Will Baton Rouge fund our Roads?

Just released House Bill HLS 15RS-455, Original HB #2 provides for the following.  Please read the Outlay Process below this chart:A Road

Natchitoches Parish

Courthouse Security Improvements
Priority ONE   $480,000.00
Priority TWO   $280,000.00
Total                $760,000.00

Old River Bridge
Priority ONE      $610,000.00
Priority FIVE      $895,000.00
Total                  $1,505,000.00

Natchitoches Parish Office of Community Services
Priority ONE      $40,000.00
Priority TWO      $310,000.00
Total                    $350,000.00

Resurfacing of Roads in Payne Subdivision
Priority TWO      $1,015,000.00

Resurfacing of Blanchard Road
Priority TWO     $280,000.00

Resurfacing of Goldonna Road
Priority TWO     $1,835,000.00

Hard Surfacing of Coco Bed Road, Phase I
Priority ONE     $280,000.00

Louisiana’s capital outlay planning process begins and ends with heavy influence by the governor. The basic steps are as follows:

1.     The governor generates a capital outlay budget proposal with a list of projects to be granted cash and non-cash lines of credit. The list is divided into five priorities, which determine the order in which the non-cash projects will receive funding when it becomes available.
Priority 1 is limited to the reauthorization of prior year lines of credit or Higher Education Desegregation Settlement Agreement projects.  Legislators cannot just add anything to Priority 1.

Currently, legislators can add to priorities 2, 3, 4 and 5 without limit.

Priority 2 projects are expected to require some funding to get started in the current fiscal year. Any funding provided has to fit under the debt issuance cap, but the cost of projects included in this list typically far exceeds available capacity. This enables the governor to decide which bondfunded projects to submit to the State Bond Commission for lines of credit after the legislative session ends. Legislators get political credit for getting a project in the bill even if it is never funded. But to earn those bragging rights, they sacrifice real power to set capital outlay priorities.

Priority 5 projects can be granted non-cash lines of credit and/or be shifted upward to a higher priority. This is essentially the waiting list for future year cash lines of credit. The “overcommitment” problem is here, because the list amounts to a project backlog. Once a project receives a non-cash line of credit it is reasonably assured of eventually being granted full cash line of credit funding in a subsequent fiscal year.

2.     Capital outlay requests are made by state and non-state entities and submitted to the governor’s office for inclusion in the bill. The Division of Administration has a professional staff of budget analysts, engineers and architects who participate in a well organized and objective process for reviewing and categorizing capital outlay requests to facilitate the selection of projects to be funded in accordance with the governor’s stated priorities.

3.     The governor submits the capital outlay bill to the Legislature. The House Committee on Ways and Means, House Appropriations Committee, Senate Committee on Revenue and Fiscal Affairs and Senate Finance Committee have jurisdiction over the bill. Projects can be added by the Legislature to priority categories 2 through 5 regardless of capacity.

4.     The governor has the opportunity to veto those projects added by the Legislature.

5.     The Office of Facility Planning and Control in the Division of Administration manages the construction projects outlined in the act. Cash flow management plays an important role, because when projects are delayed or canceled for feasibility purposes, cash and non-cash lines of credit are made available to fund other projects in line. The governor recommends projects to the Bond Commission for funding approval.

6.     The State Bond Commission’s role is to grant or rescind cash and non-cash lines of credit. It also can approve certificates of impossibility and impracticality to allow for Priority 1 projects to be passed over while Priority 2
projects are granted lines of credit.  Language in the capital outlay bill basically says that no lower priority project can be funded with lines of credit unless all higher priority projects are either granted lines of credit or passed over with certificates of impossibility and impracticality.

The Interim Emergency Board’s (IEB) role in the capital outlay process, subject to mail ballot approval by a majority of the Legislature, is to designate a higher or lower bond priority for projects.  Moving funding for a delayed or canceled project from Priority 1 down to Priority 5 can be an alternative to issuing a Priority 1 certificate of impossibility and impracticality.  The IEB also can adjust the description of a project in the capital outlay act to correct, clarify or change the scope of a description.
Final decisions regarding which projects are funded are firmly in the hands of the governor. The governor controls project selection at two critical stages: initial development of the annual capital outlay budget and submission of lineof-credit requests for bond-funded projects to the State Bond Commission. The governor, the commissioner of administration and the governor’s handpicked legislative leaders account for 10 of the 14 Bond Commission member votes.

In addition, the governor also has line-item veto authority to delete any cash or bond-funded project in the capital outlay budget passed by the Legislature. The process leaves little authority in the hands of the Legislature and essentially makes the capital outlay bill a legislative wish list for governors to use as a bargaining tool to obtain support for their agenda in other areas of government.