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 Press Releases

7/24/2015
Treasury Auctions $63 Million in Certificates of Deposit
BATON ROUGE, La. - Louisiana banks bid online this week to pay the state of Louisiana interest on $63 million that will be placed in certificates of deposit (CDs), according to State Treasurer John Kennedy.
 
"These web-based auctions are a low-risk investment with a good return," said Treasurer Kennedy. "We provide Louisiana banks with financial liquidity, and we earn interest doing it."
 
 Using a competitive Internet auction website called www.BidLouisiana.com, the Louisiana Department of the Treasury accepted interest rate bids from banks across the state during a 30-minute auction. A bid consists of the amount of money the bank wants and the interest rate it is willing to pay. The higher the interest rate, the more the state makes on the investment. The interest rate on the bids ranged from 0.150% to 0.140% with 17 banks participating.
 
 "We limit banks to $5 million each," said Treasurer Kennedy. "We were able to deposit money in CDs at every bank that bid. By using the Internet, we make CDs more available for banks."
 
 In 14 years, the state has accepted $3 billion in bids using BidLouisiana, resulting in $25.9 million in total earnings for the state. The Treasury is allowed by law to competitively bid up to 50 percent of state funds available for investment in CDs. For more information, visit the BidLouisiana website at www.BidLouisiana.com.
7/17/2015
State Revenues Drop

BATON ROUGE, La. - The June 2015 Net Receipts Report shows that total state revenue from six major taxes for the 2014-2015 fiscal year (July 1, 2014, to June 30, 2015) was $7.769 billion, a $3 million decrease compared to that time last year. Sales, personal income and gasoline tax receipts rose slightly, but severance and corporation and franchise tax receipts continue to lag.

The report includes receipts for sales tax, individual income tax, general severance tax, corporation and franchise tax, gasoline and special fuels tax and miscellaneous taxes cash receipts. The report does not include self-generated fees, statutorily dedicated revenue or federal receipts.

General sales tax cash receipts for FY 2014-2015 to-date are $2.713 billion, for an increase of $42 million or 2 percent compared to last year. General sales tax cash receipts this time last year were $2.671 billion, which was $46 million more than the prior year.

Individual income tax cash receipts for FY 2014-2015 to-date are $2.914 billion, for an increase of $92 million or 3 percent compared to last year. Individual income tax cash receipts this time last year were $2.822 billion, which was $89 million more than the prior year.

General severance tax cash receipts for FY 2014-2015 to-date are $735 million, for a decrease of $92 million or 11 percent compared to last year. General severance tax cash receipts this time last year were $827 million, which was $17 million less than the prior year.

7/16/2015
State Bond Commission Approves $153 Million for Local Projects

BATON ROUGE, LA - The State Bond Commission approved $153 million for projects statewide and approved more than $7.2 million in savings at its July 16 meeting, according to State Treasurer John Kennedy.

"We approved projects that will improve schools, build a hospital and construct housing for families," said Treasurer Kennedy. "These projects touch every corner of the state."

Among the individual projects approved were:

