If President-elect Donald Trump makes good on his promise to invest $1 trillion in America’s aging infrastructure and gets the plan passed through Congress, his Louisiana campaign chairman, Eric Skrmetta, says the Bayou State will “certainly” get its fair share of federal dollars.
But a bipartisan group of Louisiana policymakers, business advocates and politicians agreed today that the state needs $700 million more of its own money to spend on infrastructure—partly because it couldn’t currently afford to provide the required match for any increase in federal transportation dollars.
“The problem in Louisiana is that if more (federal) money comes, we don’t even have the state funds to match it,” says Ken Naquin, CEO of Louisiana Associated General Contractors. “We barely have the match now.”
Naquin sits on the state’s 18-member Task Force on Transportation and Infrastructure Investment. The group is tasked with coming up with a comprehensive report on how the Legislature can find more than a half billion dollars and spend it responsibly on a variety of transportation projects.
The group is set to deliver its results to Gov. John Bel Edwards on Jan. 1, just in time for the 2017 legislative session.
But the moves toward solving the state’s transportation issues—heavy traffic congestion, a lack of bridges and torn-up highways, among other things—come at a critical time for other state budget issues.
A host of tax increases passed this year will end in 2018, creating a massive fiscal cliff the state is approaching. Given that the Legislature can only take up taxes in odd-numbered years, the pressure is on in 2017 for lawmakers to reform the state’s tax code.
State Rep. Kenny Havard, R-Jackson, is worried the issue of transportation spending will get lumped into a broader fight over whether the state needs to raise more taxes. The task force will likely suggest an increased gas tax, of which each penny would raise about $30 million for the state. Doubling the 20-cent state tax, for instance, would raise around $600 million. Louisiana motorists are currently taxed about 38 cents per gallon of gas, which includes the federal tax, putting the state at the low end of the spectrum nationally.
Even if the Legislature agrees to double the gas tax, it would still be around $100 million short of the amount needed, according to the task force, and it is unclear how much public support the increase would garner.
But Havard, who chairs the House Transportation, Highways and Public Works committee, is skeptical a gas tax could get the support it needs—two-thirds of the House, or 70 members—to pass. Havard says he will bring a bill that would impose a tax on each gallon of gas at the refinery stage as part of a broader effort to lower other taxes.
Another problem with Louisiana’s transportation system has historically been the way the state spends money designated for roads on other things, Havard says. Edwards has already removed a big chunk of money—state police dollars—from the transportation trust fund, but Havard says some transportation-related revenues can be added to the fund.
The governor’s task force today announced it will include in its report PILOTS—payment in lieu of taxes—as a means to raise additional money. PILOTS would give locals the opportunity to send some of their local tax dollars to state infrastructure projects in their area.
Senate President and task force member John Alario hopes the federal government develops a good federal infrastructure plan that helps Louisiana, but also notes the state needs to raise the money to come to the table.
“The public will have to decide whether, in actuality, they save more by investing in highways,” says Alario, R-Westwego.
The idea that the public ends up paying more in exchange for a lower gas tax—lost gas money spent sitting in traffic, repairs to worn-down vehicles from aging roads—has been pushed by the task force throughout its recent trips all over the state. The group’s chair, Department of Transportation and Development Secretary Shawn Wilson, says the gas tax is not really a tax, but more of a user fee for getting on state highways.
Still, Wilson says he has already seen resistance from the floated gas tax proposal, and is concerned the comprehensive plan will be pulled apart into piecemeal solutions that will not adequately reform the transportation system.
“If you choose to drive, you pay for your space on the road,” Wilson says. “We can’t invest in multi-modal projects without more money.”
—Sam Karlin
