All posts by Mark Ballard

Investors pull out of LSU bond sale

The State Treasurer Friday morning reported that national investors pulled out of a large portion of a $114 million bond deal for LSU amid concerns over budget instability and state support for Louisiana colleges and universities.

“We’re trying to sort out the facts. This is obviously not a welcome development,” State Treasurer John Kennedy said Friday in a press release. “It could have ramifications for other universities in Louisiana and for the state’s overall bond rating, and it could impact the interest rate on future state bond issues, including an upcoming $300 million state general obligation bond issue.”

LSU on Tuesday issued $114 million in revenue and refunding bonds to generate money and to save taxpayer dollars. Proceeds from the bond sale would have funded a Family Housing Complex, residence halls and a Student Health Center and also would have saved interest on existing debt. The bonds were priced on Tuesday.

Earlier this week, Moody’s Investors Services lowered LSU’s credit outlook from positive to stable because of limited prospects for sustained revenue growth. Moody’s action puts LSU one step away from a negative outlook, which could result in a downgrade for the university’s credit rating.

Louisiana is overpaid in tobacco settlement

In addition to the state’s other fiscal problems, Louisiana now may have to repay, in short order, millions of dollars received in error from multi-billion dollar settlement with cigarette manufacturers.

In letter delivered late Thursday, Attorney General Buddy Caldwell informed top state officials that because of an accounting error, Louisiana was overpaid and may be on the hook for about $17 million – “although there has not yet been a final calculation.”

The underpaid states cannot wait until next year, meaning Louisiana will be expected to reimbursed the overpaid amount, the letter said.

PricewaterhouseCoopers, the international accounting firm headquartered in London, “made significant errors in determining the 2015 annual” payments from the Master Settlement Agreement into which tobacco companies pay each year as part of a deal to end lawsuits filed by the states in the 1990s over health problems the caused by cigarette smoking. PricewaterhouseCoopers, or PwC, is tasked with calculating annual payments to the states.

“Specifically, PwC appears to have underpaid approximately half the states and overpaid the remaining half. Louisiana is among those states receiving an overpayment,” Caldwell stated in the letter written by Assistant Attorney General Gol Sheikhivigeh Hannaman.

The letter was officially sent to Commissioner of Administration Kristy Nichols and State Treasurer John N. Kennedy, and copied to eight other top state officials.

Neither Nichols nor Kennedy had seen letter, which was released after office hours.

Louisiana should have received $138.3 million as its share of the tobacco settlement on April 15 and April 17. The state actually got $155.6 million.

Because the state sold 60 percent of the settlement for a cash payment in 2001, about $93.4 million was sent directly to repay that bond. The remaining portion of the 2015 payment, about $62.2 million, was electronically transferred to Treasurer Kennedy. Of that amount, about $46.7 million is deposited with the Millennium Trust to help pay for TOPS, the popular scholarship that covers tuition in state colleges and universities for qualified students. The rest went into the Louisiana Fund.

The news comes as legislators are being pushed by the Jindal administration to sell the remainder of the tobacco settlement fund for about $750 million.

Cassidy to host dyslexia education event Friday

U.S. Sen. Bill Cassidy, R-La., is hosting Friday a luncheon to discuss dyslexia and education.

Drs. Sally and Bennett Shaywitz, founders and directors of the Yale Center for Dyslexia and Creativity will join Cassidy for a discussion called “The Science of Dyslexia: Aligning Education with Science.

The event, which is open to the public, begins at 11:30 a.m. and continues to 1 p.m.  It takes place at the C.B. Pennington Jr. Building and Conference Center, 6400 Perkins Road, Baton Rouge.

Bobby Jindal’s sense of humor

BY TYLER BRIDGES

Louisiana Gov. Bobby Jindal was known for displaying a wicked sense of humor – before he became governor. But he flashed it Monday, privately, in an unexpected place.

