Louisiana could create a sovereign wealth fund to help with budgeting and construction and infrastructure funding under a bill signed by Gov. John Bel Edwards earlier this month.
The bill was signed by Mr. Edwards on June 17, roughly two weeks after it passed the state Legislature. It still needs voter approval on the ballot this fall to become a reality.
The Revenue Stabilization Trust Fund would be funded by excess oil and gas revenues, and corporate franchise and income tax revenues.
The fund could help cover capital outlay projects or transportation infrastructure when its balance exceeds $5 billion, according to the bill text. Annual interest earnings could go toward general fund expenditures.
The bill also directs a portion of excess oil and gas revenue toward paying down the $18.1 billion in combined unfunded liability of the $9.9 billion Louisiana State Employees' Retirement System and $16.3 billion Louisiana Teachers' Retirement System, both in Baton Rouge.
State Rep. Walt Leger III, one of the bill's sponsors, said diverting extraordinary revenue into a trust fund can help put the government, which has a tendency to spend when times are good and make cuts when times are bad, on a more sustainable path.
