Louisiana lawmakers prepare to deal with billions in federal dollars during short fiscal session

By David Jacobs | The Center Square

With billions in federal stimulus dollars headed to Louisiana, deciding how much money to spend and how to spend it during this year’s two-month fiscal legislative session will be more complex than usual, members of the State Bond Commission said Thursday.

State government will be getting more than $3 billion and local governments, collectively, will get about $2 billion as part of the American Rescue Plan.

“We need to look at those dollars as a first means of providing financing for projects so that we don’t have to bond things, so that we don’t have to tap into the general fund for things,” Commissioner of Administration Jay Dardenne said.

The Bond Commission includes representatives of the governor, lieutenant governor, attorney general and secretary of state, along with legislative leaders. The state treasurer chairs the commission.

Dardenne, who is Gov. John Bel Edwards’ lead budget official, said the administration is creating a matrix laying out available sources of funding, who will get the money, what are the limitations on how the money can be spent and the time frame during which the money must be spent. The federal government has not issued the official guidance, he said.

State officials, however, do know there will be fewer restrictions than were in place in last year’s Coronavirus Aid, Relief and Economic Security Act. The administration would like to use at least some of the state’s money to replenish the fund that pays for unemployment benefits and to improve sewer, water and broadband infrastructure.

State Treasurer John Schroder said he hoped some of the money would be used to chip away at some of the state’s $7.5 billion in debt.

“I see this as an opportunity to make up some ground,” he said.

State Sen. Bret Allain, who chairs his chamber’s Revenue and Fiscal Affairs Committee, said state government won’t be able to tell local leaders how to spend their share of the money. But for local projects requesting state funding, the Louisiana Legislature might allow locals to move their projects up on the list of priorities by committing to a larger match using their stimulus dollars, Allain said.

The commission approved the town of Sterlington’s request to refinance debt tied to a sports complex a previous town administration had approved. A state-appointed administrator has been trying to get the town’s finances in order since 2019.

Many cities and towns across the state may be facing similar problems, which could be addressed with the federal dollars, commission members said.

“We let [local governments] hang themselves, and we don’t stop it,” said Sen. Bodi White, who chairs the Senate Finance Committee. “Many other cities in our state are in that shape, they just haven’t called the notes yet.”