: LA Treasurer John Kennedy

BRADENTON, Fla. - It could be January before Louisiana determines how much of a fund balance is available for its next budget, state officials learned Friday.

The fund balance for the fiscal 2014 year end is estimated to be $178.5 million, but is subject to adjustment by the state auditor, Barry Dussé, director of the Office of Planning and Budget in the Division of Administration, told the Joint Legislative Committee on the Budget.

The surplus represents unspent funds swept from various budget sources by the Treasury and deposited into the state's general fund, that had not been counted as surplus funds in previous years, Dussé said.

The state's Revenue Estimating Conference will decide if the source of the surplus will be considered recurring or non-recurring funding in the future, he added.

The committee, which typically votes to accept the budget report on the year-end fund balance, decided against taking action until the final amount is determined.

State Treasurer John Kennedy, who attended the legislative committee meeting, said he believes that the Division of Administration has taken a view of the funds in question that is different than in previous years.

The DOA is the state's accountant, and prepares the comprehensive annual financial report.

Three times a year, Kennedy said the Treasury reports to the DOA on available cash in the general fund that includes the unexpended balance in every account, but no funds are subject to "sweep" from them.

In previous years, those unexpended revenues were not reported as surplus funds, but they are now being considered as such by the DOA and need to be verified, said Kennedy.

"We will not know until sometime in December, and maybe later, whether there's a surplus or a deficit depending on what the legislative auditor finds," he said.

According to previous statements by Kennedy, the state had a $141 million deficit at the end of fiscal 2014.

The DOA announced there was a surplus on Oct. 9, just days before the state bond division in the Department of the Treasury had arranged calls with rating agencies on the state's upcoming plans to sell $675 million in new and refunding general obligation bonds.

"I cancelled the rating agency calls because there was an obvious dispute over whether we had a surplus or deficit, and how we were computing it," Kennedy said Friday.

While he said the calls with analysts will be rescheduled, Kennedy was unable to estimate when or if the budget question could delay the pending bond sales.

"I want to try to get comfortable here, but I can't represent, and I won't represent, to potential investors in a bond deal something that isn't accurate," said Kennedy, who signs preliminary official statements for the state's bond issues.

"A fairer statement for all concerned would be that there's some uncertainty as to whether we have a surplus or a deficit," he said.

Because of the budget controversy, the State Bond Commission decided Thursday to push back the pricing date for a $475 million GO refunding, to Nov. 10 from Oct. 27. A new money $200 million GO sale is set for Nov. 20 but that date depends on getting ratings.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.