That’s the trap state Reps. Thomas Carmody, Cameron Henry, and John Schroder have fallen into extending from their critique about one aspect of Gov. Bobby Jindal’s proposed budget. It concerns two presumed bonuses the state will collect with their proceeds going to fund higher education.
The state will take advantage of artificially-low interest rates to refinance indebtedness to pay off advancement of the tobacco settlement in 2001. Instead of taking some annuitized payments, the state arranged to take 60 percent of the money up front, or $1.202 billion, three-quarters socked it away in a fund, the Millennium Trust Fund, and promised to make periodic payments to lenders for getting it earlier. Refinancing of the bonds to help pay for that will save $85 million, available within the upcoming fiscal year.