Louisiana to refinance debt for $82M for this year’s budget _lowres

Advocate file photo by MARK BALLARD -- State Treasurer John Kennedy.

The state treasurer refused to move money from various funds to help balance the budget, saying the promised money just isn’t there.

“They estimated $12 million that would come in, that didn’t come in.” said State Treasurer John N. Kennedy.

Therefore, Kennedy said he was unable to transfer monies needed to cover spending for the fiscal year that ended June 30, which has come up short of revenues.

The Jindal administration suggests that Kennedy is grandstanding.

“These funds were approved to be transferred as part of the Fiscal Year 2015 midyear deficit solution in February 2015,” Greg Dupuis, a spokesman for the Division of Administration, said in an emailed statement. “At the time of the mid-year reductions, sufficient funding existed in these accounts to complete the transfers. This is merely a timing issue. As funds become available in these accounts, the transfers will take place.”

The $12 million comes, for the most part, from a couple dozen dedicated funds that generally collect revenues from fees they charge. The administration either over-estimated the amount that would be collected or failed to estimate the amounts realistically, Kennedy said.

In some cases, law dictates that a specific amount be used for a specific purpose and the remainder can be “swept” into the general fund to help pay the state’s operating expenses.

If the funds come up short, the agencies that administer the monies will have to cut spending to balance the amount available, said Laura Lapeze, chief financial officer for the Department of the Treasury.

This move is coming in context with news that as the books are being closed on the fiscal year that just ended, the administration’s accountants discovered a deficit.

“The administration knows, at this point, the size of the deficit and the reason, but they won’t share that information with us,” Kennedy said.

The Jindal administration won’t say just how short they are for the Fiscal Year 2015 budget. Commissioner of Administration Kristy Nichols says the calculations are still being made, but the number will be ready by the time the Joint Legislative Committee on the Budget meets later this month.

Nichols said the governor already has enacted hiring and spending freezes in this year’s budget that could help close the gap left from last year.

Kennedy suspects that when the books are finally closed on Fiscal Year 2015 the deficit will be about $100 million. Legislators then will have to come up with new spending cuts to balance the past year’s budget. If the $100 million is spread over only six months, then it has the impact of being $200 million, Kennedy said.

“While delaying it may, to some, be good politics, it hurts the taxpayers,” Kennedy said, talking a swipe at Gov. Bobby Jindal, who is running for president and often is saying on the campaign trail that he has successfully shepherded Louisiana’s budget.

After balancing last year’s budget, the new governor – Jindal is term-limited – and the new Legislature will have to tackle the deficit, now approaching $1 billion, in next year’s budget.

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