Updated: June 27, 2005, 12:20 PM ET
State gets approval to borrow money for Saints payment
Associated Press
National Football League News Wire
BATON ROUGE, La. -- The state will again borrow the cash needed to make its annual payment to the New Orleans Saints, thanks to a loan arrangement approved Monday, though it's unclear how that borrowing will be repaid or how the state will meet its future obligations to the NFL team.
The state has struggled to pay the Saints for the past few years and has yet to repay the cash it borrowed from an economic development fund last year to make its payment. This time, the state will borrow $10.5 million through a financing mechanism it hasn't used for at least a decade.
Members of the State Bond Commission, which approved the plan Monday, said there were few options available since the Legislature adjourned last week without approving a new tax source for the Saints payment or setting aside dollars in the state's budget to make the latest payment, due July 5.
"We have an obligation that we have to live up to. Some of us many not agree that it's the best contract, but it's a contract we have to live up to. The full faith and credit of the state is behind it," said Sen. Diana Bajoie, D-New Orleans.
The state -- through the Louisiana Stadium and Exposition District which oversees the operation of the Superdome -- will borrow the cash through the sale of a "revenue anticipation note," which assumes that money generated by an entity down the line will cover the repayment of the loan. The head of the LSED and members of the Bond Commission aren't sure where the dollars will come from to repay this loan, however.
The annual payments to the Saints are part of a 10-year, $186 million agreement negotiated by Gov. Mike Foster's administration in 2001. A $15 million payment is due to the NFL team on July 5.
The debt from the payments to the Saints is compounding. The LSED owes the state economic development fund from which it borrowed last year and must repay this newest loan by Jan. 1, 2007. And the annual payments due to the Saints are scheduled to grow next year.
State gets approval to borrow money for Saints payment
Associated Press
National Football League News Wire
BATON ROUGE, La. -- The state will again borrow the cash needed to make its annual payment to the New Orleans Saints, thanks to a loan arrangement approved Monday, though it's unclear how that borrowing will be repaid or how the state will meet its future obligations to the NFL team.
The state has struggled to pay the Saints for the past few years and has yet to repay the cash it borrowed from an economic development fund last year to make its payment. This time, the state will borrow $10.5 million through a financing mechanism it hasn't used for at least a decade.
Members of the State Bond Commission, which approved the plan Monday, said there were few options available since the Legislature adjourned last week without approving a new tax source for the Saints payment or setting aside dollars in the state's budget to make the latest payment, due July 5.
"We have an obligation that we have to live up to. Some of us many not agree that it's the best contract, but it's a contract we have to live up to. The full faith and credit of the state is behind it," said Sen. Diana Bajoie, D-New Orleans.
The state -- through the Louisiana Stadium and Exposition District which oversees the operation of the Superdome -- will borrow the cash through the sale of a "revenue anticipation note," which assumes that money generated by an entity down the line will cover the repayment of the loan. The head of the LSED and members of the Bond Commission aren't sure where the dollars will come from to repay this loan, however.
The annual payments to the Saints are part of a 10-year, $186 million agreement negotiated by Gov. Mike Foster's administration in 2001. A $15 million payment is due to the NFL team on July 5.
The debt from the payments to the Saints is compounding. The LSED owes the state economic development fund from which it borrowed last year and must repay this newest loan by Jan. 1, 2007. And the annual payments due to the Saints are scheduled to grow next year.