The Legislature will be asked to allocate $50 million of the $865 million surplus from fiscal 2008 to pay down a portion of the $88 million of outstanding revenue bonds issued for the Louisiana Department of Agriculture and Forestry by the Louisiana Agricultural Finance Authority.
State Agriculture Commissioner Mike Strain told the Press Club of Baton Rouge earlier this week that he will ask for the money to eliminate $15 million of debt service on the bonds.
“There’s $15 million a year that we could utilize differently,” Strain said.
The finance authority issued $100 million for the department, of which $88 million is outstanding. Strain said that about $58 million of the outstanding bonds can be called without penalty.
The agriculture department supports the debt with $3 million in agricultural fees and $12 million in revenue it receives annually as part of the state’s share from slot machines at horse racing tracks.
The projects financed with the bond proceeds include a $60 million sugar syrup mill, $31 million for firefighting equipment and a building in Opelousas, and $6 million for other facilities.
State law stipulates that the gambling revenue must be used for a boll weevil eradication program or “other agricultural, agronomic, horticultural, silvicultural, or aquacultural, industrial, or economic development programs.”
Strain said using the one-time surplus dollars to pay down the department’s debt would allow the state to use the funds for their intended purposes.
The bonds are rated Baa2 by Moody’s Investors Service.