BATON ROUGE, La. (AP) - Gov. Bobby Jindal’s administration is asking for a $40 million loan from the state treasury to continue paying expenses for Louisiana’s public colleges, after the financing used to fund higher education has been slow to arrive.
The loan request was filed this week with Treasurer John Kennedy’s office, seeking “seed funding” to provide cash flow for the campuses and other higher education offices.
At issue is the way Jindal and lawmakers chose to provide much of the state funding for the schools in the $25 billion budget. They are using a patchwork of dollars from property sales, legal settlements, lease payments and other financing arrangements.
Until the dollars arrive, the state is borrowing from other places to fill the gap.
Jindal’s chief budget adviser, Commissioner of Administration Kristy Nichols, said Friday she is confident the dollars will arrive.
“Higher education is paid on a month-to-month basis by the state. Some of the funds from the fourth quarter of this (fiscal year) have yet to be collected as certain revenues are not expected to be paid until the end of the fiscal year. This is simply a timing issue,” Nichols said in a statement.
Nichols said the money will be used to cover the state’s financing for higher education in May “until the rest of the fourth quarter revenue can be collected.”
Jason Redmond, deputy state treasurer, said the money has to be repaid by the close of the books for the 2013-14 fiscal year that ends June 30.
According to Redmond, the state’s general fund account - the money that comes from state tax revenue, mineral revenue and other sources of general operating cash for the state - already was short more than $171 million before the latest request for funding.
Under state law, the treasurer’s office borrows from other set-aside funds to pay for general operating expenses until the state’s general fund revenue comes in. So, the treasurer’s office would be borrowing money from another fund to provide the loan for the colleges.
The Jindal administration has said the use of “seed funding” is common as state agencies wait for various funding sources, like user-generated fees and fines, to come in as projected.
But the amount of piecemeal financing used for the higher education budget this year has raised eyebrows and drawn complaints.
About $850 million in state funding was budgeted for higher education in the current fiscal year, and $340 million - or 40 percent - of that was slated to come from the patchwork funding streams.
The Jindal administration and lawmakers have used similar funding maneuvers for years, but this is the first time the bulk of the money was earmarked for higher education, instead of health care services.
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