A Baton Rouge judge ruled unconstitutional late Wednesday the practice called “fund sweeps” that legislators routinely used to balance state budgets.
Fees paid by utility companies and trucking concerns essentially became taxes when “they were swept and placed into the General Fund,” Judge Donald Johnson ruled in a judgment that was filed minutes before the 19th Judicial District Court closed for the day.
The Louisiana Public Service Commission had challenged the Legislature's taking money in 2009 and 2010 that been paid by utilities and trucking concerns as fees and fines and used to pay for inspections and enforcement of regulations. The money was put in the state’s general fund by the Legislature and used to pay for government services like public schools.
Johnson found that converting fees levied on a few to pay for services of the many violated the federal and state constitutions. Additionally, the 2010 fund sweep was done in a year that no fiscal issues were supposed to be considered and passed without the two-thirds vote required of most tax-related matters.
After seven years of delays over legal technicalities, a trial court Monday finally heard arguments about the constitutionality of the Louisia…
During the Jindal administration, legislators routinely took monies accumulated in various dedicated funds and spent them on general government services. The Edwards administration includes fund sweeps in its condemnation of former Gov. Bobby Jindal's fiscal "smoke and mirrors" practices. But the ability to redirect money is still available to legislators.
His order Wednesday sorted out confusion caused when the judge signed two opposing orders; one saying it was okay for the Legislature to sweep funds and another saying the practice was unconstitutional.
The lawyers held a phone conference call with Johnson’s law clerk Wednesday to sort out which party the judge would side with. The lawyers hung up from the call not knowing how Johnson would decide.
A few minutes before the clerk’s office closed, Johnson delivered an order noting that the Court had erred in issuing conflicting orders, and then vacated the order finding for the Legislature and reinstated the order finding fund sweeps unconstitutional.
The Legislature can appeal Johnson’s decision.
In the meantime, another lawsuit filed by several PSC commissioners, former commissioners and electricity customers asks that the Legislature repay the $9 million taken from regulators in 2009 and 2010.