BRADENTON, Fla. — Louisiana plans to sell $675 million of new and refunding bonds in two deals next month if a dispute over whether the state has a year-end surplus clears up and ratings can be obtained.
At their meeting Thursday, state bond commissioners agreed to a two-week postponement of a $475 million general obligation refunding, and pushed its pricing to Nov. 10 from Oct. 27. A new money $200 million GO sale was tentatively set for Nov. 20 because of the budget flap.
The delay in one deal and tentative date for another is the result of a public disagreement between the administration of Gov. Bobby Jindal, State Treasurer John Kennedy, and the legislative auditor about whether there is a $178.5 million year-end surplus after closing the fiscal 2014 books.
The potential windfall was first announced in a press release Oct. 9 by Commissioner of Administration Kristy Nichols, whose division is responsible for developing the executive budget.
In response, Kennedy released his own statement Oct. 15 saying that he is "responsible for the custody, investment and disbursement of state funds," and that the state in fact had a $141 million deficit at the end of fiscal 2014.
Louisiana's legislative auditor, Daryl Purpera, has questioned how the surplus was arrived at, according to the Advocate newspaper.
"This is a different way of looking at what is surplus," Purpera told the paper. "The bottom line is, at this point, until we have audited it I can't tell you if it's a good number or bad number or what."
The evolving controversy prompted state officials to cancel calls with rating agency analysts that had been scheduled for Monday.
The state bond director, Lela Folse, told the commission Thursday that the two GO sales will go forward pending rating agency reviews.
The refunding is expected to bring significant savings, while the new money GO deal is needed to insure the state has adequate liquidity for ongoing projects. The new bond proceeds will reimburse prior expenditures.
The budget dispute was not discussed publicly at Thursday's meeting, though it was listed on the agenda along with the Securities and Exchange Commission's Municipalities Continuing Disclosure Cooperative Initiative. The commission went into closed session to talk about those matters.
Nichols, who is a member of the bond commission, said on her website that she will report on the year-end surplus to the Joint Legislative Committee on the Budget Friday.
She said that she will report that actual revenues and expenditures in the state general fund include a balance carried over in prior years that were not previously reported by the Treasury.
Nichols also said that the surplus was discovered using the same methods of calculations that have always been used by the state.
