Reworking the wish list: Lawmakers consider construction budget revamp

Published 4:19 pm Friday, March 21, 2008

BATON ROUGE (AP) — The state’s construction budget has been called a wish list, a joke, a source of political patronage that lets the governor dole out budget projects like Santa Claus with a sack of toys. House Speaker Jim Tucker called it “the most messed-up, crazy, politically motivated system in the country.”

But year after year, lawmakers have scrapped attempts to revamp it — until now, they say.

With the state overcommitted to projects and a slate of new lawmakers at the Capitol, the Legislature is considering a serious revamp of the “capital outlay” process that might actually make the annual construction bill include only projects the state can afford each year. The idea will be up for discussion when lawmakers begin a regular legislative session March 31.

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“A radical change in the way we do capital outlay is most certainly expected in the upcoming session,” said Tucker, R-Terrytown.

Gov. Bobby Jindal’s financial advisers said the governor will recommend changes to the system — though how far his proposal will go remains unclear.

Here’s how the system works now:

Louisiana has a cap on annual borrowing that limits spending on construction projects to an estimated $350 million a year. Some of that money must be spent to pay for ongoing projects and items already given lines of credit in previous years.

The governor’s office submits its recommendations for construction projects in the annual capital outlay bill. Lawmakers load down the bill with more projects than there is money.

That leaves the governor’s office to choose among hundreds of items to determine which few actually get in line for state dollars — and it leaves university building repairs, state-owned health care facilities and state parks competing with town sewage system repairs, parish community centers, sports facilities and lawmakers’ local pet projects.

The State Bond Commission must vote on whether to grant lines of credit to projects submitted by the governor’s office. Since the commission is packed with the governor’s allies, that vote is seen as a rubber stamp.

The system abdicates the Legislature’s authority to appropriate the state’s money, but it also gives lawmakers a whipping post when construction projects don’t get funded: the governor, rather than themselves.

“The problem with the process now is the legislative aspect of the process is virtually meaningless,” said Treasurer John Kennedy, chairman of the Bond Commission and a frequent critic of the current construction budgeting system. “Just because you get a project in the capital outlay bill, you’re not even halfway home.”

Decisions are made behind closed doors about which projects will get funded, and the Bond Commission approves the list as a whole, rather than debating each individual project.

“If you get crossways with the governor, you’re not going to get a line of credit, and that’s just not a good way to do business,” Kennedy said. “That’s how we end up with projects that most reasonable people would look at and say that’s not a priority for the state of Louisiana.”

Lawmakers complain about the system regularly. Sen. Troy Hebert, D-Jeanerette, called the construction budget bill “a wish list where the governor gets to play Santa Claus.”

But for all the talk of reform, lawmakers repeatedly pile in projects each year. In 2004, then-Gov. Kathleen Blanco tried to remove projects from the bill, in attempts to make the bill more reflective of the state’s ability to spend, but senators added back many of those items, and reform efforts never continued.

“We need to have a system where we rank these projects. The projects need to be ranked based on the merits, not on the politics. And I understand reasonable people may disagree, but it ought to be discussed in a public meeting,” Kennedy said.

Sen. Robert Adley, R-Benton, has pushed for a ranking system and a bill that reflects what the state can afford for the past two years, but it hasn’t made it through the Legislature. He’s back again this year with the proposal.

“The reform bill would limit us to spend only what we have,” Adley said.

A shift in political climate may help with the proposed revamp.

More than half the House members are new to the Capitol thanks to term-limits. A new governor is in office, talking of reform. And former Gov. Blanco left lawmakers with a nearly $1.5 billion list of commitments to projects that have received non-cash lines of credit and expect state funding over the next few years.

New lawmakers worry those commitments will leave them unable to support their favored projects for construction. Returning lawmakers worry their already-approved projects, though granted promises of funding, won’t get those dollars — including projects like a new LSU public hospital planned for New Orleans. The Jindal administration wants to assert its own priorities as well for construction funding.

Only $74 million worth of the 678 projects granted non-cash lines of credit from the Bond Commission are under contract so far, according to the Office of Facility Planning and Control. That means the remaining projects in the $1.5 billion list of commitments could be on shaky ground for funding.

Several returning lawmakers said they think some of the unspent dollars from the current budget year — which could top $1 billion — should be used to help pay off the projects granted approval by the Blanco administration and the prior Legislature.

Although Jindal has suggested other uses for that expected surplus, Adley said the last administration left that surplus behind and its commitments should be honored. Then, the system then overhauled for future projects, he said.

“Louisiana has given her word on those projects, and I think she has to keep her word,” he said.

As for his revamp proposal, Adley thinks passage of his bill may rest in whether Jindal decides to support it.

The governor’s top financial adviser, Commissioner of Administration Angele Davis, said her office should have recommendations for changes to the construction budgeting process in the next two weeks. Jindal’s proposed capital outlay bill is due to lawmakers April 7.

“We’re open to discussions on capital outlay reform efforts,” Davis said. When asked about Adley’s proposal, she said, “I think there are some components in Adley’s bill that make sense.”