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BATON ROUGE (AP) — Because of a projected $500 million surplus, Louisiana’s savings account for troubled financial times will receive a sizable $125 million bump in its deposits. But the “rainy day” fund still will remain below its peak after years of depletion to fill budget gaps.
While other states have focused on rebuilding their reserves since the last recession, Louisiana spent those years careening from one self-created budget crisis to the next, until Democratic Gov. John Bel Edwards and the majority-Republican Legislature reached a seven-year tax deal in 2018.
Recent surpluses have started refilling Louisiana’s rainy day account, formally called the Budget Stabilization Fund. But lawmakers and the governor also stripped a lucrative replenishment source to pay for roadwork rather than sock into the savings account.
Meanwhile, the $406 million balance in the fund remains below the level of reserves that national credit rating agencies advise — and below the level that half the nation’s states have in their rainy day funds — even as economists have warned a national recession could be on the horizon.
“Now’s a good time to prepare by filling up the rainy day fund,” said Robert Travis Scott, president of the Public Affairs Research Council, a nonpartisan government watchdog group. “We do not have it filled to the rate that’s probably prudent for the next economic cycle, and it’s clearly short of what the rating agencies say.”
While Moody’s Investors Service improved Louisiana’s credit outlook to “positive” last week, the Wall Street credit rating agency dinged the state for its low rainy day fund, calling it a “credit weakness.”
Louisiana created the savings account in its constitution in 1990 and reworked it eight years later, requiring that lawmakers earmark one-quarter of any surpluses into the fund. While certain income tied to oil and gas also flows into the account, the benchmarks to trigger such deposits haven’t been reached in many years.
The fund can be tapped when the state income forecast for an upcoming budget year is less than the current year. Only one-third can be withdrawn in a two-year period, and a two-thirds legislative vote is required.
The Budget Stabilization Fund topped $853 million at its high point in the 2008-09 financial year, according to the treasurer’s office. Former Gov. Bobby Jindal, Edwards and lawmakers siphoned off money five times in the last decade to lessen financial gaps, draining it to $287 million three years ago.
Three years of surpluses are starting to replenish the account.
Edwards, running for a second term on the Oct. 12 ballot, highlights the increased rainy day deposits as a sign Louisiana’s on improved financial footing, pushing back on criticism that he and lawmakers raised taxes too high.
But while the upcoming surplus deposit will boost the savings balance to more than $530 million, its highest level since 2014, that’s not nearly enough for Treasurer John Schroder.
“You’ve got to be well over a billion dollars to be healthy,” the Republican official said. “If we’re going to create some stability in this state, having a healthy savings account is part of that stability.”
Louisiana’s lawmakers had pledged another stream of annual cash would flow into the rainy day fund, a portion of hundreds of millions in Gulf oil spill recovery money that Louisiana is receiving from BP PLC as compensation for economic damage from the massive spill.
But Edwards and lawmakers earlier this year redirected those dollars to instead finance roadwork, bridge upgrades and port improvements.
That will leave surpluses as the primary driver for filling the rainy day fund. If no surpluses appear, lawmakers and the governor have to put at least $25 million in the account annually, part of the settlement of a lawsuit involving prior uses of the fund.
Schroder suggests lawmakers and the governor should spend less than all the state dollars available yearly, to create new surpluses. Scott wants to see Louisiana rewrite its tax structure to lessen the unpredictability of its revenue streams.
“As long as you have a tax base that is sort of inherently uncertain and volatile, as we currently have it structured,” Scott said, “you’re probably going to need more money in a Budget Stabilization Fund than we have now.”
Melinda Deslatte has covered Louisiana politics for The Associated Press since 2000. Follow her at http://twitter.com/melindadeslatte

Henry Wayne Daigle Sr., 80, a resident of Bayou L’Ourse, passed away Friday, September 20, 2019, at Teche Regional Medical Center, surrounded by his loving family.
Henry was born July 3, 1939, in Morgan City, the son of Kaiser Daigle and Ruth Sadlock.
Henry enjoyed reading his bible, crocheting, woodworking, fishing, and flying his remote control airplanes.
He will be sadly missed and lovingly remembered by four sons, Terry Daigle of Morgan City, Kerry Daigle of Morgan City, Kenneth Daigle of Georgia, and Henry Daigle Jr. of Stephensville; two daughters, Christina Daigle Guidry of Bayou L’Ourse and Cynthia Daigle of Morgan City; four brothers, Ronnie Daigle, Terry Daigle, Leroy Daigle, and David Daigle; three sisters, Charmane Latiolais, Cindy Gaudet, and Ann Flook; 12 grandchildren, Brandy Aucoin Daigle, Shawn Kwaak, Kenneth Daigle Jr., Stormy Henry and husband Scott, Terry “T.J.” Daigle and wife Amy, Savannah Galloway and husband Jason, Mandy Saujon and husband Nathanial, Samantha Daigle, Jessica Daigle, Jessica Guidry, Ariel Guidry, and Arissa Guidry; 10 great-grandchildren, Corina-Michelle Sutton, Damien Daigle, Collin and Camrin Bergeron, Zayne Llandyn Kyleigh and Emma Saujon, Guage and Zachary Galloway; godchild Toni Young; and brother-in-law, Danny Austin.
Henry was preceded in death by his parents, Kaiser and Ruth Daigle; wife, Linda Scully Daigle; and 5 siblings.
Funeral services will be held at 2 p.m., Tuesday, September 24, 2019, at Twin City Funeral Home with Pastor Steve Spurlin officiating. Visitation will be held Tuesday, September 24, 2019, at Twin City Funeral Home, from 10 a.m. until the time of services. After services, Henry will be laid to rest in Morgan City Cemetery.

