Friday, October 31, 2014

Friday, October 31, 2014

Feud over bond issue heats up; Adley wants rainy-day dollars used for road projects; Poll shows broad support for elements of Obamacare; and Possible document destruction at OGB

Feud over bond issue heats up
With state Treasurer John Kennedy refusing to sign off on the issuance of $200 million in state debt to fund construction projects, Commissioner of Administration Kristy Nichols is asking the Legislature for help. The debt was approved earlier this month by the state Bond Commission, which Kennedy chairs, but the treasurer has refused to sign the official documents necessary for bond rating agencies to rate the bonds. Kennedy has said he won’t sign off until questions have been resolved over whether the state finished the 2014 fiscal year with a budget surplus or a deficit.

Nichols, in a letter to legislators, says Kennedy needs to sign the documents by Monday to ensure that projects aren’t delayed.

If the capital outlay fund is depleted before bonds are issued, critical capital outlay projects across the state will be delayed, including University Medical Center in New Orleans, LSU’s Patrick Taylor Hall, the National World War II Museum, LSU Shreveport’s Children’s Hospital, and important water, fire and critical service upgrades.

Kennedy quickly fired back in a written statement, saying the state has $600 million available for construction projects while the matter is resolved and accusing the governor’s budget office of practicing “make-believe.”

The Division is asking me to sign a document that could violate the anti-fraud provision of the U.S. Securities and Exchange Act.  We are working on language to try to prevent that, and we have plenty of time to do a bond issue.  In the meantime, there is ample money for state construction projects.  After all, the Division says we have a budget surplus.

 

Adley wants rainy-day dollars used for road projects
State Sen. Robert Adley has been leading a group of legislators around the state to talk about Louisiana’s massive backlog of transportation needs – $12.3 billion and counting. But Adley knows that the easiest way to solve the problem – raise a state gasoline tax that is among the lowest in the country – is also politically unlikely in an election year. So as the transportation “road show” stopped in Baton Rouge, Adley proposed an alternative idea that was reported by Nola.com: Divert future dollars from the state rainy-day fund into road and bridge projects.

“This concept of touching the rainy day fund gives some people heart burn,” Adley said. “Government is not in the business of creating savings accounts. If we don’t need the money, we need to give it back to the people, or we need to spend it on what we do need. Right now the largest demand in this state is funds for infrastructure.”

 

Poll shows broad support for elements of Obamacare
Surveys have consistently shown that most Americans are opposed to the Affordable Care Act. But when you break down the numbers and start asking questions in a different way, a new picture emerges. Such is the case with a new poll from the University of New Orleans that has some interesting results for state policymakers to ponder. While only 36 percent of Louisianans favor the 2010 health overhaul (compared to 56 percent opposed), fully 62 percent of the public thinks the state should accept federal dollars for Medicaid expansion. And when people were asked about specific elements of Obamacare, the poll again found broad public support.

Three-fourths agreed with the creation of an insurance marketplace for individuals to compare plans and purchase health insurance at a competitive rate. Seventy-six percent thought health insurers should be required to cover anyone who applies, including those with preexisting conditions. Nearly 60% favored requiring that all Americans have health insurance, with the government providing financial help to those who can’t afford it.

 

Possible document destruction at OGB
Just when it seemed like the ordeal surrounding the Office of Group Benefits couldn’t get any more strange, along comes fresh accusations from Secretary of State Tom Schedler that Gov. Bobby Jindal’s administration has been destroying records in potential violation of state law.

The state Office of Group Benefits this summer stopped sending Schedler’s office original copies of member medical claims for preservation. OGB oversees health insurance for nearly a quarter million state employees, public school teachers, retirees and their families. And Schedler said he had “reason to believe” that the records had been destroyed without prior approval in violation of state law. On Thursday, Commissioner of Administration Kristy Nichols said records are still available, they just were not being shared with Schedler’s office because of OGB member privacy concerns.

The flap is rooted in recommendations from an outside consultant hired by the state earlier this year to look for ways the state can save money.

 

Number of the Day
$485 million –
Balance in the state’s rainy-day fund (Source: Nola.com)