  • Acadia Parish, $1,500,000 in Excess Revenue Bonds for the city of Rayne: for various capital improvements.
  • Caddo and Lafayette Parishes, $12,000,000 in Multifamily Housing Revenue Bonds for the Public Finance Authority's Agape-Himbola Manor, LLC & Agape-Canaan Towers, LLC: for acquisition and rehabilitation of facilities located in Lafayette and Shreveport.
  • Calcasieu Parish, $10,000,000 in Revenue Bonds for Memorial Hospital Service District's Lake Charles Memorial Hospital Project: for acquisition, construction, renovation and equipping of hospital facilities generally for Southwest Louisiana Hospital Association (SLHA), to be owned by the SLHA and operated by Southwest Louisiana Health Care System, Inc.
  • Desoto Parish, $3,500,000 in Limited Tax Revenue Bonds for the DeSoto Parish School Board: for acquiring, constructing, improving, equipping, and furnishing school buildings and other related facilities.
  • East Baton Rouge Parish, $39,000,000 in Single Family Mortgage Revenue Refunding Bonds for the Louisiana Housing Corporation: saving taxpayers $7,166,824.
  • East Baton Rouge Parish, $16,000,000 in Multifamily Housing Revenue Bonds (Volume Cap) for the Louisiana Housing Corporation's Port Royal Apartments Project: for acquisition, construction and equipping of a 192-unit multifamily apartment facility in East Baton Rouge Parish.
  • Jefferson Parish, $2,500,000 in Revenue Bonds for the Jefferson Parish Economic Development and Port District: for acquisition of an office building and technology incubator in the Churchill Technology and Business Park from Forward Jefferson.
  • Jefferson Parish, $15,000,000 in Sales Tax Bonds for the city of Kenner's DEQ Project: for (1) priority projects (a) Chateau Transfer Force Main replacement; (b) demolition of abandoned digestor at Wastewater Treatment Plant (WWTP) #1, (c) demolition of WWTP #2; (d) Firehouse Road Force Main Replacement; (e) Odor Control Improvements at Vintage and Medoc Lift Station and (f) Emergency Power Improvements at the WWTP; (2) alternate projects (a) new Pump at the 10th and Maria Lift Station; (b) warehouse for emergency generators; (c) fuel system improvements for emergency power at the WWTP; (d) repairs to 48-inch effluent force main and (e) rehabilitation of existing gravity sewers and (3) funding a reserve fund, if required.
  • Lafayette Parish, $10,000,000 in Certificates of Indebtedness for the Lafayette Parish School Board: for (1) purchasing, acquiring and equipping school buses, and (2) constructing, and improving schools and school related facilities, including the necessary sites, equipment and furnishings.
  • Orleans Parish, $15,000,000 in Tax Increment Bonds (Taxable) for the city of New Orleans' St. Thomas Economic Development District: saving taxpayers $27,000.
  • Orleans Parish, $6,000,000 in Revenue Refunding Bonds for the Health Education Authority of Louisiana's YMCA of Greater New Orleans Project: for (1) approximately $2,335,000 Refunding Bonds, of which $405,000 to be issued as taxable, and $1,930,000 to be issued as tax-exempt, refinancing existing indebtedness secured pursuant to a prior Financing and Lease Agreement between Regions Equipment Finance Corporation and the LCDA dated December 1, 2010 on behalf of the YMCA, (2) approximately $3,665,000 Revenue Bonds, acquisition, design, construction, furnishing and equipping of certain facilities and property located in the Primary Service Area of the issuer to provide a flagship location for YMCA services and (3) funding a debt service reserve fund, if necessary.
  • Rapides Parish, $1,990,000 in Certificate of Indebtedness for the Rapides Parish School Board: for (1) approximately $890,000 for refunding and extending a portion of Certificate of Indebtedness, Series 2004 (consisting of the interest bearing certificates of said issue) and (2) approximately $1,100,000 for purchasing school buses and equipment.
  • St. Helena Parish, $2,880,000 in Sales Tax Bonds for the St. Helena Parish School Board: for (a) acquiring, constructing and improving public school buildings and facilities, including the acquisition of equipment, (b) approximately $420,000 Refunding Bonds, refunding Sales Tax Bonds, Series 2014.
  • St. Tammany Parish, $1,300,000 in Gas Utility Revenue Bonds for the town of Madisonville: for constructing and acquiring extensions, improvements and replacements to the natural gas utility system, including appurtenant equipment, accessories and properties.

The Louisiana State Bond Commission meets monthly to review and approve applications from parishes, municipalities, special taxing districts, and other political subdivisions of the State requesting authority to incur debt. For more information, visit www.LATreasury.com.

