Louisiana Treasurer John Kennedy postponed updates to the state’s credit rating agencies Monday because of questions about whether the state ended its last budget year with a surplus or a deficit. Governor Bobby Jindal’s top budget adviser says the state closed its books with a $179 million surplus. But Kennedy contends the accounting method strayed from the state’s traditional way of calculating the numbers.
“I hope we have a surplus. But I don’t want to have a manufactured surplus. That’s just going to make our fiscal problems that much worse,” Kennedy told Red River Radio.
Kennedy believes the state has a $141 million deficit under historical accounting practices. The fiscal year ended in June. Kennedy cancelled conference calls with bond rating agencies yesterday until questions surrounding the surplus can be resolved.
“I don’t understand exactly what their methodology is. It looks to me like they may be going from a modified accrual basis of accounting used by most state governments to a cash basis of accounting. But frankly, I really can’t tell,” Kennedy said.
The Joint Legislative Committee on the Budget is set to meet Friday to discuss the budget situation. Meanwhile, legislative accountants and fiscal advisers are combing through the numbers.
