A political logjam holding up refinancing of some state borrowing has broken — clearing the way for action next week.
But the acrimony continues.
State Treasurer John Kennedy announced late Thursday that the Jindal administration agreed to disclose in the “official offering statement” that the state ended last fiscal year with a $140.6 million deficit and other pending budget issues.
“The Division made concessions and accepted our language,” said Kennedy. “We have a budget deficit. I am now comfortable that we will not violate the anti-fraud provisions of the U.S. Securities and Exchange Act.”
Division of Administration communications director Meghan Parrish said later that agreement was reached on the language. “But the official statement notes that it has not been determined whether the state has a surplus or deficit,” Parrish said. The DOA claims the state ended the fiscal year June 30 with a surplus in its general fund.
The Jindal administration says there is a budget surplus because uncounted leftover dollars from years’ past more than offset the shortfall. Commissioner of Administration Kristy Nichols last week tried to get state legislators to pressure Kennedy to back off his stance, claiming it was needlessly delaying the refinancing. She claimed Thursday the delay in finishing the “official offering statement” cost the state $2.8 million in savings.
Kennedy had wanted to more explicitly explain the state’s financial situation, including a note of the year-end deficit.
“We have budget issues. I wish we didn’t. What we cannot do is hide these issues from investors,” Kennedy said. He said the bond rating firm of Moody’s agreed. Moody’s on Thursday gave Louisiana a AA rating for the state’s upcoming refinancing and new bond issue.
In addition to the deficit, the information submitted includes a potential $523 million liability to the state in the Road Home program and potential issues with Low-Income and Needy Care Collaborative Agreements within the Medicaid program.