 


 

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 Opinion Columns

6/30/2015
The Problem Is Spending

Most Louisianians deeply mistrust government and think a large portion of every dollar government spends is wasted. The recently completed legislative session accomplished little to disabuse them of that notion.


Sure, we're all relieved the legislature did not cut higher education any further and that our state hospitals and medical schools will remain open. How that was accomplished, however, did not solve the huge structural deficit in Louisiana state government finances.

 

Fundamentally, Louisiana state government does not have a revenue problem. We have a spending problem. Each year, no matter how much revenue we have, we spend more revenue than we take in, and when we do spend money, we don't spend enough of it on things taxpayers need as opposed to things politicians want.


Here are some examples of ways Louisiana state government can save money, none of which our legislature devoted any time to in the session:

 

1.  Executive branch departments are top heavy. They have too many generals and not enough foot soldiers. The Legislative Auditor has found that 22% of all the managers in classified state service manage one employee. The average manager manages four employees. We need to limit layers of management in each department to four or five with a maximum of six for large departments, allocate one manager per ten staff, and limit clerical staff to 15% or less.


 2. According to the Public Affairs Research Council, each year Louisiana has 900,000 taxpayer-funded visits to emergency rooms for nonemergencies, such as acne, insomnia, pregnancy tests, infertility counseling, obesity counseling, diaper rash, and examinations for eye glasses. (PAR Report June 2006). It costs many times more to treat a patient in an ER than a private clinic. Neither federal nor state law requires an emergency room to treat a patient for a nonemergency. Louisiana should adopt the Patient Navigator Program to steer these patients to physicians who can treat them, through the Medicaid program, in private clinics. We should also adopt a statewide ER visit database, like Washington state, to track chronic abusers, and copy New Mexico's NurseAdvice Call Center and Wyoming's 24/7 Nurse Line to help keep routine care patients out of our emergency rooms.


 3. According to the state's 2014 Medicaid Report, 3% of the state's 1.4 million Medicaid patients account for 43% of the $8 billion in taxpayer money spent each year. That's $86,000 per patient. Louisiana should crack down aggressively on Medicaid fraud. Then we should implement an aggressive chronic disease management program, like the Stanford School of Medicine program used in Florida and other states, to save money treating chronically ill patients without sacrificing the quality of care.


 4. Louisiana has over 350 "statutory dedications", which are special funds set up by majority vote of the legislature into which $3 billion to $4 billion automatically flows annually without having to compete with other expenditures, such as higher education and roads. Many of these statutory dedications, such as the Transportation Trust Fund, the Rainy Day Fund, and funds such as the Boll Weevil Eradication Fund (for which businesses self-assess themselves a fee in return for a government service) are necessary. Others are not. The legislature should objectively review each statutory dedication and eliminate as many as possible to free up money for more important needs.


 5. Louisiana state government has 19,000 consulting contracts, according to a Legislative Auditor report issued in May of 2015. More than 4,500 of them are "off the books" and not even reported to the Office of Contractual Review. Additionally, though Louisiana colleges and universities are starving for money, the state has or has had consulting contracts with the University of Tennessee, the University of Georgia, Texas A&M, the University of Arkansas, Rutgers University, the University of Southern Mississippi, Oregon State University, Vanderbilt University, Duke University and many others. We should eliminate 10% by value of those consulting contracts funded with state money. The Governor should then write all the consultants funded with state money that are not eliminated and ask for a 5% discount. Additionally, all consulting contracts funded with federal money should be offered first to Louisiana universities.


These five ideas will save millions of taxpayer dollars. There are others. The truth is Louisiana doesn't have a revenue problem nearly as much as we have a spending problem.
6/19/2015
Governor Correct To Veto TOPS Legislation

Imagine it's your high school graduation day. You've worked hard, and your parents want to reward you. They tie a big bow around a car and hand you the keys. They tell you the car is a graduation gift. 


