State Treasurer Urges Refinancing of Debt

October 18, 2005
Reported by the Associated Press

Louisiana State Treasurer John Kennedy told a legislative steering committee that $1.4 billion could be gleaned by refinancing the state's debt and borrowing against the rainy-day fund. There's just one catch: the state refinanced its debt in January. Further refinancing would require congressional approval.

Kennedy says he's written to the Blanco administration twice about his ideas and not heard back. The state is in a financial crunch because Hurricanes Katrina and Rita affected a third of the state's revenue sources. Local governments that lost their tax bases in the storms also are in a bind.

The only solution the federal government has offered so far to help with day-to-day operating expenses is $750 million in loans that have to be repaid with interest. The Blanco administration is preparing for a $1.5 billion hit to the state budget.

Officials warned last week that public health care, education and more than 18,000 state jobs might have to be cut to deal with the crisis.