Louisiana is banking on $200 million from a lawsuit settlement with BP to shore up this year’s budget, but there is a chance that money won’t make it to the state’s coffers before the end of the fiscal year.
Liz Murrill, head of the civil division in the Attorney General’s Office, warned legislators on Thursday that the state is still working to finalize the settlement related to the Deepwater Horizon oil spill. A hearing that had been scheduled for next month has been pushed back until at least April, Murrill said. From the date that the consent decree is signed, BP has 90 days to hand over the money.
Murrill said there’s no guarantee that the payment to the state will happen before the July 1 start date of the next budget year.
House Appropriations Chair Cameron Henry responded to the news with a sarcastic “great.”
Gov. John Bel Edwards has proposed plugging part of the state’s $900 million shortfall in the budget that ends June 30 with the settlement money and $128 million from the state’s rainy day fund. The state Senate has agreed to both proposals, but the measures haven’t yet been taken up in the House. The Legislature is in a special session through March 9 to hash out a plan for fixing the budget.
Commissioner of Administration Jay Dardenne said that the president of BP has met with Edwards and personally assured the governor that the company won’t wait out the 90-day period. Dardenne said the administration, working off that assurance, believes the check will be written immediately after the decree is finalized.
“We’re glad that the president (of BP) came to meet with the governor face-to-face,” Dardenne said.
The potential hang-up has been pointed out in a fiscal note on the Senate bill carrying the BP funds, with the note that the consent degree is expected to be signed in mid-March.
Under the settlement terms, Louisiana will get $1 billion to cover economic damages that the state suffered because of the oil spill. After the first $200 million payment this year, BP will wait two years before beginning yearly payments of about $53 million through 2033.
Use of the first oil spill payment to plug the budget hole may be at odds with a separate agreement the state reached over use of its rainy day fund.
Dardenne has said that the state is at risk of “blowing up” that settlement but that there are no other options for quick cash to fix the budget.