The siphoning plan initially was part of the House budget proposal, but it was removed by the Senate amid concerns about whether it was constitutional.They were trying to use a mechanism for debt service and use it as a back door to impose departmental cuts they couldn't pass through the ordinary process. It's probably not legal despite Barras's assertions and Fake Governor Kennedy's approval. Anyway it's certainly dishonest. Like I said, it now looks like we don't have to worry about it now. But I wanted to flag it before the session ended.
Barras, a banker, said he’s studied the state laws related to the plan, as well as the funds that would take about a 3.3 percent hit, and said he believes the state should have been taking a cut of the money that flows through the debt fund all along.
“It’s just pretty eye-opening the benefit to our budget,” he said.
Louisiana’s unique Bond Security and Redemption Fund is used to bolster the state’s credit rating and reassure bondholders. Nearly all money that flows into the treasury goes through that fund.
Under state law, certain funds normally protected under statutory and constitutional dedications for certain services can be skimmed to help pay down the debt. For the past 18 years, the state has relied largely on general fund dollars to make debt payments, though.
“We’ve been taking out of the wrong account,” Barras said. “It’s just too strong for me to let it go by.”
Much more work to do starting this week. Special Session Part Deux is coming Monday.