(The Center Square) – Legislators stripped $290 million out of the state’s construction budget in a committee hearing Monday, directing dollars that could go to roads, coastal protection and building repairs into savings and paying down debt.
“If we don’t start saving money, what are we doing?” said state Rep. Stuart Bishop, the Lafayette Republican who chairs the Ways and Means Committee, noting the current economic uncertainty. “Some of y’all have projects that are not going to get funded.”
Gov. John Bel Edwards' administration says the decision, if approved by the full legislature, would cause the state to lose federal money and squander an opportunity to stimulate the economy amid the COVID-19 pandemic's fallout and the oil-and-gas industry slump.
After making constitutionally required contributions to the “rainy day” fund and the state’s retirement debt, the administration wants to spend about $347 million in surplus dollars left over from the last fiscal year on roads and bridges, coastal protection projects and long-delayed repairs to state-owned buildings. Commissioner of Administration Jay Dardenne said officials prioritized projects ready to move forward immediately.
Bishop’s amendments took out all but $57 million, leaving about $290 million that also could be added to the “rainy day” fund or to pay down debt. The administration would get $60 million of the $117 million it requested for the Coastal Protection and Restoration Authority and $50 million of the $100 million requested for the Department of Transportation and Development, Bishop said.
Dardenne said other administration requests that were removed include $5 million for “desperately needed” repairs to state office buildings, more than $30 million for equipment replacement and deferred maintenance, and $5 million for a flood-protection project in East Baton Rouge Parish. He said the Bond Commission is poised to refinance long-term state debt at record-low interest rates, suggesting paying a year’s worth of debt is not the best use of the surplus.
CPRA Chairman Chip Kline said flood protection ultimately saves the state money. He said Bishop’s amendments threaten the authority’s ability to put up the state’s share of a $760 million federally backed project to protect St. Charles, St. James and St. John parishes and make repairs to levees in Terrebonne and Lafourche parishes damaged in Hurricane Barry, among other projects.
“These are projects that are shovel-ready, they’ll create jobs, and they’ll stimulate the economy,” he said. “These are critically important projects.”
DOTD Secretary Shawn Wilson said Bishop’s proposal removes $20 million the administration planned to use to draw down $80 million in federal funds. He said the department under the proposal would do about $480 million in work during the upcoming year rather than the $730 million anticipated, which he said would be a blow to the state’s construction industry as well as the health of the state’s transportation system.
The House Appropriations Committee sent the amended construction budget to the House floor without objection.
Also on Monday, the committee unanimously advanced House Bill 846, which would expand access to an existing state incentive program to restaurants, hotels and retailers affected by the “stay at home” measures meant to reduce the spread of COVID-19, along with “businesses engaged in cybersecurity, renewable or a recycling process, the agri-bioindustry, or COVID virus screening, protective gear, medical devices, drugs, or equipment for treatment of COVID infected patients.” The bill would remove the economic development department’s discretion to decide which companies can participate.
Businesses could get a rebate of up to 15 percent of eligible new payroll and for either a sales and use tax rebate for capital expenditures for a facility designated in the contract or for a project facility expense rebate. Legislative fiscal staff estimate the changes will cost the state $8.2 million, though supporters said the tax break could lead to more hiring, which would boost tax revenue including contributions to the unemployment trust fund.