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“Statutory Dedications” Explained

With so much current focus on the state budget, the term “statutory dedications” keeps coming up. What are they and why are they an issue? We turn to Louisiana Treasurer John Kennedy for answers.

“We have about 370 special accounts into which money automatically flows, because the Legislature has dedicated it,” Kennedy says, by way of introduction.

He compares them to payroll deductions, since the money comes out before you—or in this case, the state—gets a paycheck to use for settling your other bills. Some of these dedications are literally written into Louisiana’s constitution. Those are like income tax withholding. You can’t stop it. Those constitutional dedications include things such as the MFP that pays for public schooling.

“When you hear someone say, ‘Well, most of our money is dedicated in the constitution,’ that’s not really accurate,” Kennedy states.

He says true “statutory dedications’ are more like your voluntary deductions to a 401K or the United Way or a health savings account.

“The Legislature set these funds up by a majority vote. The Legislature can un-set them up by a majority vote,” Kennedy explains, adding that’s much easier than the two-thirds legislative majority plus a vote of the people that is required for constitutional changes.

Current statutory dedications include grants for film makers, funds to fight pet overpopulation, and money for the board of massage therapists. There’s even a fund to “assist” the New Orleans sports franchises.

“Some of them have been there forever—forever! Some of them are there for good reason. But some of them are there because somebody had a really good lobbyist,” Kennedy observes.

The treasurer notes that the Legislature hasn’t really analyzed the statutory dedications for at least ten years. About $3-billion per year is being locked away in these various funds, at the same time health care and higher education are facing massive and crippling cuts as part of the budget-balancing process. Kennedy says it’s time to reconsider whether all the statutory dedications are still in Louisiana’s best interest.

“You go through every statutory dedication and you ask yourself, ‘Why did we do this?’ and ‘Is this dedication as important—or more important—than LSU?’.”