Now imagine how you'd feel if your parents forgot to mention that they expect you to make the car payments. Suddenly, that shiny car doesn't look so shiny. 


As a state, we would have been making a similar false promise if Senate Bill 48 had become law and allowed us to saddle our students with expenses that TOPS should cover. Governor Jindal did the right thing in vetoing this no doubt well-meaning but ill-conceived legislation.


TOPS is one of the greatest programs we've ever established in Louisiana. Through TOPS, students who study hard and keep up their grades can get a college education courtesy of the state. It's the smartest thing we've ever put in place.


SB48 would have diluted the program's value by allowing TOPS to remain stagnant while tuition increases. The bill would have forced the Legislature to vote on whether TOPS awards should be boosted to match tuition hikes. In other words, our students could have been left responsible for part of their tuition bill.


Let me boil down what SB48 truly was: It was an attempt to cap TOPS.


TOPS has sent a quarter of a million kids to college in Louisiana. That's a staggering statistic considering the state's population is only 4.65 million.


SB48 existed because legislators blew the opportunity this year to streamline state spending in order to safeguard priorities such as health care and higher education. They balanced the state budget with $145 million in efficiencies that probably won't materialize. They relied on $300 million in revenue that will have to be replaced in a year's time. They stuffed the state construction budget with $377 million in projects that the state cannot afford. 


The Legislature put the budget together with duct tape, and they're at the end of the roll. Ten years ago, Louisiana had a budget of $16 billion. Next year's budget is $24.5 billion. Louisiana's population hasn't exploded in a decade, forcing the state's budget to exponentially grow. We're simply spending beyond our considerable means.

 
TOPS should not be a casualty of the state's spending problems. We can't promise to pay college tuition and then only fulfill part of the promise. We can't build up the American dream and then give our kids an invoice for it.

6/18/2015
Don't Make TOPS A Casualty
Imagine it's your high school graduation day. You've worked hard, and your parents want to reward you. They tie a big bow around a car and hand you the keys. They tell you the car is a graduation gift.

Now imagine how you'd feel if your parents forgot to mention that they expect you to make the car payments. Suddenly, that shiny car doesn't look so shiny.

As a state, we will be making a similar false promise if Senate Bill 48 becomes law and allows us to saddle our students with expenses that TOPS should cover. It is my hope that Governor Jindal will consider vetoing this no doubt well-meaning but ill-conceived legislation.

TOPS is one of the greatest programs we've ever established in Louisiana. Through TOPS, students who study hard and keep up their grades can get a college education courtesy of the state. It's the smartest thing we've ever put in place.

SB48 would dilute the program's value by allowing TOPS to remain stagnant while tuition increases. The Legislature would have to vote on whether TOPS awards should be boosted to match tuition hikes. In other words, our students could be left responsible for part of their tuition bill.

Let me boil down what SB48 truly is: It's an attempt to cap TOPS. Thankfully the governor has recognized the legislation for what it is and voiced his opposition for the bill. I can only hope that he will take a hard look at the bill that landed on his desk.

TOPS has sent a quarter of a million kids to college in Louisiana. That's a staggering statistic considering the state's population is only 4.65 million.

SB48 exists because legislators blew the opportunity this year to streamline state spending in order to safeguard priorities such as health care and higher education. They balanced the state budget with $145 million in efficiencies that probably won't materialize. They relied on $300 million in revenue that will have to be replaced in a year's time. They stuffed the state construction budget with $377 million in projects that the state cannot afford.

The Legislature put the budget together with duct tape, and they're at the end of the roll. Ten years ago, Louisiana had a budget of $16 billion. Next year's budget is $24.5 billion. Louisiana's population hasn't exploded in a decade, forcing the state's budget to exponentially grow. We're simply spending beyond our considerable means.

TOPS should not be a casualty of the state's spending problems. We can't promise to pay college tuition and then only fulfill part of the promise. We can't build up the American dream and then give our kids an invoice for it.
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