Louisiana Voters Split on Transportation Funding

Voters agreed to invest taxpayer money into infrastructure but rejected a measure to divert money from the state's rainy day fund toward transportation.
by | October 20, 2015
Interstate 49 in Louisiana near Chopin.

UPDATE: Louisiana voters approved a measure to allow the state treasurer to invest taxpayer money in the state infrastructure bank. But the voters rejected a measure to divert money that would normally go to Louisiana's rainy day fund to go toward transportation projects instead.

The two transportation-related ballot measures Louisiana’s voters will decide Saturday wouldn't fix all the state’s road repair projects. They wouldn’t even come close. But transportation advocates in the state hope that, if voters do approve the measures, it might help a little.

“Every step that we can take is one step better,” said state Sen. Robert Adley, a Republican who sponsored one of the measures. “You’re not going to go out there and solve an $11 billion problem in one bill. It’s going to take time.”

Maintaining roads and other infrastructure in the hurricane-prone state has never been never cheap, or easy. It’s been especially trying recently.

For one thing, the state is still feeling the effects of Hurricane Katrina a decade after the hurrican hit New Orleans. The storm showed the state needed better levees, evacuation routes and other infrastructure throughout the southern part of the state. The destruction it wrought led to big population shifts in Louisiana. Baton Rouge, in particular, has struggled to accommodate all the new drivers on its roads.

Meanwhile, outgoing Gov. Bobby Jindal has refused to allow any tax increases or fee hikes to help fix roads. His administration used transportation money to pay for traffic police, limiting money for construction and repairs. State transportation officials prioritized projects that could get a large federal match – like improvements to interstate highways -- to make the state’s dollars stretch farther, but that means the state often didn't make improvements to local roads.

So this spring, during the last year of Jindal’s tenure, lawmakers focused on shoring up transportation funding without raising taxes. They outlined a plan to pay for traffic police without relying on transportation money. And they referred two proposals to voters, who will consider them this week, at the same time they will vote on who should succeed Jindal as governor.

The first measure would cap the state’s rainy day fund, which is filled by taxes on oil and natural gas producers, at $500 million and direct any extra money from oil taxes toward improving the state’s infrastructure. The second would all the state treasurer to invest state money in an infrastructure bank to help cities and parishes finance new projects.

Adley, the chief proponent of changes to the rainy day fund, said $500 million in reserves should be enough to help the state make it through sudden drops in oil tax revenue. Louisiana brings in about $8 billion in general funds every year. Anything beyond $500 million, Adley said, should be returned to taxpayers or spent on improving the state’s infrastructure. He noted that Texas voters passed a similar proposal last year.

“This first year, (the transportation fund) should receive $17 million right off the top. That’s helpful. It’s not the solution, but it is helpful,” Adley said. That money could be used to help repair small bridges in rural areas, which are now in such bad condition that school buses must avoid them and travel miles out of their way to pick up students, he said.

Legislative analysts, though, predicted that the new fund would not bring in much money in its first few years. In the three years after the initial $17 million payment, the transportation fund would probably only bring in between $4.4 million and $9.3 million a year. Adley hopes those numbers will improve when the price of oil increases again, which means oil companies would produce more oil in Louisiana and pay more taxes on it.

But other groups worry about capping the rainy day fund because Louisiana’s budget faces chronic shortfalls.

"We are wary of the notion of further reducing the potential revenues in our rainy day fund and the future risks that would impose to higher education and health care," said the Council for A Better Louisiana. "We need a balanced approach to all of our budget issues and feel this amendment tips that balance a little further than we should prudently go.”

The second transportation question on the ballot would build an infrastructure bank in Louisiana, after several unsuccessful attempts. The legislature created the infrastructure bank in its last session, but the ballot measure would authorize the state treasurer to use state money to fund it.

With the infrastructure bank, localities could apply for loans from the state to build infrastructure projects. Rep. Karen St. Germain, a Democrat who sponsored the measure, said municipalities and parishes could work together to secure funding from the state. She said the state could offer lower interest rates than banks, although interest rates in the private market are now at historic lows.

Harris, executive director of the Louisiana Municipal Association, agreed. “What goes down must also come up, and that’s interest rates. If and when the economy rebounds, it will provide us with another option for getting funds,” he said.

St. Germain said the legislature’s recent work on transportation funding shows that lawmakers are taking the issue seriously, after years of relying on budget surpluses to get by. “Louisiana is finally taking its part in providing for infrastructure across the state for the first time in many, many years,” she said.