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|Treasurer Ron Henson Announces $175 Million in Bond Commission Approvals|
BATON ROUGE, LA - The State Bond Commission approved $175 million for projects statewide and $5.4 million in savings at its June meeting, according to State Treasurer Ron Henson.
"The commission approved a variety of projects for local governments statewide and put the infrastructure in place should it be necessary to take out another short-term budgetary loan next year," said Treasurer Henson. "We are closely monitoring the state's cash flow and will bring any plans back before the commission before making any moves in the market."
Among the individual projects approved were:
Iberia Parish: $22.5 million in General Obligation School Refunding Bonds for the Iberia Parish School Board, Parishwide School District, resulting in $513,000 in gross savings.
Lafayette Parish: $75 million in Sales Tax Revenue Bonds for the Lafayette Parish School Board for constructing and acquiring capital improvements including playgrounds, school buildings and related facilities.
LaSalle Parish: $22,000 in Limited Tax Certificates of Indebtedness for the Recreation District No. 22 to equip recreational facilities.
Louisiana Community Development Authority: $2 million in Revenue Bonds for the Livingston Recreation District No. 2 for acquiring, designing, constructing and developing public parks, playgrounds and recreational properties and facilities.
Rapides Parish: $120,000 in Limited Tax Bonds for the Rapides Parish Police Jury, Fire Protection District No. 6 for acquiring, constructing, improving and maintaining fire protection facilities, vehicles and equipment.
Southern University and A&M College: $42 million in Taxable Refunding Bonds for the Board of Supervisors of Southern University and A&M College, resulting in $4.5 million in gross savings to acquire residence hall facilities and Intramural Faculties.
St. Bernard Parish: $4.2 million in Taxable Limited Tax Certificates of Indebtedness for the St. Bernard Parish Council for maintaining and operating fire protection facilities.
St. Tammany Parish: $14.5 million in General Obligation School Refunding Bonds for the St. Tammany Parish School Board, Parishwide School District No. 12, resulting in $351,000 in gross savings.
West Baton Rouge Parish: $15 million in Revenue Bonds for the West Baton Rouge Parish, Greater Baton Rouge Port Commission for the construction of a Chambering Yard.
|Louisiana Awards Three-Year Central Banking Agreement to JPMorgan Chase|
BATON ROUGE, LA - State Treasurer Ron Henson announced today that the Louisiana Department of the Treasury has awarded a three-year state central banking services agreement to JPMorgan Chase, with the option to extend for two one-year periods.
"Chase unquestionably had the best proposal in terms of expertise and cost savings," said Treasurer Henson. "The agreement will incorporate a variety of efficiencies that will save the state $1.8 million over a five-year period. We are pleased to partner with Chase to provide the best possible services to public agencies and Louisiana taxpayers."
The State Treasury administers the state's centralized cash management system to receive, disburse, invest and safely keep all monies required by law to be held by the Treasury. This cash management system uses a central depository bank account to receive check deposits, Automated Clearing House (ACH) credits, wire transfer credits, other deposits, and transfers from other bank accounts. Last fiscal year, the Treasury processed 13 million deposit items through the state's central depository bank account.
The Treasury also relies on the central depository bank to provide cash management reporting software in order to earn the best possible return on investments while providing daily liquidity the state requires to meet its obligations. The bank provides a daily report of investment activity that is critical in reconciling the Treasury's investment portfolio.
"JPMorgan Chase considers it an honor to serve the State of Louisiana and its residents through this important and comprehensive banking contract," said John L. Daniel, Executive Director of Government Banking in Baton Rouge. "Louisiana is very important to Chase. We have more than two million retail-banking customers in our state, and we've been the Number One Small Business Administration lender in Louisiana for five straight years."
The Treasury issued a request for proposals (RFP) for the state central banking services agreement on March 10 and made the award May 1. The agreement with Chase will start November 1 and will last until the Year 2022.
|Treasurer Henson Issues Fraud Alert About Unclaimed Property Scam|
BATON ROUGE, LA - State Treasurer Ron Henson is alerting Louisiana residents to a nationwide unclaimed property scam that is targeting citizens in an attempt to steal money and personal information.
The fraudulent correspondence has been arriving by both mail and email and appears official, because it is on letterhead from the National Association of Unclaimed Property Administrators (NAUPA).
