Given their overlapping responsibilities, commissioners of administration and state treasurers ideally work, if not in perfect harmony, at least without appearing to be on the verge of scratching each other’s eyes out.
If ever a spirit of cooperation informed the dealings of Treasurer John Kennedy and Kristy Nichols, who runs the numbers for Gov. Bobby Jindal, however, it has been long forgotten. Their public pronouncements are eagerly awaited for the latest snide observation.
Their versions of two recent events have been so at odds that one of them, at least, must be fudging. When a dispute concerns financial probity, the smart money says believe the one with no motive to put lipstick on the budgetary pig. If anyone is tasked with making Jindal appear a prudent steward worthy of a shot at the White House, it is not Kennedy, whose bean-counting credentials have not hitherto been questioned.
Now, according to Nichols, Kennedy has not only strayed from the truth, but has neglected his duties. He responds that he is not surprised the administration is blaming others for a mess of its own creation, because he wouldn’t want to be held responsible either for the “bad budget practices that drove the Office of Group Benefits into financial ruin, drained the Medicaid Trust Fund for the elderly and crippled our universities.” Kennedy and Nichols are never going to hit it off at this rate.
Having refused to sign off on a bond issue as long as the administration claimed a $179 million budget surplus he regarded as “manufactured,” Kennedy has now given the go-ahead.
He issued a statement quoting a Moody’s report confirming that the state finished the year with a $140 million deficit, and announced that the administration had now agreed to “apprise potential investors” of that unfortunate circumstance in the offering statement. Kennedy said he was grateful the administration had “made concessions and accepted our language.” Nichols, however, said the offering statement would aver that the question of whether the state had a surplus or a deficit remained unresolved.
But Kennedy would hardly have relented if the administration had not acknowledged that the extra cash might be a product of wishful thinking. Kennedy had maintained from the start that signing off on the bond issue without acknowledging the deficit would constitute fraud.
After Nichols claimed the state was in the black following the discovery of unspent revenues from previous years, she suggested that Kennedy had fallen down on the job by not turning them up himself. He was no doubt miffed to be taken to task for failing to find dollars he insisted were imaginary, and refused to sign the bond papers until the administration abandoned the “funny math” that produced a convenient surplus.
Nichols then wrote to legislators, urging them to put pressure on Kennedy to “perform his duty” and sign the bond papers. His refusal to do so had saddled the state with an extra $2.8 million in interest and jeopardized important capital projects, she claimed. He, of course, responded that it was nonsense to suggest that any projects had been delayed, because the state had oodles of cash on hand in other accounts. Anyway, an accord of sorts was reached and the bond sale authorized.
Feelings between Nichols and Kennedy are just as strained on another front regarding the financial predicament of the Office of Group Benefits, which provides health insurance for present and former state employees.
Until a couple of years ago, OGB was in clover, with $525 million in reserves. But the administration then reduced the premiums, of which the state pays 75 percent, freeing up money for Jindal to plug holes in the state budget.
The OGB reserves quickly dwindled, deductibles went up, benefits went down and sick workers and pensioners jammed public hearings with tales of sudden hardship. Kennedy weighed in to repeat his concern about “the state’s deeply flawed budget practices” and opine that the insureds’ money was being “stolen.”
Let us not mistake Kennedy for a guileless altruist, for Jindal is not the only ambitious politician around here. Kennedy has run for higher office before and may do so again. However, his view of OGB received some objective support from the Public Affairs Research Council, which has called for a “third-party actuarial review” because the current system is “too vulnerable to the expediencies of the state budget.”
You can bet Nichols won’t agree with that.
James Gill’s email address is email@example.com.