Budget has $134M gap as fiscal year nears its end
BATON ROUGE, La. (AP) — More than $134 million in piecemeal funding that Gov. Bobby Jindal and lawmakers used to balance this year's budget has yet to arrive in the state treasury, with the end of the fiscal year only days away.
The dollars are largely supposed to come from hospital lease payments, property sales and hurricane recovery spending reimbursements, according to a list from Treasurer John Kennedy's office.
Commissioner of Administration Kristy Nichols, the governor's chief budget adviser, said she expects the money to arrive and the 2013-14 budget to avoid a deficit.
"Fiscal year 2014 is fully funded. Any speculation to the contrary has no basis in fact," Nichols said in a statement.
But Kennedy disagrees, saying the administration will have to use accounting tricks to stay on track, like tapping into money planned for next year's budget.
"We do have a deficit this fiscal year. We clearly do. Now, it can be papered over through a payday loan," Kennedy said. "Even if they're right legally, it's not fiscally responsible."
The fiscal year ends Monday, but the Jindal administration says the year doesn't close for accounting purposes until Aug. 14, allowing more time for the expected funding to appear.
Jindal and lawmakers balanced this year's $25 billion budget with $413 million from property sales, legal settlements, lease payments, loan repayments and other financing arrangements. About $279 million has been collected so far.
Much of that piecemeal financing — plugged into what is called the Overcollections Fund — was earmarked for the state's public colleges.
The Jindal administration has borrowed $70 million from other treasury funds to keep dollars flowing to college campuses while it waits for the outstanding money to arrive. That borrowing must be repaid, presumably with the outstanding money that has yet to arrive.
"The higher education seeds requested earlier this year will be repaid by the close of the fiscal year on Aug. 14, as promised," Nichols said.
Meanwhile, the other dollars that haven't been collected are owed to the attorney general's office, the transportation department, the homeland security department and other agencies, said Laura Lapeze, chief financial officer for the treasury.
Nearly half the money that hasn't yet arrived is tied to lease payments owed from private entities that have taken over management of the LSU hospitals. Nearly $64 million of the lease money used in the budget hasn't been paid.
Also outstanding is $18 million from the sale of state hospital property in St. Tammany Parish and $25 million tied to disaster recovery reimbursements.
Kennedy said the hospital sale will generate less money than budgeted and other financing sources won't come in as planned.
"This is a hell of a way to run a railroad," he said.
Any gaps from some sources of financing planned for the Overcollections Fund will be made up by other payments, Nichols said.
She said an anti-fraud effort by the revenue department has drummed up $13 million more than expected and hospital lease payments will generate money above what was included in this year's budget.