The cash-strapped state is stretching its credit limit to the max and is not in a position to be spending its limited construction dollars on new buildings it already can’t afford to maintain, Gov. John Bel Edwards said in a Thursday news conference.
Edwards announced he was taking a “radically different approach” to funding state construction projects this year, as laid out in the annual capital outlay budget.
He said funding would be prioritized for roads and deferred maintenance for state buildings, particularly on college and university campuses. That means no “shiny, new” buildings and no pet projects for legislators.
“I made a commitment during the campaign to get realistic with our state’s construction dollars, to focus on fixing our roads and taking better care of our state buildings and to stop overbudgeting our capital outlay bill with projects we tell people back home are in line to be funded but which in reality have little hope of ever being funded,” he said.
Higher education campuses have a backlog of about $2 billion in deferred maintenance projects, which largely include leaking roofs, broken air conditioning and heaters and federally required updates to make buildings and spaces accessible for people with disabilities.
LSU’s Middleton Library floods on the bottom floor when it rains, and Southern University was flagged in a recent audit that found potentially dangerous safety hazards.
Edwards said Thursday that constructing new buildings on college campuses also creates added maintenance and staffing costs that universities and colleges can’t afford to fund.
The Department of Transportation and Development also has a staggering $12 billion backlog in projects for road repairs, highway upgrades and bridge fixes.
Edwards said more than $80 million would be put toward projects that build and fix roads in Louisiana this year.
He said this year’s capital outlay bill will have $1 billion less in recommended low-priority projects, which in the past often have been automatically reauthorized from year to year. When projects are added to the construction budget for state funding by lawmakers, they are put in a queue, which often takes years to come to fruition.
The projects can sit on the capital outlay budget as a low-priority project, rolling over automatically from year to year. But this year, instead of simply rolling them over into this year’s budget, Edwards said many of them will not be recommended for reauthorization.
“It’s not appropriate to have projects in the capital outlay budget that add up to hundreds of millions of dollars beyond the bond capacity of the state of Louisiana,” Edwards said, noting that Louisiana’s credit rating was downgraded recently for the first time in years by Moody’s Investors Service.
In practice, many of these projects might never have received funding anyway, but the move, Edwards said, is a step forward in terms of transparency and setting the state’s priorities.
House Bill 2, which details the capital outlay expenditures, hasn’t been filed yet. The Legislature can make changes to the bill, but ultimately, the governor recommends to the state Bond Commission which projects should be funded, Commissioner of Administration Jay Dardenne said after the news conference.