Monday, April 15, 2024

Louisiana Senate committee approves paying $400M debt in cash

by BIZ Magazine

By David Jacobs | The Center Square

A Louisiana Senate committee voted Monday to make a $400 million debt payment with cash rather than borrowing the money.

The House already has agreed to put $45 million toward the payment. The Senate Finance Committee agreed to spend another $355 million, using money made available last week when the Revenue Estimating Conference raised the official forecast of how much money the state expects to collect.

Louisiana has to cover its share of the cost of a multibillion dollar federally built levee system in the New Orleans area. The original deal called for the state to make payments over 30 years, which could have added up to $3 billion including interest.

Congress authorized forgiveness of the interest, however, if Louisiana could pay its $1.1 billion share by 2023. The first $400 million is due in September, and lawmakers had discussed selling bonds to pay for at least part of that debt.

Senators have amended a supplemental spending bill instead to make the first payment in cash.

“We think it was prudent to pay it in cash if we had it, and this year we happen to have it,” Senate President Page Cortez said.

Sen. Bodi White, who chairs the Senate Finance committee, said legislators have debated how best to handle the debt for a month. Rep. Jerome Zeringue, who chairs the House Appropriations Committee, noted the House didn’t know the REC would raise the revenue forecast when they voted on the major spending bills and said he agreed it was prudent not to incur additional debt.

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