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Louisiana Discovers $249M to Spend on Construction Projects

Wed May 10, 2006 - Southeast Edition
CEG



BATON ROUGE, LA (AP) For two years, the state construction budget had little wiggle room for new projects, but lawmakers learned April 11 that the state has more than $249 million to spend on new buildings, repairs and renovations next year.

That won’t be nearly enough to cover all the requests that pour in, requests totaling $1.6 billion so far, according to Jerry Jones, director of the governor’s Office of Facility Planning and Control, which oversees state construction projects.

However, the money available to start new projects next year is a significant increase over the past two years when the state had less money to spend because of previous construction commitments made by former Gov. Mike Foster’s administration. In the current year, the state has had approximately $80 million to spend on new projects and less than that the year before.

“It’s a real positive picture,” said Rep. Bryant Hammett, D-Ferriday, chairman of the House Ways and Means Committee, which will work on the construction budget for the fiscal year that begins July 1.

Jones cautioned committee members that the construction budget bill submitted by Gov. Kathleen Blanco’s administration already includes approximately $242 million in new projects, leaving lawmakers with only $7 million in unused project capacity unless they remove some items.

Jones asked lawmakers not to load up the bill with more projects than there is money to spend — the way the bill is typically handled by the Legislature.

“We’re asking you don’t go crazy in the process,” he said.

The construction budget, known as the capital outlay bill, tends to become a wish list. Each year, the bill is stuffed with more projects than there is money to pay for them. That leaves the governor’s office to choose among the hundreds of items to determine, which few actually get in line for funding.

The bill currently totals approximately $3.8 billion. It outlines $2 billion in spending of cash: federal money and revenue sources such as fees or taxes dedicated to specific projects like road improvements.

The remaining $1.8 billion includes state buildings or local projects like sewage treatment facilities and civic centers to be funded through bond sales either in the upcoming year or in future years.

Jones said the state has a self-imposed $342-million annual limit on borrowing in the upcoming year, and of that, $249 million can pay to begin new projects. The rest is committed to projects already under way or completed.

The new state construction spending won’t pay for repairs to state buildings that were damaged by hurricanes Katrina and Rita. The governor’s office plans to cover those costs with insurance money, FEMA reconstruction dollars and federal hurricane recovery block grants.

Jones said the hurricanes forced up the costs of new projects because of labor shortages, housing shortages for workers and a volume of rebuilding needs that has projects competing for contractors. The state’s dollars will cover fewer new projects because construction costs are expected to be up to 30 percent larger than they were before the storms, Jones said.