Bill would help cut inherited $1.465 billion project backlog to less than half

BATON ROUGE – In an effort to continue paring down a massive backlog in the state’s capital construction program, for the second straight year the Jindal administration has submitted to the legislature a capital outlay bill including no new non-cash line of credit (Priority 5) projects.

At the start of 2008, Louisiana state government’s capital construction program faced a monumental $1.465 billion backlog in Priority 5 project commitments – that is, projects that were approved without cash lines of credit but still obligations of the state.

In response, in both the capital construction bill proposed last year and the one submitted to the legislature this week, the Jindal administration exercised spending restraint by including no new Priority 5 projects, which would only exacerbate the problem, and instead continued to pay down obligations in an effort that would cut the backlog to $600 million, or to less than half, by the end of Fiscal Year 2010.

The proposed bill also adheres to capital outlay reforms passed last year (Act 911 of 2008) limiting non-state projects to no more than 25 percent of the new cash line of credit capacity for FY 10.

“This bill addresses high priority state construction needs and represents a commitment to honor the obligations the state has made instead of creating new obligations we can’t afford,” said Commissioner of Administration Angele Davis.

Out of an available $335 million cash line of credit capacity for FY 10, the bill proposes moving $285 million in Priority 5 projects forward to the Priority 1 cash line of credit category (which includes $219 million for state projects, $66 million for local projects); designates $30 million in Priority 2 cash line of credit supplemental funding necessary for existing state and regional economic development projects to proceed; and allots $20 million in Priority 2 cash line of credit funding for state or non-state projects designated by the legislature.

Combined with proposed FY 08 surplus investments in road and higher education construction projects with $131 million of outstanding non-cash lines of credit, the $285 million in projects moving to Priority 1 from Priority 5 would reduce the current $1.016 billion backlog to $600 million.

The capital construction bill (HB 2) is available online at http://www.legis.state.la.us/billdata/streamdocument.asp?did=648301.