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Voters To Consider Limiting Uses of La. Trust Fund

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When they agreed to establish a $540-million education trust fund in 1986, Louisiana voters may not have envisioned that some of the proceeds would be used to pay travel expenses for members of the state board of education or to bankroll the search for a new state school superintendent.

But that is what has been happening, critics charge.

As a result, state voters are set to go to the polls again, on Oct. 6, to consider a constitutional amendment setting tight controls on uses of the fund, which originated in a massive distribution of federal offshore-oil-leasing money to coastal states.

Those involved in the issue agree that the vast majority of the trust-fund money has been designated for legitimate educational uses, including better elementary textbooks, pilot teaching programs, endowed pro(fessorships, and graduate-school fellowships. And most of what has gone for administrative costs, they say, has been above board.3

But there have been enough reports of questionable administrative and general-fund spending to spur public pressure for restrictions.

Critics cite, for example, the decision by Attorney General William J. Guste Jr. to allow state board members to use trust-fund money to pay for travel expenses, even if the travel was unrelated to trust-fund business.

Such uses, argues the Louisiana Public Affairs Research Council, are not what voters intended.

The group is backing the constitutional amendment, which would prohibit using trust-fund money for spending that should come out of the state's general fund and specify alL8lowable administrative expenditures.( "[The trust fund is] about the only game in this state for trying to enhance education," said Emogene Pliner, the group's vice president for research. "It's been a real boon, particularly with Louisiana's financial squeeze."

Without tight controls on how to spend the money, Ms. Pliner argued, the state risks losing the ability to upgrade its education system. She noted that the money was intended to add to the state's education budget, not supplant it.

As of the end of June, the fund contained $630 million. Since it was created, state education programs have received $147 million.

For every dollar of interest income earned by the trust, 37.5 cents goes for elementary and secondary edu cation, 37.5 cents goes for higher education, and 25 cents is added to the principal.

But while observers say the amendment is almost certain to pass, some question whether it will have much real impact.

Paul Jones, a research analyst with the House Education Commit tee, said the measure will simply formalize practices that have already been adopted. Most of the questioned spending has been upheld by the attorney general or stopped, he said.

In 1989, the legislature prohibited spending more than 3 percent or $800,000, whichever is smaller, of the yearly trust-fund allocation on administrative expenses.

"Even if the amendment is voted down, I don't think you'll see any wild and loose spending of [trust- fund] money because we are really trying to protect it," Mr. Jones add ed. "It's special."--mp

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