Senate committee moves bill to repeal Strategic Investments account, sparking budget debate

Senate File 119, debated Feb. 19, would repeal the Strategic Investments and Projects Account (commonly called CIPA) and change the statutory routing and guarantees that currently send a percentage of the Permanent Mineral Trust Fund reserve account into the Strategic Investment project account. Sponsor Sen. Hicks said repeal would stop a guaranteed drawdown that he described as “eating the seed corn” from the reserve account, allow longer‑term investment of corpus and simplify the budget flow into the general fund and the LSRA (Large School Revenue Account).

Opponents on the floor warned that the repeal removes a predictable, statutory guarantee that currently supplies a measurable flow into the school foundation program and gives rise to the risk of future revenue projection shortfalls. Sen. Rafas said removing the CIPA guarantee could create a multi‑hundred‑million‑dollar hole in projected school funding if future legislatures do not appropriate the same amounts from the general fund.

Key detail: Standing and Committee of the Whole amendments adjusted transfer timing and clarified how funds would flow to maintain school foundation transfers in the near term; sponsors argued the statutory mechanisms (LSRA transfers and an automatic $100 million transfer when LSRA has excess) will continue to put money toward schools but without the CIPA guarantee.

Action taken: Committee of the Whole amendments were adopted and the measure was passed out of the Committee of the Whole with a due‑pass recommendation to the Senate.