La. overcommitted; projects face review
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State government is over-committed by four times on promises to come up with borrowed money for projects.
There’s $1.46 billion in noncash lines of credit — a designation that puts projects in line for priority funding. But only $350 million in borrowing is available to provide the cash to fund them during the budget year that begins July 1.
Gov. Bobby Jindal’s administration is in the process of analyzing the projects to determine which ones it will recommend advance, which should be put on the backburner, and which should not be reauthorized.
Jindal’s priorities will become clear when his administration submits its state construction program budget after the 2008 Legislature opens its 85-day session March 31, state Office of Facilities Planning and Control Director Jerry Jones said.
The Legislature can then adjust those project priorities, he said.
The situation left by Gov. Kathleen Blanco is irking House Speaker Jim Tucker, R-Terrytown, and House Ways and Means Committee chairman Hunter Greene, R-Baton Rouge.
“We cannot commit to four years worth of advance lines of credit. This Legislature will not have any projects,” Tucker said.
Tucker compared it to “running up of the credit card. It’s out of control.”
“The previous Legislature has in effect tied up the next four years of capital outlay,” Greene said. “There’s a lot of members concerned about them coming in and not having the ability to advance projects they want.
“It’s not just a few (concerned) legislators. There’s a number, especially on the House side,” where about half of the state representatives are newcomers, Greene said.
Greene’s committee oversees state construction spending financed with state borrowing.
Tucker and Greene said they have asked for the list of projects.
Tucker said he wants to know which are under way and are relying on funding from the $1.46 billion commitment to continue.
Jones said it is not unusual for commitments to be made for borrowing of double the state’s annual capacity. “We’ve managed it in the past,” he said.
“This year we have to actively slow down or kill projects,” said Jones, the state construction program manager.
Jones said the situation developed because of what he calls “the perfect storm”: an outgoing administration with Gov. Kathleen Blanco not seeking re-election and term-limited legislators who wanted to get a lot accomplished as they exited.
The state Bond Commission signed off on all the noncash lines of credit. The last projects were added to the list at a Dec. 20 meeting of commission members. The commission is chaired by state Treasurer John Kennedy and includes legislators and other statewide elected officials or their representatives.
“We made them aware of the situation. There were detailed explanations at November and December Bond Commission meetings,” Commission Executive Director Whit Kling said. The committee members got a copy of the running tally of projects too, he said.
“It’s a bad situation. It really is,” Kling said.
Jones said his office is reviewing each project so it can recommend to Jindal which should get the go-ahead and be moved into the top priority funding category.
A $90 million commitment for a New Orleans convention center expansion has been canceled, Jones said. There’s $250 million for LSU’s proposed new hospital in New Orleans on the project list for priority funding, Jones said. But the state will have to come up with only about $30 million of it next year, providing some relief, he said.
Some projects that have been given design money may not be allowed to proceed to construction, Jones said. The projects may have to sit on the shelf “until we can catch up,” he said.
“Any project with a construction contract is safe. We are not going to default on contracts,” Jones said.
“Everything’s on hold right now, being reviewed. What got started before the hold is the question,” Jones said.
There’s $1.46 billion in noncash lines of credit — a designation that puts projects in line for priority funding. But only $350 million in borrowing is available to provide the cash to fund them during the budget year that begins July 1.
Gov. Bobby Jindal’s administration is in the process of analyzing the projects to determine which ones it will recommend advance, which should be put on the backburner, and which should not be reauthorized.
Jindal’s priorities will become clear when his administration submits its state construction program budget after the 2008 Legislature opens its 85-day session March 31, state Office of Facilities Planning and Control Director Jerry Jones said.
The Legislature can then adjust those project priorities, he said.
The situation left by Gov. Kathleen Blanco is irking House Speaker Jim Tucker, R-Terrytown, and House Ways and Means Committee chairman Hunter Greene, R-Baton Rouge.
“We cannot commit to four years worth of advance lines of credit. This Legislature will not have any projects,” Tucker said.
Tucker compared it to “running up of the credit card. It’s out of control.”
“The previous Legislature has in effect tied up the next four years of capital outlay,” Greene said. “There’s a lot of members concerned about them coming in and not having the ability to advance projects they want.
“It’s not just a few (concerned) legislators. There’s a number, especially on the House side,” where about half of the state representatives are newcomers, Greene said.
Greene’s committee oversees state construction spending financed with state borrowing.
Tucker and Greene said they have asked for the list of projects.
Tucker said he wants to know which are under way and are relying on funding from the $1.46 billion commitment to continue.
Jones said it is not unusual for commitments to be made for borrowing of double the state’s annual capacity. “We’ve managed it in the past,” he said.
“This year we have to actively slow down or kill projects,” said Jones, the state construction program manager.
Jones said the situation developed because of what he calls “the perfect storm”: an outgoing administration with Gov. Kathleen Blanco not seeking re-election and term-limited legislators who wanted to get a lot accomplished as they exited.
The state Bond Commission signed off on all the noncash lines of credit. The last projects were added to the list at a Dec. 20 meeting of commission members. The commission is chaired by state Treasurer John Kennedy and includes legislators and other statewide elected officials or their representatives.
“We made them aware of the situation. There were detailed explanations at November and December Bond Commission meetings,” Commission Executive Director Whit Kling said. The committee members got a copy of the running tally of projects too, he said.
“It’s a bad situation. It really is,” Kling said.
Jones said his office is reviewing each project so it can recommend to Jindal which should get the go-ahead and be moved into the top priority funding category.
A $90 million commitment for a New Orleans convention center expansion has been canceled, Jones said. There’s $250 million for LSU’s proposed new hospital in New Orleans on the project list for priority funding, Jones said. But the state will have to come up with only about $30 million of it next year, providing some relief, he said.
Some projects that have been given design money may not be allowed to proceed to construction, Jones said. The projects may have to sit on the shelf “until we can catch up,” he said.
“Any project with a construction contract is safe. We are not going to default on contracts,” Jones said.
“Everything’s on hold right now, being reviewed. What got started before the hold is the question,” Jones said.
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