Little-noticed fund at heart of new Kennedy, Edwards dispute

February 5, 2018

BATON ROUGE, La. (AP) — The latest quarrel between Louisiana’s Democratic governor and the Republican U.S. senator who may run against him centers on a little-noticed pot of unclaimed money the state collects on behalf of residents who are owed the cash.

U.S. Sen. John Kennedy wants to use $150 million from the unclaimed property fund to help finance a flood-control project in the Baton Rouge region that has been on the drawing board for three decades.

Gov. John Bel Edwards calls the idea of working on the Comite River Diversion Canal with unclaimed property money unrealistic, in another clash ahead of a 2019 governor’s race that could feature Kennedy challenging Edwards for the job. The two men have repeatedly disagreed over state spending and taxes.

Dollars in the unclaimed property fund come from old savings and checking accounts, payroll checks, stocks and dividends, insurance proceeds, oil royalty payments and utility deposits that aren’t immediately claimed by their rightful owners.

The treasurer’s office tries to locate people and return the money, but the state takes in more money in unclaimed property each year than owners claim.

Kennedy, who worked as treasurer for 17 years, said Louisiana’s sitting on enough unclaimed property that the dollars can be used to pay for the diversion canal work. Edwards dismissed the idea when it surfaced.

“This is other people’s money, even Sen. Kennedy has repeatedly acknowledged that,” the governor said in a statement.

Kennedy said the governor doesn’t seem to know how Louisiana uses the unclaimed property today, with a sort of rolling balance that leaves some money available for people claiming their account balances while spending the rest.

“If they’re saying, ‘We don’t want to use that money,’ we’re doing it right now. It’s in the budget,” he said. “It’s spread all through state government.”

Louisiana’s official income forecast includes about $50 million from the unclaimed property fund annually, with $15 million shaved off to pay Interstate 49 projects and the remaining dollars poured into the general fund that pays for a variety of programs.

Edwards’ budget proposal for the financial year that begins July 1 spends a similar amount.

Kennedy’s targeting a different portion of unclaimed property money tied up in noncash securities, such as stocks and mutual funds, that would have to be sold to generate the cash. The logistics remain a bit murky.

As a first step, State Treasurer John Schroder would have to agree. In a statement Monday, the Republican said he welcomes infrastructure proposals “that do not force the taxpayers to fork over any more money” and is researching if Kennedy’s idea is viable.

Lawmakers and Edwards also would have to budget the money.

Edwards said the better approach is for the U.S. Senate to pass a disaster-recovery bill containing money for the flood-control project, a version of which passed the U.S. House.

“We don’t think there’s a need to look for alternate funding,” Edwards spokesman Richard Carbo said Monday. “This was a project promised to be funded by the federal government. The senator shouldn’t be trying to push off the federal bills onto the state.”

The 12-mile (20-kilometer) diversion channel would siphon high water from the Comite River and send it to the Mississippi River, to reduce flooding in areas near the Comite River. Supporters say it could protect thousands of homes from future floods.


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