LOUISIANA HOUSE OF REPRESENTATIVES Ways and Means, Chairman Joint Legislative Committee on Capital Outlay, Chairman Email: ilolm Legi5l3tiVe Committee Phone: 337.984.1091 on the Budget Fax: 337.984.8987 State Bond Commission JOEL C. ROBIDEAUX State Representative District 45 102 Woodvale Avenue, Suite Lafayette, LA 70503 Dear Members, First, let me say thanks for the difficult votes on last year's budget bills. As you recall, part of the budget consensus involved a tax amnesty program, which we anticipated would generate $200 million. Although the Amnesty Program is not an ideal budgeting tool, we were able to balance the budget and avoid additional cuts to higher education and health care because of it. As you may have heard, the Department of Revenue has announced that the amnesty program has generated more than the $200 million budgeted for. We should learn the total amount over the next few weeks. I commend the Department of Revenue for an excellent job in administering the program. The website was first rate. The communications with taxpayers were informative and effective. We would not have reached our budgeted threshold without the incredible effort of their entire staff. Please thank them when you have an opportunity. Several members have asked me about how collections in excess of the $200 million in this year's Amnesty might affect our spending options 'for the coming year's budget. I offer the following thoughts: 1. The Revenue Estimating Conference will make a determination regarding these excess collections in the official forecast and recognize these funds (in part or in whole) as either "recurring" or "non--recurring" revenue. This determination must happen before we can make decisions about how best to proceed. 2. For the dollars recognized as recurring, this amount can be spentin our operating budget. We may want to set these funds aside until the budget situation becomes more clear. A portion of this money may need to be included in the Department of Revenue's budget to help pay for the 0 additional collection costs associated with the Amnesty Program. 3. For the dollars recognized by the REC as non--recurring, we are limited by both the Constitution and recently passed legislation. Specifically: a. 25% must be paid into the Rainy Day Fund. b. 5% must be paid toward the retirement systems' unfunded accrued liability (UAL). c; The remaining 70% can be spent on certain Constitutionally mandated areas. I think it's important that we have a dialogue to discuss investing this money in areas such as: i. Debt defeasance; ii. Higher education deferred maintenance; Highway projects; Robideaux Amnesty Letter iv. Additional payment to Rainy Day Fund. V. Additional payment toward the UAL. Again, I am proud to have worked with all of you on the budget for this year. \While the budget consensus was not perfect, it has opened up new dialogues and fresh ways to look at the problems with our budget process. Lastly, I offer the following background on how excess dollars were spent during the previous Amnesty Program in 2010 (Act 519 of the 2009 Regular Session): I The 2010 Amnesty Program brought in approxiinately $482 million. 0 The Revenue Estimating Conference officially designated about half of the amnesty money ($242 million) as non--recurring revenue. This amount was initially deposited into the Coastal Protection and Restoration Fund (as allowed by the Constitution), but then swept out and transferred to the Overcollections Fund (as allowed by Statute), and then appropriated to DI-ll-l's operating budget. 0 The other half of the money ($240 million) was spent as follows: 0 $76 million appropriated to the Department of Revenue; 0 $75 million deposited into the Budget Stabilization (Rainy Day) Fund; the 2009 supplemental appropriations bill (HB 881) then swept $86 million out of the Rainy Day Fund and appropriated into the state general fund for the Board of Regents due to a decrease in projected state general fund revenues from FY 09 to FY 10; 0 $90 million was deposited into the Coastal Protection and Restoration Fund. Act 519 required that the first $90 million of the amnesty proceeds be deposited into the Coastal Protection and Restoration Fund. This money was then transferred out of Coastal Fund and into the Overcollections Fund and appropriated to DHH. I The bottom line is that all of the $482 million in 2010 amnesty proceeds eventually ended up in the operating budget, with most of it ($332 million) going to DHI-I and the remainder going to the Department of Revenue ($76 million) and the Board of Regents ($75 million). Thank you for taking the time to read this letter, I hope you found it informative. As always, please do not hesitate to contact me if you have any questions and I look forward to working with you on these issues in the coming session. Sincerely, Joel Robideaux