Posted: May 16, 2014 4:39 PM
Source: Associated Press
BATON ROUGE - Efforts to put more limits on how state government spends its money had an unintended consequence, boosting the amount of money the state can borrow each year under its debt ceiling.
The issue is tied to the complex way Louisiana calculates its annual cap on state debt.
A proposal pushed into law by House fiscal conservatives requires the state's income forecasting panel to estimate how much money is available in set-aside funds it didn't previously forecast.
Louisiana's debt ceiling is calculated as a percentage off that forecast. Since more money was swept into the estimate, the state now has more room under the ceiling.
The change removes ongoing concerns about breaching the ceiling. But Treasurer John Kennedy said that doesn't mean Louisiana can afford to spend more on construction projects.