State looking at 'last resort' to pay Saints
State looking at 'last resort' to pay Saints
By MICHELLE MILLHOLLON
Capitol news bureau
Advocate staff photo by Arthur D. Lauck
Gov. Kathleen Blanco is looking for creative ways to pay the money the state owes the New Orleans Saints. Blanco spoke about the problem during a news conference Monday.
In a crunch to come up with cash for the Saints, the state is looking to borrow $9.3 million through a generally frowned upon practice.
The state must pay the NFL franchise $15 million by July 15 or default on a contract.
Scraping together the entire subsidy is becoming a chronic problem. Last year, the state raided an economic development fund to pay the team.
To make this year's payment, the state is asking for a short-term loan through revenue anticipation notes. The state Bond Commission will take up the request Monday.
It's "a last resort when you're down to virtually no alternative," state Treasurer John Kennedy said.
The little-used practice could easily put the state further in debt, he said.
Commissioner of Administration Jerry Luke LeBlanc didn't respond to repeated requests for comment.
Meanwhile, Superdome Commission Chairman Tim Coulon said he has not decided whether to accept the $50,000 salary approved Sunday night by the Senate.
Members of the commission are appointed by the governor to manage the Superdome. They receive $50 per meeting and use of a Superdome suite.
For more than a year, Coulon has been the governor's point person in negotiations with the Saints to rework the team's deal with the state. Coulon also works as a lobbyist for the multistate law firm Adams and Reese LLP in New Orleans.
Coulon said he broached the issue of compensation for the commission with Sen. Francis Heitmeier, D-New Orleans.
Coulon wanted a salary to be set for all members of the commission. Instead, he was singled out, Coulon said.
The issue sparked debate Sunday night on the Senate floor.
Sen. Jay Dardenne, R-Baton Rouge, objected to setting a salary for the commission chairman.
"This is the same group that can't afford to pay the Saints," Dardenne complained. "This is one of the most coveted appointments. You get a box at the Dome. It's tough work, heavy lifting, but it's a coveted position."
Other senators argued that Coulon's appointment has morphed into a daily job.
Gov. Kathleen Blanco agrees with that assessment.
"There's been an unusual level of demand on his time," Blanco said Monday.
Coulon said he had no idea how much time the appointment would eat up when he accepted it.
"It comes in spurts and it comes in weekends," he said of the work. "Clearly, it's always been my work ethic to get it all done no matter how much time it took."
To that end, Coulon said he keeps in touch with the Saints, despite team owner Tom Benson's rejection of the state's efforts to agree upon a more affordable deal.
Blanco said the state and the team are "kind of talking."
Overshadowing the talks is the looming due date of the annual payment to the Saints.
"We've got several layers of consideration and we'll resolve something before the deadline," she said.
One of those considerations is to defer the debt by borrowing the money. Revenue anticipation notes would tide the state over until more money materializes.
Former Gov. Edwin Edwards embraced the practice during his years at the helm of state government. One of his successors, Gov. Buddy Roemer, relied on revenue anticipation notes to keep the state afloat while he grappled with the $1 billion debt racked up by the Edwards administration.
Since then, the measure hasn't been used at the state level, Kennedy said.
Relying on the notes means the state has to bank on an improvement in the Superdome's revenue pots.
"The obvious question is if you use future revenues to pay back the revenue anticipation notes, what if your revenues don't increase," Kennedy said.
"You're in the hole again," he said.
The Senate put the Saints in line Monday to get part of the tax dollars generated from slot machines at the New Orleans Fair Grounds.
Backers of the bill authorizing the allocation don't know how much money would be generated. The bill goes back to the House for approval of the change.
Another bill that provides a separate gambling source of money for the Saints -- tax money from slot machines at the Louis Armstrong International Airport -- died in the Senate Monday evening on a vote of 8-29.
The bill would have required approval from voters in Jefferson Parish, where the airport is located, before the slots could operate.
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