HB2 debate

Louisiana House Ways & Means Chairman Neil Abramson, D-New Orleans, explains Wednesday, May 24, 2017, the legislation that funds the state's construction projects.

The House Ways and Means committee wants to reassess how surplus dollars will be used before voting on legislation that funds state construction projects.

Democratic New Orleans Rep. Neil Abramson, who chairs the committee, postponed voting on House Bill 2, which authorizes spending for the state’s construction projects. Ways & Means is the first step for the measure, which also need the okay from the full House, the Senate and the governor before the projects receive funding beginning July 1.

“We have a limited amount of resources and now that we actually have some cash that we’re going to allocate to capital outlay, we want to make sure that the cash gets used and gets used as efficiently as possible,” Abramson said.

Called capital outlay, HB2 is the main measure that authorizes funding for a variety of state construction projects from roads to sewer systems to playgrounds.

House Bill 874, by Appropriations Committee Chair Cameron Henry, R-Metairie, is a supplemental funding measure, which uses some of the state’s $122.6 million surplus to fund one-time capital outlay expenditures. The allocation covered about 223 ongoing capital outlay projects with budgets generally under $150,000.

HB874 was advanced by the House Appropriations committee Monday, but has not arrived to the House Ways and Means committee yet. But it was the legislation that dominated debate.

Shifting the projects from the capital outlay budget to the supplemental funding bill was a clean way to finance small projects while avoiding incurring a 20-year debt obligation, said Assistant Commissioner of Administration Mark Moses, of the Office of Facility Planning and Control.

Despite being heartened by the possibility of additional funding, the committee was skeptical about the proposed use of the surplus money.

Abramson said his staff was reviewing roughly 116 projects on the surplus list to determine if they were still active and warranted funding.

He knew of several projects in his area that have been complete for years and said the money allocated to those projects should now go to paying for other debts. Abramson’s staff found roughly $3 million allocated to projects they perceived hadn’t been active in years, he said.

“We don’t want to tie up resources on projects that don’t need them because they’re finished or they’re not moving forward for some reason,” Abramson said.

Moses disagreed with Abramson’s conclusions and said his staff was independently reviewing the list. So far they had found only 16 projects that were candidates for removal, but the total allocations amounted to roughly $500,000, not $3 million, he said.

The Division of Administration and House Ways and Means committee will continue to review the projects to determine if there’s any waste. Moses said in some cases capital outlay projects are complete, but allocations still need to be made because there are lingering expenditures that haven’t been invoiced.

Abramson said requirements may need to be set for businesses that don’t submit their bills in a timely fashion. He said businesses could be required to submit a certificate of completion for state and local projects, or be denied capital outlay funds in subsequent applications.

After years of approving far more projects than the state had money to pay, the construction plan under consideration prioritizes those projects that the state has the ability to pay with available money or by selling bonds. Moses said the new focus is on developing a lean capital outlay plan and clearing the books of existing projects.

About $575 million will be used to reauthorize projects already in the pipeline by the proposals. About $47.5 million in new appropriations are funded by the state surplus.

Moses said the additional money will focus on the state’s transportation and building maintenance priorities, with $20 million going to statewide building repairs, another $20 million to the Department of Transportation and Development, $2.5 million to roofing repairs on state buildings and $5 million to fund a new project at the LSU School of Veterinary Medicine.