A $200 million financing plan for construction projects at state community and technical college campuses received approval today from the State Bond Commission, despite concerns the borrowing will edge the state closer to its debt ceiling. The move nearer the state’s annual cap on debt will limit the ability for the governor and lawmakers to move ahead with other state-funded construction projects. Debt is capped at 6% of state income each year.
The Bond Commission already had agreed to $185 million in borrowing for the Louisiana Community and Technical College System campuses. Today’s vote, which came without objection, increased the size of the bond issuance to $200 million and reworked the borrowing and repayment schedule. Public agencies sell bonds to investors to generate upfront cash for a project and pay off that borrowing over time. The money will replace, repair and expand campuses at a list of community and technical colleges around Louisiana. Supporters say upgraded facilities are badly needed to improve worker training and skills trade programs. The only school in the Capital Region set to get funding is the Louisiana Technical College’s Westside and Port Allen campuses, which are in line for $3.45 million for infrastructure improvements. The state will pay off the borrowing in installments over 20 years, starting with a $2 million payment in the upcoming 2009-10 budget year, a $17.3 million payment the following year and payments of $16.2 million each year after that until the debt is paid, according to a financial analysis by Bond Commission staff.
