For the past three years, Louisiana hasn’t paid any of the legal judgments it owes—and the tab is running.
With interest, the total amount owed to plaintiffs from lawsuits filed, primarily against the Louisiana Department of Transportation and Development, totals some $30 million—and that’s not including more than $100 million from a judgment the state never paid to plaintiffs in Tangipahoa Parish in connection with the 1983 flood.
Will this be the year the state finally pays up?
A lot depends on the outcome of the special legislative session, which began Monday. Though lawmakers won’t be taking up any legislation during the special session to pay off the judgments, they will take up the issue during the regular session later this year—provided they first pass a balanced budget during the current special session.
“A big part of it depends on how the special session plays out,” says Matthew Block, executive counsel to Gov. John Bel Edwards. “If we’re not able to work things out during the special session and the whole regular session is about making significant budget cuts then that limits our options for what we can do.”
Provided lawmakers do solve the state’s fiscal cliff problem during the special session, Block is hopeful the administration will be able to come up with a solution to the mounting judgments later this year, though he’s not yet prepared to say what it might entail or from what pot of money the payments would come.
“We think we have ideas of ways to come up with some money to start to work on some of these judgments,” he says. “Not only is it something where the state owes this money and should pay its bills, but some of these judgments are collecting interest.”
Unlike debt or retirement benefits for state workers, the state is not legally required to pay judgments against it. Though Block says it tries to honor its obligations, in lean budget years judgments sometimes don’t make it into the appropriation bill because, well, they don’t have to.
Gov. Bobby Jindal’s administration didn’t pay judgments during its last year in office and Edwards has not paid them since taking office.
While $30 million may not seem like much money given the state general fund is more than $9 billion, Block says every expense adds up.
“Thirty million dollars may not be much but we’ve had bigger and longer debates over much lesser amounts,” he says. “When every nickel and dollar counts, it’s a lot harder to find that money than you would think.”