Constitutional convention only helps future budgets, PAR says
Lately, several public officials have pointed to a constitutional convention as the solution to the state’s budget woes. While constitutional revision is in order to correct some of the longstanding problems with state government, a full rewrite or even limited revision will do nothing to help balance the budget for the upcoming fiscal year.
Louisiana budget makers seem to have been caught off guard by the convergence of falling oil and gas prices, increased spending and the tax breaks they recently granted. The state’s dependence on volatile oil and gas revenue has increased from around 8 percent in 1999 to around 16 percent for the current fiscal year. The state is now facing a revenue decline of around $1.3 billion for the upcoming fiscal year. Budget makers complain that the protected expenditures in the budget make it difficult to spread the cuts equitably. Many of those protections are in the Constitution.
The majority of the expenditures deemed cuttable in the budget are for higher education and health care. Higher education and health care officials recently have presented lists of professors who will have to be fired and hospitals that will have to be closed if the projected cuts must be made.
Almost 60 percent of the protected expenditures are for elementary and secondary education. Even in times of extreme revenue shortfalls when other protected expenditures can be cut up to 5 percent, the elementary and secondary education fund can only be cut 1 percent. This special treatment is established in the Constitution and to change it would essentially pit this type of education funding (called Minimum Foundation Program, or MFP) against higher education and health care for the poor. Readjusting those priorities would be a tough task, which raises the question:
- Should the MFP funds face budget cuts to the same degree as all other items in the state budget?
Answers to this and many other difficult issues would have to be proposed well in advance to justify the cost of a constitutional convention. Louisiana’s current Constitution was adopted in 1974 and the process leading up to ratification lasted around three years, including pre-convention research time and the year-long convention proceedings.
The 1974 Constitution has been amended 153 times. PAR has repeatedly called for a convention to restore the Constitution to its role as a statement of basic law. However, it should be emphasized that a constitutional revision would provide no solution to the state’s current fiscal crisis and likely would not have any impact on at least the next two to three years of budget-making. Moreover, without a fully developed agenda for change that addresses all of the most controversial issues, a constitutional convention could lead to more problems than it solves.
While not an immediate fix, constitutional revision is the only way to achieve a complete overhaul of state government that includes its operation, organization, tax structure and relationships with local government. There are two paths to revision: a constitutional convention for a full rewrite or piecemeal revision through separate amendments proposed by the Legislature.
Regardless of the approach taken, some key questions must first be addressed to develop a comprehensive agenda to guide the revision efforts:
- Which budgetary dedications should be removed?
- How can the state achieve a broad-based, balanced, fair and growth-oriented state tax structure?
- How can the state grant greater fiscal flexibility to local governments?
- How can the state achieve a more streamlined state organizational structure?
- Should there be fewer elected state and local officials?
- How can the state improve governance of higher education?
- Should a more restrictive amendment procedure be established?
In 2003, a PAR white paper recommended that the incoming administration engage in the necessary study to answer these questions and develop an agenda for a constitutional revision. Neither that administration nor the current one has undertaken the task. A constitutional revision study might yield a set of recommendations that would be best handled with individual amendments rather than a full constitutional convention.
From study to ratification, the process of writing a new constitution is likely to span at least three years. Now is as good a time as any to begin the process, but no one should be fooled into thinking that this is a serious proposal to deal with the current fiscal crisis unfolding. To call for a constitutional convention now in the midst of an immediate fiscal crisis is merely a diversion from the very difficult and complex issue at hand.