‘LaPolitics’: State construction budget undergoing changes

The state’s process for deciding which projects from the annual construction budget to fund, and how to fund them, can be difficult to follow.

Sometimes, that’s by design.

Known technically as the capital outlay bill, or construction budget, the process involves public projects that are seeking bond funding.  

Based on a variety of factors, the Legislature, using the capital outlay program, categorizes these projects and divides them into five numbered classes, with the most important receiving priority one, priority two or priority five labels.

You may wonder: What about P3 and P4? 

Well, these categories used to be where lawmakers could stick projects that were never going to get funding. On the other hand, at least a legislator could still tell folks back home that a project—call it “pork” if you like—was in the bill.

That charade is slowing down, though the process is still convoluted as ever.

Like his predecessors, Gov. Jeff Landry also enjoys a lot of control over what moves forward from the Legislature’s capital outlay bill, and what doesn’t. 

Last week, we got our first view of how Landry plans to wield this authority when he vetoed $1.75 million worth of projects.

Landry removed funding intended for the housing of formerly incarcerated people, the treatment of gambling addicts, and demolition work at Federal City for the Algiers Development District.

All of the projects are located in Democratic-controlled New Orleans, where Republican Landry has vowed to make dramatic changes in regard to crime and quality of life.

In his veto letter, however, Landry offered only a fiscal argument.

“The overall magnitude of the bill as finally passed is far beyond the state’s ability to fund in any reasonable amount of time as the intent of the capital outlay program is to provide for a five-year capital outlay budget,” Landry writes.

In this year’s version of House Bill 2, there’s nothing in priority two, primarily because P1 is using up all of the state’s legal borrowing capacity.

Last year’s bill was about $300 million over capacity, while this year’s is over by about $120 million, says Roger Husser, who is director of facility planning and control with the Division of Administration.

“The needs generally exceed the ability for the state to move every project forward every year,” he says. “That’s been the case probably forever, and it probably will always be the case.”

Even so, last year’s bill was more overstuffed than usual, which can happen at the end of a term. Term-limited legislators and an outgoing governor often want to get their priorities in the queue while they still can. 

Once the Legislature passes a capital outlay bill, the sitting governor submits a list of line-of-credit requests for bond-funded projects to the State Bond Commission. 

That step in the process is already underway, and over the next couple months, legislators, agency officials and local government leaders will make their pitches to get on that list.

As for what is typically described as “pork” or “pet projects,” you’ll have to look at other legislative instruments. Close to $100 million in local spending was inserted into House Bill 1, the official state budget, and the supplemental spending bill.

Late in the regular session, lawmakers also voted to redirect $717 million that otherwise would have gone into the Revenue Stabilization Fund for one-time spending, including:

— $390.1 million for shovel-ready road and bridge projects

— $157.6 million for law enforcement and first responders

— $94.3 million for deferred maintenance on higher education campuses

— $75 million for water and sewer projects.

None of this is easy for the average taxpayer to follow, which is something Treasurer John Fleming would like to address.

Being new on the job, the former U.S. representative is still more familiar with how the sausage gets made in Washington, D.C., rather than in Baton Rouge. But in both cases, the process is not as transparent as it could be, he says.

Fleming says his office is working on ways to make it easier for residents to understand state spending, in part to give them tools to advocate for change.

“That’s a broad theme that you’re going to see coming from the Treasury in the coming months,” he says. 

Jeremy Alford publishes LaPolitics Weekly, a newsletter on Louisiana politics, at LaPolitics.com. Follow him on Twitter, or Facebook. He can be reached at JJA@LaPolitics.com