BATON ROUGE, La. (AP) — Gov. Bobby Jindal's administration urged lawmakers Thursday to pressure the state treasurer to sign paperwork to borrow money, saying the delays could stall state-financed construction projects.
Treasurer John Kennedy said the governor's office is exaggerating and no construction work is in jeopardy, in what has become the latest in a string of financial disagreements between the two Republican elected officials.
The dispute centers on whether Louisiana ended last year with a budget surplus or deficit.
Kennedy said he won't sign financial documents needed for $200 million in borrowing or for a refinancing of existing debt until he believes they accurately explain the surplus disagreement from the budget year that ended June 30.
Jindal's chief budget adviser, Commissioner of Administration Kristy Nichols, said her office has submitted compromise language. She said if the state doesn't finish the paperwork by Monday, plans for the new borrowing and the debt refinancing could get off track.
"I ask that you join me in urging the Treasurer to perform his duty as the Chairman of the Bond Commission and sign the official statement. Without this new funding, we will not be able to begin work on hundreds of approved projects. And projects that are already in progress will be in danger of being frozen in January," Nichols said in her letter to lawmakers.
Kennedy said no immediate deadline exists.
"Certainly Kristy's entitled to her opinion, but that's not accurate," Kennedy said. "We've got plenty of time. Now, that doesn't mean we're not working for a resolution. It's just inaccurate to tell legislators if we don't do this by some artificial deadline that they won't get their projects done."
The Jindal administration says it has identified additional state cash reserves that it calls a nearly $179 million surplus.
Kennedy says the calculation method used by the Jindal administration strays from Louisiana's regular accounting practices, which he said would show a nearly $141 million deficit last year when revenues are compared against expenses.
The Legislature's financial advisers also have been reticent to immediately agree to the surplus amount submitted by the administration.
Kennedy said the language submitted by the Jindal administration for the borrowing paperwork "in my opinion would violate the anti-fraud provisions" in federal law governing such financial deals.
Rep. Clay Schexnayder, R-Gonzales, said he thinks Kennedy is grandstanding, using the dispute to raise his profile as he weighs a possible run for governor next year.
"I just look at it like him creating some type of political opportunity at the expense of communities and these projects," Schexnayder said.
State-financed construction projects are paid with dollars borrowed through bond sales to investors, paid off over years with interest. Louisiana has about $400 million in its capital outlay escrow account, which pays for ongoing construction work. The Jindal administration and lawmakers are hoping to do new borrowing in November to replenish the account.
Kennedy said the money in the escrow account, combined with the state's ability to borrow another $200 million from other treasury funds, gives the state a cushion that ensures construction projects aren't threatened with delay.
But Nichols said if the documents can't be completed in time for a November bond sale, that likely would push a sale into January and the available construction dollars could run out.
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Posted on Fri, October 31, 2014
by Melinda Deslatte, Associated Press