Adley noted that, of the about
$12.3 billion in identified spending on infrastructure in the state, this year
only about 5 percent of that will get addressed. That means in 20 years it all
could be taken care of, except that, of course, new things continue to emerge.
So, practically speaking, the backlog on some items may go on for at least a
decade.
It’s an issue he and other
legislators have voiced concern about in the past, most recently when some of
them complained
about the state giving extra money than statutorily required for roads to
parishes and how other dollars dedicated to roads were siphoned off to be spent
on state police. Besides stopping these practices, Adley has thrown out another
idea to whittle down the backlog.
That is by changing the “base”
level for mineral revenue excesses that must go into the Budget Stabilization
Fund, the savings account for the state. The Constitution
stipulates that all money above that level must go to the BSF; the higher the
level, the more money available for the state to spend. Further, it says that
the rate may be changed by statute with a two-thirds vote in each house every
ten years, and it was last done by moving from $750 million to
$850 million in 2004. Further, that increase can be only as much as half of
the total percentage increase in the Consumer Price Index (Urban) for the
immediately preceding decade – which had it took effect at the end this
September would have meant a maximum increase of $105 million.
Thus, Adley proposes that, at
maximum, this much more could be spent by state government should at least $955
million in mineral revenues manifest for the state in a fiscal year – which it
has been over comfortably for some time, such as in fiscal
year 2013 by about $425 million (and therefore even a drop
in oil prices that has put the state in some budgetary difficulty during this
fiscal year still would leave the state well above the current base.) This
would end up diverted from the BSF, which cannot exceed four percent of the
total state revenues for the previous year, but it being only half full means
there’s plenty that still could be put in it (although that will go up quite a
bit in the coming year because of previous
actions.)
Adley declares that “Government is
not in the business of creating savings accounts. If we don't need the money,
we need to give it back to the people, or we need to spend it on what we do
need. Right now the largest demand in this state is funds for infrastructure.” But
that’s not correct; the largest demand in Louisiana now is to ensure that the
state’s operating budget is in balance, and with projected Fiscal Year 2016 continuing
revenue sources projected now to be in the neighborhood of $1.4 billion fewer
than were made available as revenues this year, the BSF might become part of
the formula this year to close that gap, as if the FY 2016 projected revenues fall
much further, they may end up below the forecast FY 2015 revenues, triggering eligibility
for use of the BSF in this instance. Raising the base could mean $35 million
available for current spending from the BSF.
In short, it’s too early to think
about raising the base. Not only do potential looming deficits require
attention, even if they do not manifest other things should be taken care of
first, such as eliminating the need to dip into the Transportation Trust Fund
to pay for state police or the extra funds given to parishes (they can find their
own revenues to pay for their own projects above what the state is required to
give them), which would put $76 million extra a year into roads, or more than
70 percent of the extra if the base were raised to its presumed maximum. Only
when these allocations have been altered should thoughts turn to raising the
base.
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