When the century was new and U.S. Sen. John N. Kennedy was still state treasurer, he used one of the powers available in that post and touched off a war among the highest ranks of Louisiana’s last Democratic majority government.
All Kennedy did was what a state treasurer could do: refuse to add to the State Bond Commission’s agenda the approval of an $85 million loan to build a sugar mill in Bunkie.
Longtime Agriculture Commissioner Bob Odom had sought the mill to help struggling cane farmers. But the other mill state taxpayers were on the hook for wasn’t faring well.
By backing Kennedy in 2005, Gov. Kathleen Blanco — the last Democratic governor who presided over a Democratic majority in the Legislature — squared off against Odom, one of Louisiana’s most powerful politicians of the late 20th Century. (The Bond Commission, which is controlled by the governor, eventually rejected the project.)
During his 16 years as state treasurer, Kennedy created a bully pulpit that the seven candidates in the Oct. 14 statewide election seeking to succeed him want to imitate.
The take-away is that for all of his Drano-drinking rhetoric, the Bunkie sugar mill project was one of the very few times that in the execution of his actual duties, Kennedy ensnared the process the state uses to fund construction projects.
Essentially the state’s money manager, a treasurer, provides the staffers who vet loan requests for state and local government projects presented to the Bond Commission, which was formed in 1968 to “administer the incurring of state debt.”
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The Bond Commission decides whether a local government can take out loans to, say, repair its drinking water system or build a firehouse. On the state level, these construction projects, called “capital outlay”, are managed through House Bill 2, which is approved by the Legislature before heading to the commission.
Simply, capital outlay is a long list of wishes, of which the state can only afford a few. That leaves a governor to pick and choose.
Gov. John Bel Edwards hasn’t yet, but the practice has been for governors to reward supporters and punish opponents when adding projects to the list.
Commissioner of Administration Jay Dardenne will probably submit this year’s list in September. If tradition holds, the Bond Commission will consider those projects “en globo,” meaning the not-so-good projects slip through with the good ones.
Ex-state Rep. John Schroder, R-Covington, is the candidate who most channels Kennedy, a former constituent.
“Our capital outlay process is fundamentally broken and politically corrupt. If you vote with the sitting governor you get your project; if you don't, good luck,” Schroder said. “I've never been a rubber stamp for anyone, and I'm not going to start when I chair the Bond Commission. Every project will be weighed and measured on its merit.”
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Candidate Neil Riser, R-Columbia, served on the Bond Commission as chairman of the Senate Revenue and Fiscal Affairs Committee under Gov. Bobby Jindal. His committee had to approve the construction projects included in HB2.
His capital outlay focus is on the nuts and bolts of analysis.
“Does the plan they present make sense,? Are they able to pay off the loan or will they have to come back to raise more money to make the payments? And does the project they want money for make sense?” said Riser, who does much the same thing in the private sector as a member of the board directors at Caldwell Parish Bank and Trust Company.
As Jindal’s first Commissioner of Administration, Angele Davis, R-Baton Rouge, also served on the Bond Commission. She zeros in on the treasurer’s task of negotiating for the cheapest rates with the big Wall Street financiers who buy the bonds.
“As state treasurer, and as chair of the State Bond Commission, I’ll continue the practices of working with our elected leadership and providing aggressive oversight of our bonded indebtedness that will get us back on the path of credit rating increases, which saves taxpayers millions a year on state debt interest payments," Davis said.
New Orleans lawyer Derrick Edwards, who is leading in the polls largely because he’s the only Democrat and has run for statewide office before, said, “I have several innovative ideas.” But he won’t disclose those thoughts until after the election.
Voters also need to keep in mind that politics is the art of the possible.
Kennedy often talked about reforming the system by requiring debate and a vote on individual capital outlay projects. In fact, he made a motion for the Bond Commission to do just that. It died for want of a second.