Louisiana may need to again take out a short-term loan for as much as a half-billion dollars to keep cash flowing to agencies and bills on track for payment.
As The Associated Press reports, the State Bond Commission, which oversees state borrowing, today agreed without objection to move forward with the process for borrowing up to $500 million this budget year.
But officials stressed they hope they can avoid the bank loan.
“I would couch this as a ‘just in case’ resolution,” says Jay Dardenne, Gov. John Bel Edwards’ commissioner of administration. “We’re hopeful we’re not going to have to do this.”
A final decision will be made in the coming weeks once agency cash flow projections are complete. At issue is the timeline for when tax dollars, fees and other money sources are expected to flow into the treasury—and how much agencies need each month to remain operating.
Much of the state’s revenue arrives later during the fiscal year. Until those payments roll into the treasury, the state usually borrows from its own savings accounts. But Louisiana has fewer cash reserves than it once had because former Gov. Bobby Jindal and lawmakers drained many of those accounts to patch together prior budgets, leaving less to help with cash flow. Louisiana took out a similar short-term loan for $370 million in the last budget year that ended June 30, its first such borrowing in nearly 30 years.
