Judge sides with Louisiana governor in feud with treasurer

Louisiana

Treasurer John Schroder, a Republican in office since 2017, speaks after qualifying for his re-election bid, joined by his wife Ellie, on Wednesday, Aug. 7, 2019, in Baton Rouge, La. (AP Photo/Melinda Deslatte)

BATON ROUGE, La. (AP) — A Louisiana district judge has ordered state Treasurer John Schroder to transfer more than $32 million in unclaimed property money to cover government operating expenses, siding with Gov. John Bel Edwards in a lawsuit over the money.

Judge Richard “Chip” Moore said the Republican treasurer improperly withheld the money from the state general fund after lawmakers appropriated it in the budget for spending on state programs and services.

The Edwards administration hailed the decision Thursday, as the Democratic governor has been feuding with Schroder over the money for months.

“Treasurer Schroder’s unprecedented action to withhold these funds clearly violates the law, and we are grateful for Judge Moore’s decision,” Edwards’ chief lawyer, Matthew Block, said in a statement.

Schroder vowed to appeal, telling lawmakers in a budget hearing: “The court did a decision today. We’ve got a long way to go.”

Louisiana collects unclaimed dollars from old savings accounts, payroll checks, stocks and dividends, insurance proceeds, oil royalty payments and utility deposits on behalf of residents. The treasurer’s office, designated as custodian of the property, tries to locate people owed the cash and return the money.

Though governors and lawmakers have for decades used a portion of the money to pay for government operations, Schroder stopped the fund transfers, arguing that he doesn’t believe Louisiana law permits the use of money owed to individuals for general government expenses. The treasurer, in office since since December 2017, blocked millions last year and this year that lawmakers and Edwards had earmarked for spending in Louisiana’s $30 billion-plus operating budget.

In response, Edwards sued Schroder, arguing that the treasurer exceeded his legal authority and infringed on the Legislature’s authority over state purse strings.

Moore, a Republican, ordered Schroder to immediately transfer $7.3 million of the unclaimed property dollars into the state’s general fund for the last budget year and another $25.2 million for the current budget year that ends June 30.

As the unclaimed property money is returned to its owners, new money continues to flow into the account each year. Governors and lawmakers have said that gives them enough latitude to spend some unclaimed property money without risking an inability to pay what is owed. But Schroder said the account temporarily ran out of cash at one point in 2018 to pay claims.

As the court disagreement continues, the treasurer is pushing legislation that would give him explicit permission to stockpile the unclaimed property money into a fund that would keep lawmakers and the governor from spending it on general government expenses. That bill is steps from final legislative passage. It would require approval from voters in the Nov. 3 election.

In his ruling, Moore wrote that retaining all the money in a fund “produces no benefit to the public.”

Copyright 2019 Associated Press. All rights reserved.

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