Without a major injection of state money, Louisiana could see its first loss of federal dollars for roads and bridges, according to Shawn Wilson, secretary of the state Department of Transportation and Development.
Wilson, who is leading the charge for a hike in the gasoline tax and other steps to raise money for transportation projects, said recently that on its current course the state will soon be unable to provide the matching funds needed to generate the maximum federal aid.
That could happen as early as next year and could cost the state up to $150 million in the first year and $300 million in the second, he said. The state typically gets between $650 million and $700 million per year in federal transportation aid.
"The exponential impact is significant," Wilson said.
House Transportation Committee Chairman Kenny Havard, R-St. Francisville, differs with Wilson on some transportation issues but agrees that the potential for a loss of federal aid is real.
"I don't think it is a scare tactic," Havard said. "I think it truly is a reality."
The possibility of disappearing federal dollars is sure to be one of the arguments backers will use in trying to win legislative approval for what will probably be a controversial tax increase, especially amid widespread budget problems.
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The issue will play out during the 2017 regular legislative session, which begins April 10.
Gov. John Bel Edwards, who named Wilson to the DOTD post 13 months ago, said recently that he is nearing a decision on his transportation recommendations to the Legislature.
Wilson co-chaired a task force named by the governor that said in December that the state needs to spend an additional $700 million per year to address road, bridge and other transportation needs.
The final report said the state gasoline tax is the "most reliable, proven and meaningful source of funding."
However, Edwards' recommendations for new revenue are expected to be well under $700 million, especially because tax hikes require the support of two-thirds of the House and the Senate — 70 and 26 votes, respectively.
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A gasoline tax hike of 23 cents per gallon would be needed to raise $700 million, if that was the sole source of funding.
Each penny of the state gasoline tax raises about $30 million per year. Motorists pay 38.4 cents per gallon now, including 20 cents in state taxes.
Any increase also could pave the way for borrowing dollars to speed construction on some long-sought projects, including road and bridge improvements in the Baton Rouge area.
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Some key lawmakers, including Havard, say they doubt taxpayers have the appetite for a major gas tax increase. Others say that a large increase, even for an issue motorists complain about daily, is unlikely amid recurring state budget problems.
However, those financial troubles, including midyear spending reductions, also could move up the time when the state cannot meet federal matching requirements.
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Wilson told the Press Club of Baton Rouge on Feb. 20 that he has heard talk of an increase of 5 cents, which he said would not finance the improvements that lawmakers say they want.
That boost would raise about $150 million per year.
Havard made the same point and said his concern is that lawmakers will take action "short of what it is going to take to fix our problem."
"Then people are really going to be agitated," he added.
One of the recurring themes in the transportation debate is a lack of public confidence in how the state spends money for roads, bridges and other forms of transportation.
Voters in 1989 approved financing for 16 projects statewide, including a new bridge that connects New Roads and St. Francisville.
However, 28 years later, two of the projects totaling about $500 million are barely underway.
One is the construction of La. 3241 between Interstate 12 and Bush in St. Tammany Parish. The other is the building of a new Florida Avenue bridge over the Industrial Canal in New Orleans.
When they will be done is unclear.
"We are proceeding, but at a much slower pace because we don't have the dollars," Wilson said.
The state is typically expected to put up 10 percent to match the federal dollars.
The original estimate for all 16 projects was $1.4 billion. The latest is $5.2 billion.
In recent years, DOTD officials have resorted to creative financing to come up with matching dollars to keep the federal money flowing. That includes the use of "toll credits," where toll revenue from two bridges eligible for federal dollars serves as the match.
"That toll money is just like a match, but it is not cash," Wilson said. "We have used it the last couple of years as a filler."
However, that funding source is expected to soon fall short, leaving the state without the needed revenue.
The state also would be unable to collect federal dollars turned back by other states that fail to meet federal requirements. Louisiana got $39 million last year using that route, on top of its normal allocation.
Havard, as he has been for months, is convinced voters would not embrace a huge increase in the state gasoline tax. But more dollars are needed for transportation, he said, and the only question is how to raise it.
"We have to have money to draw down those federal sources," he said.