State Treasurer John Kennedy did not addressany of the $12 billion unfunded liabilities during the 2015 treasurer’s campaign and his absence at the 2016 Senate candidate forums has been noted. Monroe “NewsStar” discusses Kennedy’s forum absences as dodging David Duke, but fellow candidate Troy Hebert commented that Kennedy was likely missing forums to avoid answering questions on topics such as the state’s financial crisis.

Kennedy has been Louisiana’s Treasurer since 1999. He ran unsuccessfully as a Democrat for Senate in 2004, then switched and ran as a Republican in 2008.

Shortly after Kennedy was elected to his fifth term as State Treasurer in 2015, he declared he was a running for a third time for the US Senate. Political blogger Lamar White Jr. has challenged Kennedy’s method of converting funds from his state treasurer campaign to his federal senate campaign as violating campaign laws.

Laws require state treasurers to disclose debts

In 2012, the Government Accounting Standards Board, GASB, added Statement No. 68 requiring governments to disclose a “net pension liability” on their balance sheets.

In the first half of 2015, think tanks and institutes reported that Treasurer Kennedy’s actions on GASB No.68 had been hiding the approximate $20 billion state debt for several years.

Immediately upon taking office in 2016, Governor Edwards addressed the seriousness of Kennedy’s failure to report and fully fund the pension liabilities during his 15 years as Treasurer. The state made budget cutbacks to restore adequate funding to pensions which have hurt Louisiana’s college scholarship program, film industry tax credits, ability to fight crime, and infrastructure spending.

Pension management cause for serious concern

Truth in Accounting think tank reported in March 2015, “What is Louisiana Hiding? … $12 Billion in Hidden Debt, … 74% of Louisiana’s retirement debt is not clearly disclosed on its balance sheet.In 2012, the Pew Institute reported “Louisiana’s retirement plans had a liability of $51.4 billion and the state has fallen $28 billion short in setting aside money to pay for it.

Louisiana’s management of its long-term liabilities for pensions and retiree health care was cause for serious concern.”

In February 2015, the Advocate reported that GASB requirements added $1.5 billion in debt to Louisiana’s pension requirement. The following month, nola.com reported, “Yet, if you go looking for the $16.6 billion on the state’s balance sheet, you won’t find it, or at least not all of it.” In April 2015, American Thinker listed Louisiana as number eight of the states with the most underfunded pensions, with $75 billion in unfunded liabilities.

Excess spending in treasurer’s office

For years Kennedy has issued a “Weekly Waste Report” reporting government waste. Recently, his own office has been cited: nola.com reported that a former executive director had spent extra on hotel rooms, rental cars, and out-of-state “planning trips.”

The Advocate and the Associated Press reported that Jay Dardenne, the chief financial advisor to Governor Edwards, advised that Kennedy could save the state $294,000 annually by moving his staff to state-owned offices instead of the $370,000 Kennedy pays a campaign donor’s firm for office space.

Ballotpedia reported that Louisiana paid $127 million in pension management fees in 2012 with a five-year return of only 1.1% and potential credit downgrading for Louisiana bonds.

Financial advisor, former Mayor, and Senate candidate Charles Marsala stated, “Louisiana citizens need to know the full amount of unfunded liabilities per pension fund, see the plan, and progress to becoming fully funded. Will extra taxes and cutbacks be required to meet funding obligations? Retirees must be paid and cities will likely face reduction of police and fire, jeopardizing public safety. I am concerned that the $10 billion LASERS pension fund has only returned 1.2% for the last 12months when 7.75% is needed annually to meet expectations.”

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