 Jindal was in the State Capitol, waiting to enter the House chamber to address legislators and kick off the 2015 legislative session. Standing by to escort him were several lawmakers, including state Rep. Jeff Arnold, D-New Orleans.Bobby Jindal

 Just then, Arnold got a text from Arnold Baker, a friend from when the two men worked for then-New Orleans Mayor Marc Morial. Baker was passing along the news that Jindal had appointed him to a prized position on the New Orleans Dock Board.

 Baker, who founded Baker Ready Mix Concrete and who chaired the National Black Economic Chamber of Commerce, edged out Entergy New Orleans President Charles Rice and attorney James Carter, who formerly served on the city council.

 Arnold had sent a letter to Jindal recommending Baker and upon getting Baker’s text reminded the governor of this and thanked him as well. Then Arnold’s phone rang. He told Jindal that it was Baker but that he didn’t dare answer it at that moment.

 Go ahead, the governor said, and then grabbed the cell phone from Arnold. Meanwhile, the Senate president’s voice, from the chamber, could be heard beginning to introduce the governor.

 Jindal congratulated Baker and then in an exaggerated tone of voice told him that the only reason he got the appointment was entirely because of Arnold’s support. Everyone around Jindal cracked up, including Baker, who thought it was actually Arnold impersonating the governor. Jindal said goodbye and walked through the double doors that lead into the House chamber.

 “Jindal definitely caught me by surprise,” Baker said several days later. “He played me. No one told me he was getting on the line.”

 Follow Tyler Bridges on Twitter @TegBridges.

 

 

Inventory tax repeal to be first bill heard in committee

Advocate Staff Photo by Travis Spradling. State Sen. Neil Riser, right, R-Columbia, accepts congratulations Wednesday from bill opponent state Rep. Roy Burrell, left, D-Shreveport, after Riser's  Senate Bill 303 advanced out of the Louisiana House Committee on the Administration by a 9-5 vote.  The bill would call for a tougher legal hurdle, in order  to restrict the right to keep and bear arms in Louisiana. 'To me, this is the most honorable bill I h’ve handled,'  Riser said.    At right is committee member Rep. Mickey Guillory, D-Eunice.

Advocate Staff Photo by Travis Spradling. Republican State Sen. Neil Riser, right, chairs the Senate Revenue & Fiscal Affairs Committee. He is shaking hands with state Rep. Roy Burrell.

By TYLER BRIDGES

A bill that would repeal the Louisiana’s business inventory tax is the first and only tax measure that the state Senate tax-writing committee will hear on Monday.

State Sen. Neil Riser, R-Columbia, who chairs the Senate Revenue and Fiscal Affairs Committee, said he was acceding to a request by the bill’s sponsor, state Sen. Robert Adley, R-Benton, to hear the measure, Senate Bill 85. It would have to be approved by the state Legislature and the state’s voters as a constitutional amendment.

Eliminating the inventory tax would save the state treasury $452 million because businesses actually receive far more in refunds than they pay in tax liability.

But under a complicated mechanism, the money paid by businesses actually goes to local governments so they would be out $452 million. Adley’s bill will undoubtedly produce great angst among local government officials.

In choosing to repeal the inventory tax, Adley decided not to push – at least for now – an alternative bill sought by Gov. Bobby Jindal that would eliminate the tax refunds that businesses receive for paying the tax. They add up to $376 million per year.

“I know there are some legislators who want to repeal the inventory tax all together. I think that’s a discussion that needs to be had,” Jindal told reporters during a press briefing Thursday.

 

 

 

New traffic patterns and security confuses opening day at the Legislature

Heavy rain and confusion over new security procedures around the State Capitol, which were rolled out for the first time Monday morning.

Map of changes around State Capitol access

New traffic patterns mystified state workers who had followed the same routines for years.

Louisiana legislators officially gavelled in the 2015 session, with Senate President John Alario introducing the opening prayer by saying this annual meeting of the Louisiana Legislature would need lots of prayer.

