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Art. 7, Sec. 14 of the Louisiana Constitution limits the use of public funds and requires that public funds be used for a public purpose and cannot be gratuitously alienated, donated or loaned. In order for the District to expend public funds in the manner contemplated, it must demonstrate that it meets the requirements of the Cabela’s test, that is:
1. The expenditure or transfer must be for a public purpose that comports with the governmental purpose which the entity has legal authority to pursue;
2. The expenditure or transfer of public funds or property, taken as a whole, does not appear to be gratuitous; and
3. Evidence must demonstrate that the public entity has a demonstrable, objective, and reasonable expectation of receiving a benefit or value at least equivalent to the amount expended or transferred.
This was a fact specific analysis that the District should go through with its attorney. The lease or CEA entered into with the property owner should outline how each of the elements of the Cabela’s test are met.
Louisiana Legislative Auditor website: 04/25/2025 10:34:02 PM
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