State lawmaker wants surplus to pay debt

The state should have a large surplus left over from spending during the regular session that ended in June.

State Sen. Butch Gautreaux (D-Morgan City) wants to use some of the money to pay down debt in the Louisiana State Employees’ Retirement System and the Teachers’ Retirement System of Louisiana, the state’s two largest retirement systems.

State law limits the spending of budget surplus funds to certain items such as paying off debt, road construction and coastal restoration projects. The surplus for the budget year ending June 30 is expected to be around $865 million.

Earlier this year, Gautreaux, who chairs the Senate Committee on Retirement, was vocal about the need for the state to spend the previous $1 billion budget surplus on core projects like retiring debt.

The two retirement systems are a combined $9.7 billion in debt approximately, according to a release from Gautreaux’s office.

Regular annual payments made into the retirement system have not stemmed the growth of the debt over the last 20 years, Gauteaux said in the release.

“For too long the state granted benefits without providing concurrent funding,” he stated.

Most of the debt, loaded down with an 8.25 percent annual interest rate, must be paid off by the year 2029.

According to the release, spending budget surplus funds now to reduce that debt could save the state around $1.3 billion in interest costs.

The Associated Press contributed to this story.