The Interstate 49 Connector through Lafayette will likely not be built without major new sources of revenue, either from tolls, taxes or both, a nationwide expert in financing public projects told a group of business leaders Thursday.
“You’ve got to face the reality of being able to deal with the fact that more revenue is required,” said Ron Marino, managing director of the public finance department with banking and finance giant Citigroup. “The money is not there at the federal level. It’s not there at the state level.”
Marino spoke at an event organized by the regional economic development group One Acadiana to explore pathways to fund the I-49 Connector and other major projects, including a regional transportation loop.
The discussion Thursday focused on the proposed Connector, the mostly elevated 5.5-mile stretch of the I-49 project that would roughly follow the route of Evangeline Thruway.
The project is estimated to cost from $700 million to $1 billion, and there is no money to build it, though the state Department of Transportation and Development this month launched the first phase of the design process.
One Acadiana President and CEO Jason El Koubi said now is the time to begin seriously discussing how to pay for the Connector and future projects of regional impact.
“We need to acknowledge the looming funding challenges ahead,” he said.
Supporters of completing I-49 South from Lafayette to New Orleans — the priciest portion of which is the Connector — have been discussing tolls as a possibility for at least six years.
A state study last year found that tolls starting at 18 cents a mile could cover from one-quarter to one-half of the estimated $3 billion needed to complete I-49 South.
But even with tolls, substantial funding from other sources would be needed.
In examples of existing projects in other areas cited by Marino, tolls covered as little as 19 percent of the costs and no more than 42 percent.
The balance came from a blend of federal grants, federal loans, state transportation dollars and local sales, property or gasoline taxes.
“In all of these projects, tolls are the fundamental financial basis, and you build on that,” Marino said.
He said Lafayette residents cannot count on the state or the federal government to come through with transportation money.
“We might be waiting for a very long time, and our economy and our quality of life will diminish,” Marino said.
He also talked of the need to revisit the state’s model for transportation funding, because the current gasoline tax, now the major source for state road money, can’t support Louisiana’s infrastructure needs.
Louisiana motorists pay a 20-cent-per-gallon state gasoline tax: a base of 16 cents plus 4 cents for a list of specific statewide projects voters approved several years ago.
The tax rate has remained unchanged since 1990, while the state’s backlog of highway needs has climbed to $12 billion.
There has been talk in recent years of raising the state gasoline tax, but a bill in the legislative session this year to increase the rate by 10 cents per gallon gained no traction.
Even if the health of the state transportation budget improved, the Connector would still be a massive project by Louisiana standards and would dwarf any locally funded road project.
By comparison, the extension of Camellia Boulevard over the Vermilion River in 2003 was the most expensive local road project in recent history in Lafayette Parish.
The bill came in at about $40 million, 6 percent of the low-end estimate of $700 million for the Connector.