‘LaPolitics’: Lawmakers may have more capital outlay opportunities

Gov. Jeff Landry’s budget left more meat on the capital outlay bone this year, giving legislators more room to include their own brick-and-mortar priorities.

Lawmakers, however, are being asked not to get greedy and to think carefully about their requests.

“My goal in all of this has always been to try to right the ship a little bit on some of these HB2 projects and really try to stick to those core government functions,” House Ways and Means Chair Julie Emerson says, referring to foundational infrastructure like roads, bridges, water and sewer systems.

Last year, the administration left only about $6 million in bonding capacity for the Legislature, Senate Revenue and Fiscal Affairs Chair Franklin Foil says. Legislators ended up pushing the total about 10 percent above capacity, so many of those projects didn’t get funded as the governor’s office chose to go with their own priorities, he says.

This year, there’s about $25.3 million in cash line of credit capacity remaining in HB2, plus another $13.2 million in surplus dollars, according to the Division of Administration. While it’s typically fine to go a bit over capacity in the capital outlay bill, as there are always delays that keep certain projects from moving forward immediately, Emerson and Foil want to stay closer to that threshold this year.

It’s also worth noting that last year, lawmakers tapped the Revenue Stabilization Fund to pay for some projects, and a similar move is under discussion now. But if they do it again, infrastructure might have to compete with another potential annual stipend for educators that could cost nearly $200 million.

As a reminder, capital outlay projects are designated Priority 1, Priority 2 or Priority 5. P1 projects will have money available next fiscal year, P2 is next in line, while P5 projects have official commitments but not actual funding.

The nomenclature dates back to when the process was based on a five-year timeline, Emerson says. For a while (this predates Emerson’s time in the Legislature), P3 and P4 gave lawmakers a place to park a project that wasn’t really going anywhere, but they could honestly tell people the project technically was in the bill.

P3 and P4 are no longer used at all, and last year, the bill was so far over capacity that there was nothing in P2 either. This year, Emerson and Foil expect to utilize the P2 slot again.

As Emerson explains, it’s unfair to let members and local officials think they have those P1 dollars secured, only to have those projects drop down to P5 or go away entirely because there isn’t enough capacity.

“You shouldn’t have a bunch of P2, but you can have some in there where if you do go through your P1 and still have some capacity left, there are a few items there that you can move to,” she says. “It gives the Legislature and individual legislators a little bit more control.”

Foil tells members to think carefully about their priorities when they make funding requests.

“You can’t just tell me ‘everything in my district’s important,’” he says. “You have to really give me your No. 1 and No. 2 priorities, so I can look at that project and see if we can make that work.”

Capital outlay for non-state projects legally is capped at 25% of the total. For the locals, the competition for funding might be even more fierce than usual, assuming folks are able to raise the necessary matching funds.

Not only are voters reluctant to approve new taxes, tax renewals that once were routine are now a dodgy proposition.

“I’m finding some of these local entities are in pretty bad shape financially,” Foil says. “So they’re looking to the state to do all of their local infrastructure projects, because they’re not able to raise the money at the local level.”

Foil is advising members, especially with local projects, that if the cost is under $1 million and it can be completed quickly, to try to find one-time cash opportunities in other bills to get the work done.

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