PSC files lawsuit against La. legislature

Published 12:00 am Thursday, July 8, 2010

BATON ROUGE (AP) — The Louisiana Public Service Commission is challenging the Legislature’s shifting of utility regulatory fees to balance other parts of the state budget, arguing in court that the move of more than $8 million was illegal.

Lawmakers took more than $4 million from PSC funds last year and another $4.5 million this year to pay for services outside of the agency.

A lawsuit filed by the PSC in state district court says the movement of the money is unconstitutional, claiming lawmakers can’t divert fees paid for specific services into general tax revenue to plug other areas of the budget.

‘‘These fees were paid by ratepayers with the purpose of regulating public utilities,’’ PSC Executive Secretary Eve Gonzalez said Wednesday. ‘‘We’re asking the court to say this is not proper.’’

House and Senate attorneys would not comment on the lawsuit Wednesday, saying they had yet to receive a formal copy of the court filing. The lawsuit was filed late last week right before the Fourth of July holiday weekend.

Lawmakers and the governor’s Division of Administration have routinely removed dollars from statutorily dedicated funds around state government — in a move called a ‘‘funds sweep’’ — to balance budgets year after year. They do it despite complaints the funds contained fees to pay for specific services, not general operating expenses.

‘‘The Legislature has violated the Louisiana Constitution by mandating the collection of monies in dedicated funds under the guise of a ’fee’ for a limited and special purpose and converting that ’fee’ into a tax used to raise revenues of the state,’’ the PSC lawsuit says.

Gonzalez said the sweep of the PSC’s three funding sources will create a cash flow problem for the regulatory agency and could leave the commission short of money. The PSC doesn’t receive state general fund dollars and relies on inspection and regulation fees and penalties paid into the three funds to cover the agency’s operating costs.

The case was assigned to Judge Timothy Kelley, but the judge’s office said the case will be reassigned because Kelley has recused himself. Kelley is married to Commissioner of Administration Angele Davis, the governor’s chief budget adviser whose office was involved in the fund sweeps tied up in the lawsuit.