"NAUPA is a legitimate organization, but it does not handle unclaimed property returns and would not contact you directly with information about your unclaimed property," said Treasurer Henson. "All unclaimed property correspondence, outreach and returns are handled at the state level."
Unclaimed property scams undermine the efforts of Louisiana and other states to return missing money, and according to NAUPA's director David Milby, have been running rampant nationwide. "Emails from the public about this issue have increased tenfold in the past year," Milby said.
The Louisiana State Treasury is responsible for locating and returning more than $750 million in unclaimed property. The money is turned over to the state from a variety of sources including payroll checks, old bank accounts, royalties, utility deposits, interest payments, stock certificates and life insurance proceeds.
"We do not ask for your personal information upfront, and there's never a fee to claim your unclaimed property," said Treasurer Henson. "If you ever have any doubts about whether something is legitimate or a scam, please give us a call or visit our website."
Louisiana citizens can search for unclaimed property online at www.latreasury.com or by calling a toll-free hotline at 1-888-925-4127 (weekdays 8:00 a.m. to 4:30 p.m.).
|START Looking at Louisiana’s 529 Plan to Boost College Savings|
When you think of funding for college, the first program that usually comes to mind is most likely TOPS, and understandably so. TOPS has been instrumental in giving Louisiana students access to higher education opportunities. But there’s another program in the state that may not get as much attention as TOPS but is equally successful in helping students and families plan ahead for college expenses.
It’s called the Student Tuition Assistance and Revenue Trust Program (START), and it’s a 529 college savings plan designed to help families contend with the growing costs of educating their children after high school. States operate 529 plans under IRS rules to incentivize saving money for college expenses.
Parents, grandparents and individuals can open a START account with a $10 deposit. College students who want to benefit from the program can even open accounts for themselves in certain circumstances.
The tax advantages of opening a START account are numerous. When you make deposits into the program, the amount is deductible from the income you report on your state tax return up to $2,400 per account each year. If you are married and file a joint tax return, the amount you can deduct from your income increases to $4,800 per account.
Investment earnings on these deposits are tax-deferred while they remain in a START account. When withdrawals are made to pay for qualified expenses such as tuition, fees, room and board, and books, they are exempt from state and federal taxes as well. Like an interest bearing checking account, anyone can make a deposit into an account, but the person who opened the account is the one who earns the interest.
One of the greatest benefits of START is what we call “earning enhancements.” This is where the state matches a portion of deposits into a START account by 2 percent to 14 percent based on an account owner’s income and the account category. The highest match of 14 percent is available to account owners with an income of $29,999 or less.
START has gone from 2,966 accounts and $3.9 million in total deposits in the 2000 Calendar Year to 56,204 accounts and more than $718 million in total assets by the close of the 2016 Calendar Year. This past Calendar Year, fixed income investments in the program earned a rate of return of 1.6 percent, and equity investments in START earned 4.58 percent to 18.3 percent depending on the investment option chosen.
START has performed so well over the years that SavingForCollege.com ranks it first of all 529 plans in the nation for 10-year performance. The program was also ranked in the Top 10 for 1-year, 3-year and 5-year performance.
I’ve only scratched the surface of the many benefits of the START Savings program. I encourage you to learn more about the program and boost your college savings goals by visiting www.startsaving.la.gov.
|Legislative Session Brings Opportunity for Meaningful Budget Reform|
This year marked the first time I attended the opening of a legislative session as Louisiana’s State Treasurer. As I looked around the House Chamber, I thought two things. First, I do not envy the tough task lawmakers have ahead of them. Secondly, it is not yet clear what direction lawmakers will take to change the state’s tax code or reform the budget process.
Although it’s a daunting undertaking, getting control of the state’s budget has never been more important. State government has been addicted to one-time money and budget gimmicks for years and has had a problem living within its means.
Louisiana’s fascination with quick money fixes is similar to an individual who depends on payday loans or credit card cash advances for recurring expenses. It’s a never-ending cycle of scrounging up money to make payments, higher interest costs, and instability. You may convince yourself that you’ve met your needs in the short-term, but a few months or years in, and you’re headed for serious, long-term financial problems.
