BATON ROUGE, La. (AP) — Gov. Bobby Jindal's top budget adviser said Thursday the administration is looking at ways to restructure Louisiana's debt to keep dollars flowing for state construction projects, even as the state hovers near its debt ceiling.
Commissioner of Administration Kristy Nichols said the administration will ask the Bond Commission next week for approval to bring on a financial adviser to help chart the plans.
Among the options being considered, she said, is a debt refinancing that could help the state take advantage of lower interest rates, which could free up more money for construction projects.
"We're looking at every financial opportunity to ensure that our needs are met and that we move forward with the projects intended," Nichols said.
The state's pool of money to pay for ongoing construction projects is running dry, and Louisiana is teetering so close to its debt ceiling that there's little room to borrow more to replenish the fund.
The state borrows money to pay for construction projects through bond sales to investors, with the debt paid off with interest over decades. But Louisiana has a constitutional limit on debt, and the state is $22 million away from hitting its $605 million debt ceiling, the amount allowed for annual debt-repayment requirements.
According to estimates from financial analysts, the state will run out of money for construction projects within four to five months and could borrow enough to pay for another four months of construction spending before hitting the state's debt limit.
Nichols said the governor will not support any proposal to breach the debt ceiling or increase the cap.
Treasurer John Kennedy said Jindal administration officials talked in a conference call this week of restructuring the state's existing debt by extending the repayment term or possibly issuing debt over 25 to 30 years, instead of the standard 20-year term.
Both would boost interest costs, and Kennedy said he opposes the ideas.
"That's penny-wise and pound-foolish. It'll cost the taxpayers more money. That's kicking the can down the road," he said.
But Nichols said Thursday that those ideas of lengthening the repayment period for borrowing have been rejected.
"That's not an option we're looking at," she said.
The decisions could have implications on Louisiana's credit ratings, Kennedy said.
"The rating agencies have already called us. They know there's a problem and they want to know how we're going to solve it," he said.
The treasurer said he'd like to sit down with administration officials to talk over ideas about ways for debt restructuring and for managing the state's construction projects. He said he'd suggest scrapping — or at least delaying — some projects that haven't begun and that aren't urgent needs.
"There's no question we have projects in the works or that will be in the works that are low-priority. I don't consider renovating the headquarters at the Junior League to be a priority," he said. "I don't consider bike paths and splash pools to be a priority."
However, Nichols said the administration won't support stalling projects already given lines of credit and doesn't anticipate any delays with planned construction.
MAY 24 Blogger Robert Mann posts this entry about the Baton Rouge Chamber's recent report on Louisiana's higher education system. It's critical to economic development, and yet our system is facing a "funding crisis" with no way to resolve it, the report says. The Chamber says control of tuition and fees must be returned to the higher ed governing boards.
MAY 24 Here's a NBC33 story about Tyrann Mathieu. He has signed with the Arizona Cardinals, inking a $3 million, four-year deal. He gets a signing bonus of $265K, but gets another, larger bonus if he doesn't get cut from the team for doing drugs. The deal reportedly includes mandatory tests and meetings for the player.
MAY 24 Jarvis DeBerry posts here about the redonkulus rhetoric that would have us believe NOLA is a safe city with a murder problem. Maybe the city's crime stats don't compare with its murder stats because you can't manipulate a murder, he says: a dead body's a dead body. It just doesn't make sense, he says, and his readers agree: a poll asks if they believe the city is safe, and more than 90 percent say no.
MAY 24 Jindal administration officials announced Thursday that the privatization of public health care is going to cost a lot more than they budgeted for, the Advocate reports here. "I'm so surprised," said no one. Anywhere. The cost they're projecting now is more than $1 billion - a lot more than the $626 million budgeted for it. And, it's more than it cost the state to operate those hospitals. So why are we doing this again?
MAY 24 Blogger CB Forgotston ridicules the recent PR campaign by the state GOP in the wake of a legislative auditor's request to both major parties. The GOP (apparently unaware that the Dems got the same request) started yammering about being targeted because it had "killed" a tax increase. CB finds that laughable, but it's also pretty funny that the GOP was comparing this episode to the IRS scandal (Because the President has so much to do with our state auditor. Right?).
MAY 24 Politico details some recent fund-raising efforts by Sen. David Vitter, which have raised the question of his future political plans. This time, it is a $5,000 per head "bayou weekend" that includes "Cajun cooking" and an all-caps "alligator hunt," the story reports. Funds raised go to a super PAC that can spend money to support Vitter in federal or state races, the story points out.
MAY 24 The pink building on Royal in the quarter was sold at a sheriff's sale Thursday, this Picayune story reports. An injunction that would have halted the sale wasn't enforced because the family failed to post a $150,000 bond, the story reports. So the owner of the mortgages on the building bought it, for nearly $7 million. Now the feuding family will have to negotiate with that company to get a lease on the building that has housed their business for close to 60 years.
MAY 23 This post in Louisiana Voice tells us about a bill by a Winnsboro lege that would require all public high school students to take at least one Course Choice online class in order to graduate. (What?) Blogger Tom Aswell says it's a monument to "waste and corruption," especially in light of the problems he's exposed with the program in recent weeks. Idaho had a similar program, but voters removed it by a 2-1 margin, Aswell says.
There will soon be a whole lot of shakin’ going on at Benny’s Sportshack Supplement Depot, a new concept by Opelousas native Benny Nele. Located at 2002 Johnston St., the supplement shop, smoothie bar and café, featuring hot off the press paninis and wraps, plans to open in late May.
Philip deMahy Sr., a once respected New Iberia ad exec, was sentenced May 2 to spend the next two years (he faced up to 100 years) in a state penitentiary after state and federal investigators found dozens of images depicting children engaged in lewd sexual acts on his personal computer.