In contrast with the looming state deficit is an $850 million surplus that legislators will have to spend during the session before they go making any cuts. The surplus cannot be spent on any reoccurring expenses.
The money can be spent, constitutionally, only on debt reduction, unfunded accrued liability, capital outlay and coastal restoration/infrastructure. Danahay indicated that some of the surplus money will go into infrastructure projects; $246 million is already allocated for roads, bridges and other infrastructure needs across the state. About $300 million from the surplus will go into coastal preservation.
Some of the money will go into unfunded accrued liability, or, as Danahay put it, "the amount of money that we're actually short in our retirement system in Louisiana."
"In today's dollars, that's about $4 billion. In future dollars, that's about $12 billion. I call this the ticking time bomb in Louisiana, and nobody wants to talk about it. Last year we put about $75 million towards it, but it will take a tremendous amount of money to shore that up," he said.
Thursday, April 23, 2009
State Legislator: Use some of current surplus to pay down unfunded accrued liability
State Representative Mike Danahay wants to use some of the last state surplus expected for some time to pay down the state’s unfunded accrued liability.