Wall Street has taken notice of the state’s precarious budget situation. All three Rating Agencies downgraded our bond rating in less than two years. Standard & Poor’s was the latest agency to do so, downgrading us one notch in March from AA to AA-. Louisiana’s budget struggles and supporting revenue problems were factors in the downgrades.
Louisiana simply cannot continue down this road and ask hardworking families to pay more taxes without first making a good faith effort to live within the constraints of a real, workable budget. We should have learned by now that throwing money at the state’s problems won’t make them go away. It may mask the trouble for a little while, but things always seem to catch up to us in the end.
If state government needs advice on crafting a workable budget, I recommend that they ask a Louisiana family for advice. Most families know how to set aside money for an unexpected roof leak or ER visit. They know the importance of paying their bills on time each month. They also know better than to mortgage their house to pay for the latest video game system for their kids. They’re making common sense decisions on how to spend their income.
There are things the average Louisiana citizen can do to ensure that state government does the same thing. It’s never been easier to stay informed during the legislative process. The Louisiana Legislature operates a terrific website where you can research bills, monitor the budget, and watch committee hearings online at www.legis.la.gov.
Taxpayers can also monitor how much money state government collects by checking the Louisiana Department of Revenue’s net receipts report each month. The Treasury posts this report monthly on our homepage at www.latreasury.com.
There is no doubt that we have a lot of work ahead of us. We know Louisiana has a problem. Wall Street knows Louisiana has a problem. But we also have an opportunity to put pencil to paper and come up with a responsible budget that everyone understands and clearly spells out where tax dollars are going. Like Louisiana families, state government must seek to stay within its fiscal means. Louisiana taxpayers deserve no less.
|We Continue To Have A Spending Problem|
If your car breaks down every Monday, eventually you're going to do one of two things. You're going to get a new mechanic or a new car.
Louisiana's state budget is a lot like a car that breaks down on a regular basis. For some time now, every December or January, a huge shortfall emerges that has to be fixed. If you have a kid on TOPS, then you're already suffering the consequences of the state's inability to manage its money. You just wrote a fat check for your kid's tuition because the state came up short. Merry Christmas to you.
So it's no huge surprise the state has yet another deficit - this time $600 million. It's obvious that we need to make changes, starting with eliminating the hypocrisy from the state budgeting process.
The real question is how in the world does the state not have enough money? Taxes are sky high after the largest tax increase in Louisiana's history. The state's not really paying for TOPS scholarships; parents are. And, in November, state revenue was up 27% over last year.
A couple of things are going on.
First, the state isn't hitting the mark on how much money we can expect to receive each year. Since the state budget is built on those projections, it's costly when we get it wrong.
Basically, we're being too optimistic about how much money the state is going to bring in. We're being too optimistic year after year after year. You'd think we'd get the idea eventually that we're not going to find an oil field underneath the State Capitol every other week - or wherever it is we think we're going to get all this money.
Second, the state spends money like crazy. New cars are purchased. Pay raises are given - not to the worker bees, mind you, but to the top brass. More people are added to Medicaid.
The truth is that the state is simply not living within its means. It is spending more than it takes in and letting our taxpayers handle the consequences.
As state treasurer, I like to look at numbers. Numbers don't lie. So I pulled the budget for the state's Division of Administration. The Division of Administration manages the daily operations of state government, operates as the state's accountant and works directly for the Governor.
The Division's budget was $147 million in 2005. It now stands at $395 million. That's a $248 million, or 169% increase, over 12 years. That's a 14% increase per year on average. Has your income gone up 14% a year each year for the last 12 years? (In case you are wondering, the Department of the Treasury's budget increased only 2.6% annually over the same period of time).
No one's really reducing their spending at the State Capitol except for a dip or two from time to time. Meanwhile, the Pew Research Center tells us that real wages (income with inflation factored in) have largely been flat for 20 years.
Instead, the state's relying on foolish tricks and gimmicks to limp along. The state cuts higher education to the bone but allows health care costs to balloon. The Legislature gives lip service to reducing consulting contracts but refuses to pass a bill that would allow the Legislature to reject them. More often than not, the top brass get pay raises while forcing our rank-and-file state workers to get by with the same paycheck every year.
The Division of Administration, which handles the budget for the Governor, can't even cut its own budget.
We can do better. We must do better. Our taxpayers deserve it. We can't keep driving a car that breaks down every Monday.