APPEL: It Appears John Bel Edwards Has No Plan To Service Louisiana’s Katrina Debt

The debt is coming due,” said Chip Kline, who chairs the Coastal Restoration and Protection Authority and is Gov. John Bel Edward’s top official for coastal issues.”

When I wrote last week about comments made at the Revenue Estimating Conference’s most recent meeting I pointed out the fast and easy use of facts by the Administration. If I had only known what would be revealed at the next day’s Joint Legislative Committee on the Budget (JLCB) meeting I would also have pointed out the potential impact of a debt time bomb not included anywhere in the Administration’s budgeting.

During the JLCB meeting it was brought up by the Administration that there is a large debt due to the Federal government for levee reconstruction after Hurricane Katrina. The principle amount of this debt is about $1.1 billion and we have the option to pay in installments over the next 30 years. Of course with interest such a payment scheme will end up costing the state about $3 billion.

The first payment is due in 2020 and, though the Administration has known about this issue (it has been reported on many times), there has been no effort on their part to engage with the legislature in an effort to set aside funding to pay it. According to the Administration the state has tried to have the debt (or at least the interest) forgiven by the federal Government to no avail.

So in simple terms if nothing changes and we amortize the debt over time we will need $110 million a year just for the annual payments. Even if we succeed in persuading the Feds to forgive the interest we still need $55 million a year.

But where in the Administration’s budget is a reserve account for this debt? Nowhere!

You see the Administration is hooked on spending, especially recurring spending. An inconvenient fact such as a substantial debt must not be allowed to get in the way of the governor’s spending addiction. So the Administration hasn’t created a reserve account as it tries to run out the clock on the governor’s first term. Once re-election is over the governor doesn’t care about how we fund our debts, he will just ask for more taxes or cut more state priorities as he blames the Federal government for not playing nice.


If a citizen knows that in time his or her roof must be replaced, they don’t just hope for a miracle to save them from having to pay for it. They set aside funds so that when the time comes they are not forced to go out and borrow and pay high interest rates. We should also have done that, but that would divert resources from free-spending politicians and goodness knows we would never want to do that!

I cannot just blame this Administration for kicking the can on this expense. It has been known for some time but quietly buried by the last Administration as well. However I can blame this Administration for perpetuating this travesty by increasing taxes and spending on all sorts of vote getting stuff while ignoring this debt and not providing, as a part of the new spending, a set-aside to cover it.

When, oh when will we have well run government?  Government that starts with acknowledging our debts, planning our spending by prioritization, and limiting taxpayer exposure to ever higher taxes.

Taxes in and of themselves are not bad if they are applied to a strategic plan to improve the lives of our people. Any administration that fails to acknowledge and prepare for substantial debts in order just to increase spending to buy votes is unethical at best and downright dishonest at worst.



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