If state lawmakers don’t commit to any more projects this year, Louisiana will spend $4.9 billion on capital construction over the next 20 years, State Treasurer John Schroder said Thursday.
Of that total, about $1.2 billion is for non-state projects, he said.
“You can argue that this is taken off the top,” Schroder said. “It’s paid before we pay for education. It’s paid before we pay for the nursing homes.”
As treasurer, Schroder chairs the State Bond Commission, which met Thursday. While he praised lawmakers for no longer stuffing House Bill 2, the capital outlay bill, with far more projects than the state’s borrowing capacity can handle, he said the actual amount of spending still is increasing.
Now that the state is taking in more than it needs to run the operations of government for the first time in several years, Schroder suggests lawmakers should start putting more of it away for emergencies, such as natural disasters.
Matthew Block, executive counsel for Gov. John Bel Edwards, pointed out that the administration’s version of House Bill 2 called for $806 million of Priority 1 and Priority 2 spending, while the legislature’s final version called for more than $1 billion. Block questioned why Schroder wasn’t at legislative committee meetings during session urging lawmakers not to approve those projects, rather than waiting for the July Bond Commission meeting to complain.
“It seems to me your beef is with the entirety of the legislature and the administration as well for adding projects I guess you believe shouldn’t have been added,” Block said.
“I don’t have a beef with anybody,” Schroder responded, adding that his concern is “not directed at this administration, it’s not directed at the legislature, it’s directed at the process.”
State Senate President John Alario said legislators approve a “very small percentage” of requested projects. Repairs to university buildings and bridges often get more expensive when delayed, he said, and funding flood protection projects save money in the long run.
Rep. Neil Abramson, who as chairman of House Ways and Means sponsors House Bill 2, said the process has come a long way since 2015 when about $1.6 billion in cash lines of credit was approved.
“We didn’t have anywhere close to that amount of money,” he said. “At the end of this fiscal year, if we max out [borrowing], it’ll be $837 million. Literally half. It took a lot of pain and a lot of grief to get there.”
Abramson said much of what the legislature added is in Priority 2, which is where the administration and Bond Commission have more flexibility to pick and choose which projects actually get funded.
Commissioner of Administration Jay Dardenne said state policy dictates that local and non-governmental entities have a “seat at the table” when capital outlay is discussed.
“If the process is to be changed, it has to be changed at the legislative level,” he said.
Dardenne said state government does have an emergency fund similar to what Schroder suggested, though it only has $1 million. In order to put real money in it, Dardenne noted, the legislature would have to restrain spending in other areas.
He added that under Gov. Bobby Jindal’s administration, dollars that were supposed to be for emergencies were used for ongoing expenses.
“We took money that FEMA had given us to deal with disasters and swept it to balance the budget,” Dardenne said. “Sooner or later, we’ll have to repay that.”
Posted on Tue, July 23, 2019
by By David Jacobs | The Center Square