By State Treasurer John M. Schroder

As Louisiana’s banker, part of my job is to tell you what you need to hear about the state’s finances. Unfortunately, it may not always be what you want to hear. It’s not always fun talking about sticking to a budget or pinching pennies, but it’s important if we’re ever going to get out of our current financial mess.

I am often asked to provide recommendations to fix the state’s budget. I respond that you can’t really point to one thing that will solve it. It’s going to take a lot of different things that will eventually add up to make a difference.

One place we can start is the state’s capital outlay system. The current process is broken. The governor and the administration use it to reward or punish legislators depending on lawmakers’ level of cooperation on various bills.

For example, if you toe the line on a governor’s agenda, your town may receive funding for new playground equipment. If you go against the administration, you may not get the funding you need for your drainage project.

As municipal officials, you may have had firsthand experience with the capital outlay system. In fact, you may have received funding over the years through the process. But I’m here to tell you the system is corrupted, and in order to fix it, we have to take the politics out of it.

Rep. Phillip DeVillier from District 41 has authored a capital outlay reform bill this session. House Bill 122 has passed the House of Representatives and is pending a hearing in the Senate Revenue and Fiscal Affairs Committee. The legislation is one way to ensure high priority projects like roads, bridges and drainage receive necessary funding. The bill would:

  • Prohibit non-governmental organizations (NGOs) from receiving any capital outlay dollars. Millions of dollars would no longer flow to NGOs.
  • Reduce the amount of money the state could spend in capital outlay.
  • Change the way the state allocates cash lines of credit. Under the current law, local governments and NGOs receive 25 percent of cash lines of credit. In the proposed legislation, local governments would receive the full 25 percent of funding. This includes 15 percent for highways, bridges and flood control/prevention, and 10 percent distributed on a pro-rata basis.
  • Provide at least $3 million for each DOTD highway district for deferred maintenance and no less than 50 percent of the remaining cash lines of credit for highway and bridge projects.
  • Require increased transparency around capital outlay debt and how it impacts state debt overall.When I first arrived in the Legislature, I recognized capital outlay reform was a necessity in our state. I still believe that today. Several bills to reform the process have made it out of the House three or four times but have never made it through the Senate.

HB 122 would take direct aim at a broken system, and I agree with Rep. DeVillier that his bill would put priorities over politics. I am also working on a plan to get more money to locals for their infrastructure needs.