Savings impact projects across Louisiana - from roads to mortgage bonds

BATON ROUGE, LA – Louisiana taxpayers saved more than $600 million in four years because the State Bond Commission gave approval to refinancing bonds for interest savings, according to the commission’s chairman, State Treasurer John Kennedy.

“Just like homeowners refinanced their homes to lock in lower interest rates, we refinanced bonds to save taxpayers money,” said Treasurer Kennedy. “We didn’t sit by idly when interest rates dropped. We helped the state as well as municipalities throughout Louisiana to secure savings.”

The refinancings impact infrastructure and economic development projects across Louisiana. The projects are financed through bonds. By refinancing existing debt, state and local governments unlocked savings that will benefit taxpayers by erasing debt faster.
State government saved $307 million in four years. A major example was the refinancing of La. 1 to prevent toll prices from ballooning.
Local governments saved $285 million in four years. Just one example is New Orleans’ refinancing of $315 million in sewerage and water bonds to save more than $19 million. The savings represent how much taxpayers would have paid in additional interest without the refinancing.
“The goal is to reduce debt by lowering the amount of interest that has to be paid,” Kennedy said. “Homeowners refinance their homes to pay less interest. We refinanced debt to ensure that the public pays less interest.”
Ascension Parish refinanced more than $7 million in general obligation school bonds earlier this year to reduce its interest rate.

“Through the refinancing of these general obligation bonds, we were able to save the taxpayers over $1.4 million,” said Ascension Parish Schools Superintendent Patrice Pujol. “Our school board is committed to being strong fiscal stewards of taxpayer dollars as we meet the tremendous demands placed on our facilities by the exponential student population growth of the Ascension Parish School System.”
Kennedy and the State Bond Commission continue to keep an eye on interest rates. Municipal rates have fallen in recent months, but they are expected to rise over the next year or two.
“I’m thrilled by the savings we were able to achieve,” Kennedy said. “The savings will reduce the debt burden borne by taxpayers in Louisiana.”

Contact:
Michelle Millhollon
(225) 342-0012
mmillhollon@treasury.state.la.us