options because we will have given it all away,” Donahue, R-Mandeville, told senators Thursday.
But he was unable to persuade his colleagues.
Billions of dollars in civil penalties expected to hit BP because of violations of environmental laws have strings attached in both federal and state statute, requiring the money to be spent on coastal protection and restoration projects.
But no such restrictions exist for money Louisiana is expected to receive for damages to its economy because of the massive disaster.
Of the economic recovery money:
-45 percent would go to the rainy day fund until that savings account reaches its cap, of which it is about $300 million short.
-45 percent would go to the Medicaid Trust for the Elderly, up to $700 million.
-10 percent would go to the Health Trust Fund, up to $30 million.
The rainy day fund was tapped twice in recent years to help close state budget gaps. Constitutional restrictions require the dollars to be quickly repaid after being used. Refilling it would help settle an outstanding lawsuit seeking repayment for prior uses.
The elderly trust fund contained more than $800 million when Jindal took office, but it will be nearly empty by 2015, most of the money used to plug budget gaps. Creators of the fund expected the state to leave the principal intact and mainly use interest and investment earnings, so the trust fund would provide a stream of funding for decades.
The Health Trust Fund is designed in a similar fashion, with its interest and investment earnings used to pay for health care programs for indigent care.
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Online:
House Bill 1026 can be found at www.legis.la.gov
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