Bogalusa joins six others for record setting state control of local finances

February 20, 2019 - 7:46 am

( -- The Washington Parish town of Bogalusa, and it's financial woes, have helped set a new high water mark for the state taking over local finances.

Louisiana now has a record seven entities under the control of fiscal administrators, agents of the state who are appointed when a municipality’s budget woes cause it to default on mandatory payments. 

Legislative Auditor Daryl Purpera says the administrators have broad authority to adjust budgets by laying off city or district employees, and raising rates to make up for fiscal crisis.

“They basically have the duties of the mayor and the council, and the mayor and the council serve as advisers to the fiscal administrator, but the fiscal administrator is going to be the one making decisions.”

The entities under state control are Jeanerette, St. Joseph, Clayton, Clarence, and Madison Parish Hospital district, along with newly added Sterlington and Bogalusa.

It’s a touchy subject, because the administrator overrides the authority of local, democratically elected officials. Purpera says the goal is to quickly get a town’s finances back in order so control can be handed back to elected officials in short order, and most cases are not long term arrangements.

“It can maybe reduced to a year’s time, and that might really depend on the cooperation that is given by the individuals currently there, and by the complexity of the situation.”

Purpera says the longest running case of fiscal administration in the state is Madison Parish Hospital, which has been under administration for three years.

An entity, such as a city, can challenge the appointment of an administrator in court if it opposes the decision, and often those areas are given a chance to right the ship themselves before an administrator is appointed. Purpera says when the decision is made though, it’s rare to see it formally opposed.

“Most of the time the entity knows what the situation is, and they chose not to oppose the court on the appointment of a fiscal administrator.”

The Auditor says much of the blame for the small town budget woes can be traced to the gradual depopulation of rural Louisiana. Along with the seven currently under administration, Purpera up to eight more municipalities are also on the brink of getting administrators.

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