Louisiana Gov. Edwards plans to sue state treasurer as Republicans block state revenue projection

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Louisiana Commissioner of Administration Jay Dardenne, seen here at the Press Club of Baton Rouge’s May 14 luncheon, said the state needs to find permanent solutions to its budget woes rather than temporary fixes.
John Dupont | The News

BATON ROUGE, La. (The Livingston Parish News) – Gov. John Bel Edwards’ administration says he plans to sue state Treasurer John Schroder over Schroder’s refusal to allow state government to spend unclaimed property money.

Schroder’s position was a point of contention at Friday’s Revenue Estimating Conference meeting, where the REC was unable to adopt an official forecast that decides how much money lawmakers will be allowed to spend this year.

The REC includes the governor’s commissioner of administration, the speaker of the state House, the state Senate president and an academic economist. All four must agree to adopt a forecast.

The top economists for the Louisiana Legislature and the administration included in their projections about $25 million from the state’s unclaimed property fund, which consists of abandoned financial assets that have not yet been claimed by the rightful owner. Since the money is never claimed all at once, the legislature historically has appropriated some of it for general fund spending.

Schroder, a Republican whose office handles unclaimed property, is refusing to turn over the money. He says it isn’t the state’s money to spend, and worries about what will happen if his office is faced with more claims than it can pay out.

“I do not believe that it was ever intended for this money to be spent by the state of Louisiana,” Schroder told The Center Square.

But Jay Dardenne, Edwards’ commissioner of administration, says the state has never failed to pay a rightful claim. The constitution gives the legislature, not the treasurer, the ability to appropriate money, he says.

“[Schroder] basically said they can sue me,” Dardenne said Friday. “So we’re going to accommodate that statement.”

Dardenne proposed adopting the more conservative forecast of the two presented Friday, which would have allowed for spending almost $170 million more than the last official forecast adopted in April. The new forecast would have been the basis for the executive budget Dardenne will present next week. He planned to include $25 million in proposed reductions in that budget, in case the unclaimed property money still isn’t available when legislators decide appropriations later this year.

But Senate President Page Cortez, a Lafayette Republican, said he didn’t want to adopt a forecast that included unclaimed property. He didn’t say whether he agreed or disagreed with Schroder’s position, but he said he didn’t think it was prudent to include the disputed dollars.

House Speaker Clay Schexnayder, R-Gonzales, proposed what he described as a compromise that would reduce the sales tax projection by $100 million, allowing the administration to craft a budget while still allowing the possibility to raise the forecast later. But Dardenne objected to tinkering with the forecast and adopting “arbitrary” numbers.

Due to the lack of an official forecast, the administration’s budget proposal will not be an official “executive budget” as defined by the state constitution. Historically, the executive budget becomes House Bill 1 and the starting point for budget negotiations when the legislature begins its session.

Friday’s REC meeting was the first for Cortez and Schexnayder after their colleagues elected them to leadership positions this month.

Though Republicans hold large majorities in both the House and Senate, House Republicans were unable to unite behind one candidate, allowing Schexnayder to be elected with Democrats’ support.

Some House conservatives are wary of Schexnayder, who now owes his position partly to Democrats. Schexnayder said after Friday’s meeting that his actions were not influenced by conservative pressure.

“The Revenue Estimating Conference was designed as a non-political way to determine the amount of revenue to be used in the development of the state’s budget,” Edwards, a Democrat, said. “Today’s action to try and modify the forecast is completely arbitrary and would create a dangerous precedent.”

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