DALLAS - Louisiana legislators ended their six-day second special session on Friday after allocating hundreds of millions of dollars to road projects, port upgrades, and storm protection efforts from the state's $1.1 billion fiscal 2007 surplus.
Lawmakers went along with the spending plans proposed by first-term Gov. Bobby Jindal, as well as his request to cut business taxes by almost $250 million a year, raise the state spending level above the constitutionally mandated limit, and dedicate vehicle sales taxes to transportation infrastructure.
The transportation infrastructure program dedicates $253 million for maintenance and upgrades of existing highways and ports, and $210 million for new roads. Another $300 million will be spent on levee construction and barrier island restoration, and as the match for federal grants relating to hurricane protection.
The transportation program includes $43.4 million for port upgrades, and $57 million for the Cyber Research Center adjacent to Barksdale Air Force Base in Bossier City.
Other allocations include $75 million for deferred maintenance projects at state colleges and universities, which have a $1.8 billion backlog of maintenance needs. There also is $60 million to reduce unfunded liabilities of the state employee retirement system and $50 million for new facilities and equipment at a biomedical resource center on the Louisiana State University campus in Baton Rouge.
Among the measures finding easy passage at the special session was HB 5, which will allow the state treasurer to purchase as an investment the tax-exempt and taxable bonds issued by the Louisiana Stadium and Exposition District. The district, which oversees the Louisiana Superdome in New Orleans, requested the legislation after $294.3 million of its auction-rate debt recently reset at 12%, costing it an extra $60,000 a day in debt service.
Meredith Hathorn of Foley & Juddell LLP, bond counsel for the district, said she expected action soon on the debt service relief plan.
"We've been meeting with everyone since it passed, and we expect something to happen within the next six weeks," she said.
Jindal praised the legislators for their work at a news conference following the session adjournment.
"Today, we have made another major step forward in making our state one of the best places in the world to raise a family and get a great career," Jindal said. "We have sped up the elimination of taxes that are crippling the growth of businesses and detracting future investments. We have sent a signal to the world that Louisiana is not only open for business, but we are working to be one of the best places in the world for businesses to invest, grow, and create jobs."
"In this session we have also invested in Louisiana's future economic growth by making critical investments in levees, coastal restoration, ports, roads, and other areas important for our recovery and the needs of our entire state," the governor said.
Lawmakers approved a seven-year program to gradually shift revenue from the sales tax on vehicles from the general fund to the transportation trust fund.
Beginning in July, 10% of the revenues from the tax will go to the transportation fund. The allocation will go up each year until all vehicle sales tax revenues are dedicated to the transportation fund by fiscal 2015.
The rededication is expected to reduce general fund revenues by $31 million the first year and $300 million a year when it is in full effect. A provision would halt the transfer from the general fund if the state experiences a revenue shortfall that could not be resolved by the budget stabilization fund.
Louisiana's general obligation bonds are rated A by Standard & Poor's and Fitch Ratings, and A2 by Moody's Investors Service.