SUMMER SALE
At Sacred Heart Thrift Store, corner of Second Street and South Railroad, Morgan City from 8:30-11 a.m.Wednesday-Thursday, Sept. 25-26. Stuff a tall kitchen bag for $1. Store close for two weeks following the sale for cleaning and restocking.

ALZHEIMER’S
Care Giver Support Group meets the third Wednesday each month from 1-2 p.m. at Maison Jardin, 516 Roderick St., Morgan City. Public welcome. For info call Keith Weisheit, 985-209-8878.

Deputies received a call about a woman lying face down in a field in Amelia and arrested on drug charges, St. Mary Parish Sheriff Blaise Smith said in a news release.
—Chloe J. Ruiz, 28, of Cameron Isle in Houma, was arrested at 8:58 a.m. on Thursday on charges of possession of methamphetamines with the intent to distribute, possession of a aSchedule III controlled dangerous substance with the intent to distribute, possession of a Schedule IV controlled dangerous substance, possession of controlled dangerous substance by fraud, and possession of drug paraphernalia.
A deputy was dispatched to Duhon Boulevard near Cajun Way Lane in Amelia in reference to a subject lying face down in a field. The deputy made contact with the subject, identified as Ruiz. During the investigation, drugs were found. She was jailed and released on her own recognizance.
Smith also advised that the Sheriff’s Office responded to 31 complaints and reported the following arrests:
—David Joseph Elliot Jr., 42, of Franklin Street in Morgan City, was arrested at 1:14 p.m. Thursday on a warrant for failure to appear on the charge of pornography involving juveniles. A deputy received an anonymous tip of the location of Elliot who held an active warrant for his arrest. Elliot was located at his camp on the Atchafalaya River in Patterson and transported to the St. Mary Parish Law Enforcement Center. He was jailed with no bail set.
—Austin Michael Guarisco, 26, of Riverview Drive in Patterson, was arrested at 4:54 p.m. Thursday on a warrant for failure to appear and on the charge of possession of drug paraphernalia. Guarisco was located at the St. James Parish Jail and transported to the St. Mary Parish Law Enforcement Center on an active warrant for his arrest. He was jailed with no bail set.
—Tara S. Guy, 41, of North Severin Street in Erath, was arrested at 4:56 p.m. Thursday on charges of no turn signal, possession of Schedule I drugs (marijuana), and possession of drug paraphernalia. Narcotics detectives were patrolling the area of Live Oak Street in Patterson when they observed a vehicle fail to use a turn signal. The detectives initiated a traffic stop and made contact with the driver, identified as Guy. During the stop, drugs were located inside the vehicle, Smith said. Guy was arrested and released on a summons to appear in court Dec. 2.
Morgan City Police Chief James F. Blair reported that the Morgan City Police Department responded to 37 calls for service and the following arrests were made:
—Keith Clark, 46, of Mount Street in Morgan City, was arrested at 8:27 a.m. Thursday on a charge of distribution of a Scheduled II controlled dangerous substance (crack cocaine). Clark was already incarcerated at another correctional facility. He was transported to the Morgan City Police Department for an active warrant that stemmed from a narcotics investigation in which Clark is suspected to have sold crack cocaine. He was jailed.
—Alfred Johnson, 54, of Clayton Drive in Baton Rouge, was arrested at 9:20 a.m. Thursday on charges of sexual battery and indecent behavior with juveniles. Johnson was arrested by detectives on warrants that stemmed from an investigation where Johnson is accused of inappropriate contact with a juvenile victim. He was jailed.
—Tayler Davis, 21, of Natalie Lane in Morgan City, was arrested at 4:11 p.m. Thursday on a warrant for a charge of remaining where forbidden. Officers located Davis at a La.182 business and knew of an active warrant for his arrest. The officer contacted Davis and placed him under arrest. He was jailed.
Patterson Police Chief Garrett Grogan reported no arrests.
Berwick Police Chief David Leonard Sr. reported no arrests.