Treasurer Says Fund is for Protecting Louisiana's Coastline, Not Laundering Money

BATON ROUGE, La. – State Treasurer John Kennedy testified this week in support of legislation that prohibits the state’s current practice of transferring non-recurring money in and out of the state’s Coastal Restoration Fund in order to balance the budget.

“When lawmakers set up this trust fund, it was meant to be a tool to protect Louisiana’s coastline, not a way to launder money to balance the state’s budget,” said Treasurer Kennedy. “Rep. Geymann’s legislation would put an end to this devious practice and force the state to make tough decisions when it comes to spending taxpayer’s money.”

Louisiana’s Constitution prohibits the use of one-time funds to pay for recurring expenses. However, state leaders routinely skirt the law by shuffling non-recurring money into the state’s Coastal Restoration Fund and back out again to satisfy budget needs.

It is estimated that this year’s budget hinges on $51 million in non-recurring revenue that will be transferred in and out of the state’s coastal fund. HB 490, a constitutional amendment by Rep. Brett Geymann, would prohibit the transfer or removal of monies from the trust fund for any purpose other than what the law originally intended.

“It’s time to put an end to the practice of using questionable accounting methods to patch holes in the state’s budget,” said Treasurer Kennedy. “HB 490 will force state leaders to take a hard look at the real problem, which continues to be over-spending. This year’s budget relies on $1 billion in one-time funds, meaning legislators will have to fill a $1 billion hole next budget year. HB 490 will force the state to address its addiction to spending head on, but without it, these bad habits will continue.”

HB 490 was reported favorably from the House Appropriations Committee on April 22 and now moves to the House Civil Law Committee.

Contact:
Sarah Mulhearn
(225) 342-0012
smulhearn@treasury.state.la.us