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Louisiana Governor John Bel Edwards speaks after legislative session ends sine die, Thursday, June 6, 2019, at the Louisiana State Capitol in Baton Rouge, La.

Louisiana Gov. John Bel Edwards is taking a dispute over millions of dollars in unclaimed property with Treasurer John Schroder to court, suing the treasurer to force him to turn over the money so it can be spent in the state budget.

The lawsuit, filed Friday morning, ratchets up a months-long battle between the two officials and moves toward a resolution ahead of the upcoming legislative session where Edwards is seeking to spend the money at issue – an estimated $25 million – to help pay for his campaign promises, like teacher pay raises and investments in early childhood education.

“It is our view the treasurer's actions are not lawful and they’re usurping the role of the legislature," Commissioner of Administration Jay Dardenne told lawmakers during a budget hearing Friday. "The treasurer doesn’t have the authority to redirect that money to his own escrow account” 

The lawsuit, which asks a judge to force Schroder to hand over the funding, was filed Friday morning in the 19th Judicial District court in Baton Rouge.

Louisiana's 'unclaimed property' program at center of battle between treasurer, governor

For decades, the state treasurer has sent over millions of dollars a year in unclaimed property to the state general fund, where it can be spent by lawmakers and the governor on a wide range of areas. Some of the money goes to extending Interstate 49.

Unclaimed property is money from forgotten bank accounts, retirement accounts and other assets that are eventually taken over by the government. But Schroder last year refused to turn over the millions of dollars in the fund that lawmakers had appropriated in the budget. He said he would again refuse to turn over the funds in the upcoming budget, which economists estimate is around $25 million, claiming the money does not belong to the state.

"Gov. Edwards is suing me because I won't let him spend Unclaimed Property in a state budget that tops $32 billion. Actions like this make it hard for the public to have faith in the government process," Schroder replied in a press release. "Unclaimed Property isn't the state's money. It belongs to the people of Louisiana."

Matthew Block, the governor's general counsel, said in a statement the law is clear that excess money in the unclaimed property fund "are to benefit the public." According to Block, the fund hit a peak balance of more than $78 million at the end of 2019, leaving a "healthy balance" for Schroder to transfer.

"The public does not benefit from the Treasurer simply seeking to grow the size of his government bank account; instead, those funds should be used for roads and bridges, education, and health care," Block said. 

Edwards’ administration unveiled a budget proposal to state lawmakers Friday morning. The governor’s office specified where it wants to spend an additional $103 million that Republican legislative leaders have refused to recognize. The governor’s office has fought with those leaders – House Speaker Clay Schexnayder and Senate President Page Cortez – over the state revenue estimate, and the two sides could not reach an agreement at a recent meeting of the Revenue Estimating Conference.

Deadlock on key state revenue panel as governor, new legislative leaders fail to reach agreement

That means the governor’s budget proposal relies on $103 million that is not officially available to spend, and won’t be unless those Republican lawmakers agree to recognize the money. Part of the reason Cortez and Schexnayder refused to adopt the forecast last week is because of the $25 million Schroder is refusing to turn over, with Cortez wondering whether the dispute would be resolved by the time lawmakers must pass a budget.

Email Sam Karlin at skarlin@theadvocate.com