Jim Beam column: Funding the $30 billion in road, bridge needs

Published 6:54 am Friday, May 6, 2022

Louisiana has some $30 billion in road and bridge maintenance and new construction needs, and legislators are trying to figure out how to pay for some of those projects. Among the immediate construction needs is a new Interstate 10 bridge over the Calcasieu River at Lake Charles.

This  bridge and three other so-called megaprojects got some funding in Act 486 of 2021. They are a new I-10 bridge over the Mississippi River at Baton Rouge and completion of road work on I-49 North and I-49 South.

Sen. Rick Ward, R-Port Allen, handled the 2021 legislation. It provided that 30 percent of the state sales taxes from the sale, use, or lease of motor vehicles in fiscal year 2023-24 would go into a Construction Subfund of the Transportation Trust Fund. In the following fiscal year and each fiscal year thereafter, 60 percent of those taxes would go into the subfund.

The 30 percent amounted to an estimated $148 million in fiscal year 2023-24. The 60 percent amounted to $296 million in fiscal  year 2024-25 and $266 million in fiscal year 2025-26. The act says 75 percent of that money goes to those four megaprojects and the other 25 percent to projects in the highway priority program.

Even with those funds, it is believed those megaprojects could only be completed with a P3, a public-private partnership. A private company would put up funding and construct the projects and any shortage of state construction funds would be made up with tolls to reimburse the company.

Shawn Wilson, secretary of the state Department of Transportation and Development, is already doing some negotiations with P3 companies on those megaprojects. Wilson has also said new bridges with tolls would be necessary to get the work done.

Sen. Cameron Henry, R-Metairie, amended the legislation to say the use of P3s would require approval from the Joint Legislative Committee on the Budget.”

Cortez is sponsoring Senate Bill 277 at the current session. His legislation creates the Megaprojects Leverage Fund. It diverts 75 percent of the funds in Ward’s act to that megaprojects fund. A fiscal note to Cortez’s bill says it diverts $243.8 million (75 percent of $325.1 million in fiscal year 2025) into the megaprojects fund.

Twenty-five percent of that $243.8  million would be deposited in each of those four megaproject funds each year. The money would be used to pay principal and interest on bonds issued to finance the projects. It would be called the Motor Vehicle Sales and Use Tax Bond Fund.

Anyone interested in more detail on what Cortez is trying to do will find it in the fiscal note for SB 277. The legislation has already passed the Senate with a 36-0 vote.

The fiscal note contains the estimated cost of each project. The new Calcasieu River Bridge and improvements to I-10 is estimated to cost $1.8 billion plus.

There is already $200 million available for funding the bridge and Gov. John Bel Edwards had another $100 million for the bridge in his budget. That money was still in the budget when it left the House but it needs Senate approval.

Estimated cost of the Baton Rouge bridge is greater than $2 billion for the bridge and connecting arteries. The governor had $500 million for that bridge in his budget, but it has been removed.

The estimated cost of I-40 South is $8.6 billion for 15 project segments (5 are complete at a total cost of $200 million). There is 7.5 million available, and $100 million in the state’s construction budget that hasn’t been approved yet.

Estimated cost of I-49 North is $865 million annually to $1.2 billion, depending on the route selection.

Putting equal amounts into those four project funds could result in extending their completion dates, the fiscal note says. Using a P3, along with bond funds, to speed up construction should certainly be considered.

The Cortez bill is awaiting a hearing by the House Appropriations Committee. If approved, as expected, it goes to the full House for debate.

Of the four megaprojects involved, there is no question a new I-10 bridge at Lake Charles should have the highest priority. We hope the Legislature will do whatever is necessary to make that happen.