State lawmakers are facing a $1.6 billion deficit and hope to balance the budget without significantly deeper cuts to higher education and health care.

Otherwise, today was light, paper-shuffling day and both chambers adjourned as expected around 3 p.m.

A handful of committees are expected to meet Tuesday and Wednesday, but the real committee work won’t get going until next week.

The Legislature blocked much of the access with security bollards and routed traffic to new entrances in heavily guarded parking areas.

Visitors can find parking in a lot on the riverside of River Road near the Pentagon Barracks apartments.

Traffic off Interstate 110 pass by the Governor’s Mansion, then west around the Arsenal Park. But access to the east of the State Capitol is restricted and traffic now continues along the back road to North Third Street.

Map of the traffic patterns is here: 041315 State Capitol access

Drivers with parking passes for the handicapped spaces, the restricted lots in front of the Capitol on the east side, and the Garden lot on the east side of the State Capitol need to drive down North 5th Street, which is now two-way, from Spanish Town Road, then turn left at Arsenal Park (where last week such a turn was illegal).

Security measures claim first victim

Republican State Rep. Paul Hollis, of Covington, became the first victim of the new security measure at the State Capitol.

Photo by MARK LAMBERT -- Legislator crashes into new security bollards at State Capitol

Photo by MARK LAMBERT — Legislator crashes into new security bollards at State Capitol

Monday, the day 2015 session of Louisiana Legislature opened, was the first time new routes for traffic, new parking arrangements and new security protocols went into effect. State Capitol parking lots are now protected by bollards, which raise and lower to allow credentialed drivers access.

Year-round staffers have been joking for weeks about how long it would take before the new security measures caused a crumpled fender.

Hollis was the first.

Hollis told The Associated Press he was inching his Audi A8 through a parking lot exit when a brand new security system engaged, shooting two pylons through the front of his car, damaging the automobile.

Hollis says he hit his windshield and his air bag deployed. He cut his wrist in the accident, shattered the face of his watch and was shaken up, but otherwise says he’s OK.

Of the new security system, Hollis says: “It’s definitely got pros and cons.”

Meghan Parrish, a spokeswoman for the Division of Administration, could not immediately say who would pay for the damage or why the system – part of a $5 million upgrade – activated.

Monday session at a glance

At a glance

2015 regular legislative session

  • 11:30 a.m.: Joint Transportation, Highways & Public Works Committee meets
  • 12 p.m.: Louisiana House of Representatives and Senate officially begin
  • 1 p.m.: Gov. Bobby Jindal addresses joint session

Watch governor’s speech

Keep up with the session

Follow the 2015 legislative session with The Advocate

  •  online: http://theadvocate.com/

 on Twitter: #Laleg

Here’s who to follow:

  • @MarkBallardCnb
  • @elizabethcrisp
  • @WillSentell
  • @MarshaShulerCNB
  • @tegbridges

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La Legislative Session Opens

Louisiana legislators officially gaveled in the 2015 session, with Senate President John Alario introducing the opening prayer saying this meeting would need lots of prayer. Gov. Bobby Jindal speaks to the joint session of the Legislature at 1 p.m.

Otherwise, today is light, paper-shuffling day and both chambers are expected to adjourn around 3 p.m.

A handful of committees are expected to meet Tuesday and Wednesday, but the real committee work won’t get going until next week.

U.S. Rep. Charles Boustany backs U.S. David Vitter for governor

Lafayette Congressman Charles Boustany came out early and endorsed Wednesday fellow Capital Hill Republican U.S. Sen. David Vitter’s gubernatorial bid.

Lafayette City-Parish President Joey Durel also endorsed Vitter, of Metairie.

The election is in October.

Three other major candidates have announced their intentions: Public Service Commissioner Scott Angelle, of Breaux Bridge; and Lt. Gov. Jay Dardenne, of Baton Rouge; both Republicans, and State Rep. John Bel Edwards, D-Amite.