Capitol 411: October 1 Update

The State Legislature convened on Monday at 6 p.m. for the second special session of 2020 and the fourth overall session of the year. Legislators will have one month to complete business under the rules of this special session. The 70-item call puts the primary focus on executive powers during an emergency as well as the recovery from both COVID-19 and Hurricane Laura.  

Curtailing the Governor’s Executive Authority 

Without a doubt, the most contentious issue will be the attempt to curtail the Governor’s Executive Authority over emergency response. The legislature previously discussed rescinding the Governor’s Emergency Declarations regarding COVID-19 and will do so again. The more likely possibility is limiting the Governor’s authority during public health emergencies or setting up a system to issue executive orders while public health emergencies are ongoing. Changing the authority of the Governor during an emergency will require a Constitutional Amendment or at the very least a legal battle. It is worth noting that some of the exemptions that have allowed childcare facilities to operate and businesses to delay tac, fee, and other filings are tied to executive orders by the Governor. Also, federal assistance programs are dependent on the fact of the declared emergency and any repeal risks federal funding coming to the state. The ramifications of these decisions will be far reaching and have the potential for significant unintended consequences. 

The Depleting Unemployment Trust Fund 

One of the significant economic consequences of COVID-19 is the depletion of the Unemployment Trust Fund, which must be replenished to prevent business taxes from increasing (and benefits for claimants from decreasing) on January 1. Dealing with the Unemployment Trust Fund will be a major part of any discussion during the next month. The Trust Fund had over $1 billion at the start of the year and is now under $100 million. This precipitous drop has led to the state borrowing money from the federal government and will result in an increase in taxes for businesses. The legislature can delay business taxes from rising and unemployment benefits from decreasing, but eventually the bill will come due. 

Assistance for Struggling Businesses 

Finally, one of the most problematic issues to tackle will be support and incentives for struggling businesses. It is hard to find a person who does not believe something needs to be done, but the problem is money (or lack thereof). The state does not have additional revenue for new programs, and with no action from the federal government, the legislature will have to find creative ways to support businesses and individuals during these difficult times.   

Expect a very contentious session as the legislature moves to limit the Governor’s authority. BRAC will be monitoring the action and supporting reshoring efforts, a new Economic Development District in North Baton Rouge, and other efforts to help businesses through economic recovery. We will keep you updated as more information becomes available, and legislation starts to take shape. 

David Zoller

As BRAC’s Manager of Governmental Affairs, David Zoller is responsible for the organization’s governmental relations and advocacy efforts and managing other projects related to economic competitiveness and quality of life.

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