The biggest missing piece in the more than $25 billion current state operating budget materialized Thursday with the conclusion of a legal dispute.
The Jindal administration announced that state government will receive $95 million in commercial property insurance payments tied to hurricane-related property losses.
Insurance companies’ agreement to pay the money resolves legislators’ concerns that the dollars would fail to appear for the current year’s state spending plan.
Commissioner of Administration Kristy Nichols, the governor’s top budget adviser, said in a prepared statement that the agreement “marks the culmination of months of hard work to secure funding owed to the state.”
The bulk of the money — $56 million — will flow into this year’s budget, helping pay for public services. The rest will go into the state “rainy day” fund as long as legislators agree with the Jindal administration’s plans for the money.
Formally known as the Budget Stabilization Fund, the “rainy day” fund serves as a savings account to tide the state over during financial difficulties.
The $39 million from the settlement to be deposited into the “rainy day” fund is just a portion of the $205 million that some legislators believe needs to be placed into the account.
Legislators directed state Treasurer John Kennedy in a budget bill to deposit the difference between the state’s official revenue forecast and actual collections up to $205 million in the “rainy day” fund. The governor signed the legislation into law last summer.
Differences later emerged between legislators and the Jindal administration when a shortfall surfaced in the Medicaid budget.
Instead of putting an expected surplus into the “rainy day” fund, the governor wants to use part of the money to help resolve the Medicaid budget hole.
House Appropriations Committee Chairman Jim Fannin, D-Jonesboro, has told the administration to put the surplus into the “rainy day” fund.
Fannin said Thursday that he expects debate in the upcoming session to include a proposal to repeal the “rainy day” fund language that legislators adopted last year.
“If the folks vote to do that, then I’m fine. We’ve given them the opportunity to choose,” he said.