You’ve probably heard about Louisiana’s fiscal cliff next year, but there’s also a fiscal crisis for infrastructure looming in 2019.
Officials said Louisiana is not generating enough money to receive matching federal funds for infrastructure and transportation projects. In 2019, the state faces losing those funds if legislators don’t come up with a plan.
When you buy gas, a portion of your money goes to the state and federal government. The federal portion is then reallocated back to states. But to get the money back, states have to provide matching funds.
“We are not generating enough in Baton Rouge to get all of our gas tax out of Washington. So we will actually start going backwards in 2019. Not just not catching up, not doing more, if we don’t figure something out,” said Governor John Bel Edwards, (D) Louisiana.
Interstate projects receive a 90 percent federal match to the state’s contribution of ten percent. Highway projects are an 80 to 20 percent match. Every state uses a portion of their gas tax to get the matching dollars, but projections show Louisiana will be short by 2019.
“Based on the projections for what we have for debt service for projects that were previously done over the last twenty years based on the increased costs of doing business in the state by 2019, we will be short enough money to match all the federal dollars that we get even today. That’s because we are using some one-time toll credits that allow us to perceive having a completed match when it’s really not cash. So it’s the equivalent of a credit that they’ve given us and those credits will be exhausted. So if we didn’t have those credits today, I would be giving federal money back to the United States Department of Transportation because of the inability to match,” said Dr. Shawn Wilson, Secretary of the Department of Transportation.
Wilson said least 30-million-dollars is needed to make the state whole.
“That’s disappointing because if President Trump is successful with an infrastructure package we could potentially see an increase in contributions from the federal government. That increase will come with an increased match. Which very well could mean if this President is successful, Louisiana may not be able to participate in any of those stimulus programs, or job creation programs, or infrastructure programs for transportation without the necessary match,” Dr. Wilson said.
He said it’s not a one time problem and relying on the state’s general fund makes it difficult to plan projects that take years to complete. The department recommended to the legislature to pass a gas tax until the debt is paid, but the measure failed during the last session.
“So we are going to continue to struggle for one time projects happen in making one time match if we do not have a sustainable plan like a new and improved gas tax. The gas tax has not been adjusted for nearly 30 years and it’s one of the lowest in the country,” Dr. Wilson said.
Governor Edwards said this will become a very difficult problem for the state and it will take a huge effort from the legislator to fix it in time.