The State of Louisiana ended Fiscal Year 2014 yesterday with a nearly $63 million deficit in what is known as the Overcollections Fund, which funds priorities such as Higher Education, according to State Treasurer John Kennedy.
"The Overcollections Fund has turned out to be an 'Undercollections Fund,'" said Treasurer Kennedy. "I'm very troubled by the ongoing budgeting and cash flow problems the state is experiencing. The use of contingency funding to support Higher Education is not fiscally responsible or sound education policy."
In addition, the outstanding $70 million seed loan taken out by the Division of Administration to fund Higher Education's cash flow needs for Fiscal Year 2014 was repaid using money appropriated by the Legislature for Fiscal Year 2015, causing the state to start the new fiscal year with a $63 million hole.
"Any agency that comes to the Treasury for their 2015 money will find that it very well may not be there as a result of this maneuver, and perhaps will require the agency to ask for a new seed loan," said Treasurer Kennedy.
"In the banking business, they call this 'check kiting.' We need to fix the state budget, stop spending more taxpayer money than we take in and get serious about stabilizing the funding for our critical priorities such as Higher Education."