Edwards’ falsehood involves his suit over Schroder refusing to allow a funds sweep of unclaimed cash escheated to the state, an amount from 1973 through fiscal year 2019 totaling $882 million (another $237 million in unclaimed securities external entities hold and are unaffected by the suit). This running total moves up and down by tens of millions of dollars each year as claims are paid and escheats received.
But Treasury coffers actually hold a far smaller amount, thanks largely to the practice of the state taking $635 million over that span to spend on current operations. Another $50 million over the years went to administrative costs, and $180 million by separate appropriation authorized by law went to fund Interstate 49 bonding. Only a $17 million buffer actually remains, after Schroder rejected a transfer in FY 2018 of $12 million to bump up cash on hand. This he did when improved dissemination practices caused such a run that the amount returned to owners exceeded by more than $5 million the escheats collected, delaying payments.
Now Schroder wants to stand on principle as well as practicality. His refusal to release $25 million Edwards wants to use in current budgeting pursuant to a funds sweep – an appropriations bill that moves money around from different government funds – he bases on R.S. 9:162 which makes the state a custodian of private property. Unclaimed cash (except that diverted to I-49 funding, which goes into a separate fund by R.S. 9:165) is deposited into the Bond Security and Redemption Fund that he oversees.
He actually has another basis on which to refuse letting go of these dollars – in 2018 the practice of funds sweeps, admittedly through a poorly-reasoned opinion that likely wouldn’t stand on appeal, was declared unconstitutional. Despite that, policy-makers have ignored its implications except in the case of the triumphant entity in that case, the Public Service Commission.
Which makes Edwards a hypocrite and liar. He recently alleged that he doesn’t use “budget gimmicks” that previous governors did, and claimed his past budgets contained no funds sweeps – but that’s exactly what use of unclaimed property bucks is. Clearly, his boast about fiscal responsibility is a lie.
His breaking of a promise comes from his past stated intention to use only 98 percent of available revenues in his budgeting. That morsel came from his 2017 quickly-abandoned asserted tax “reform” that fronted for a huge tax increase. He stated that “once our budget and tax structure is stabilized,” the state should “budget for 98 percent of forecasted revenues to avoid mid-year cuts.”
When temporary sales tax increases were reenacted in 2018 for seven more years, he proclaimed loudly an achievement of budget stability. But we have yet to hear of him following up with his 98 percent pledge. If he really meant it, he could eschew the $25 million (about 0.25 percent of general fund currently forecast revenues) as part of that pledge. Obviously, he never meant it in the first place.
His speaking with a forked tongue stems from his assertion in a related matter, attendant to a proposal made by Schroder to stop the bickering. Schroder said the state could set up a separate fund with the unclaimed cash, then skim off the interest that in a quarter century would greatly exceed the current yearly transfers out. Edwards faulted that, saying the public wouldn’t benefit from increasing the size of a government bank account.
Yet in railing against the concept of funds sweeps – again, keep in mind he has said one thing in this regard and done another – not doing these does exactly what he said doesn’t serve the public interest: accumulating money in various government sequesters. So apparently keeping hands off of discrete funds is good when Edwards does it, but bad for the public when a political opponent does – except, of course, when Edwards doesn’t resist scooping up the money it as in the case of the unclaimed cash.
On this issue it’s hard to avoid whiplash in trying to follow Edwards’ breakneck changes of direction to serve his political needs. Needless to say, the old lawyer joke applies: how do you know when a lawyer is lying? When his lips are moving.