Holden announces details of CATS bailout

Mayor Kip Holden and officials from the Capital Area Transit System announced a plan today to close the $1.29 million gap in the public transportation program’s budget. CATS will receive $500,000 grants from the state Office of Community Development and the East Baton Rouge Mortgage Finance Authority. The mortgage finance grant, which was first announced last week, will turn into a loan, with interest, should CATS find a dedicated funding source over the next five years. The $1 million will be used as a local match to get federal grants to wipe out the budget shortfall. If CATS had not been able to come up with the money, the system was in jeopardy of going broke by October. The budget shortfall, created partly by rising fuel costs, had been projected at $1.5 million, but a recent drop in prices led the estimate to be revised downward. Holden says that, while the budget shortfall has been taken care of for this year, a permanent funding solution is needed. A proposal to establish a CATS taxing district that would use new sales and property taxes to generate an estimated $18 million a year is set to go before voters in fall 2012.