Today, Gov. John Bel Edwards released the following statement on the release of the Capital Outlay Bill, HB 2, to fund construction projects across the state of Louisiana. With limited funding available due to the looming fiscal cliff, the Edwards’ Administration is seeking to fund smaller projects that have been in the program for years using surplus state funds, rather than the more costly, traditional approach of bonding the projects for 20 years.
“With the fiscal cliff looming and the fact that the legislature was unable to replace the expiring revenue, we find ourselves continuing to look for innovative, fiscally responsible ways to fund construction projects our state needs with limited dollars,” said Gov. Edwards. “As we continue to build consensus around a plan that will replace the revenue the state requires, it is my hope that we can improve this bill throughout the legislative process and invest more in the needs of our state.
“As with all previous years, we are looking to fund projects around the state that get the best return on our investment. I know we can do better for the people of Louisiana, and I hope we can come to an agreement on a solution to avoid the cliff sooner, rather than later, so we can prioritize the improvement our infrastructure and adequately maintain our current assets.”
The complete text of the bill is available here.
CAPITAL OUTLAY FACTSHEET
- The Capital Outlay bill contains no new projects. However, new funding was added for projects currently in the bill. In some instances, projects that relied on a combination of state and non-state funds were granted Priority 1 (P1) funding so as not to jeopardize the non-state match.
- To date in fiscal year 2018, $916 million in cash lines of credit have been granted.
- A bond sale in the amount of $341 million took place in September 2017 leaving outstanding lines of credit in the amount of $575 million ($916M - $341M).
- Most of the outstanding $575 million will be reauthorized in HB2. Reauthorizations constitute the majority of the general obligation bond allocations in HB2.
- However, the FY17 year-end surplus allowed us an opportunity to not reauthorize some smaller general obligation bond allocations (P1) in HB2. These small amounts of P1, generally less than $150,000, will be replaced with surplus funds in the Supplemental Appropriations Bill instead. The list of those projects will be made available at a later date.
- By paying for these projects using surplus funds for the full amount, the state receives a better return on its investment than the previous approach, which would have bonded out funding for the projects for 20 years.
- After reauthorizations, funding was added to the following projects continue to fund Administration stated priorities of transportation and maintaining state owned buildings
- $20M Statewide Major Repairs ($20M P2)
- Statewide roofing Asset Management Program (2.5M P2)
- $20M Highway Program ($20M P2)
- When the fiscal cliff is resolved, additional funding can be allocated for needs not met in Original HB2