Governments are better known for spending money — indeed, over-spending — than for failing to allocate available revenues.
So how come Louisiana over the past 20 years has accumulated tens of millions in unspent revenue from tax-free bonds issued to pay for state infrastructure projects?
As reported in The Lens two weeks ago, it’s a sum large enough to pose potential problems with the Internal Revenue Service and cost the state a hefty penalty. The IRS requires that money raised from the sale of tax-exempt bonds be spent within a certain period of time, not just placed in an interest-bearing account, as Louisiana has done.
To mitigate the problem, the Legislature has come up with a bill that would take $70 million of the unspent bond money and allocate it in the coming year to fund dozens of new or ongoing projects. The $70 million is just a portion of the accumulated total, which is perhaps $100 million higher, according to state Rep. Joel Robideaux, R-Lafayette, the sponsor of the legislation.
Robideaux’s House Bill 2, which contains a list of the projects eligible to be funded by tax-free bonds next year, would shift the spending. The Senate approved the bill Thursday on a 33-0 vote. It now heads to the House.
To get a feel for how the money accumulated and why it hasn’t been spent, The Lens took a look at six projects chosen at random:
Northeast Louisiana Delta African American Heritage Museum: $123,000 in unspent funds
The state appropriated $2.7 million in 2001 to design and construct the museum in Monroe. The $123,000 was left over and until now has not been approved to be spent on another project, said Meghan Parrish, a spokeswoman for the state Division of Administration, which oversees state construction projects. (The state is allowed to take unspent money from one project and spend it on another one.)
The museum opened in 2011, said Lorraine Slacks, its executive director, after design and construction delays. It had about 7,500 visitors in 2013, she said.
New Orleans Museum of Art: $139,000 in unspent funds
The state appropriated $1 million in 2002 for improvements, acquisitions, planning and construction at the museum, including the City Park entrance. The $139,000 was left over and until now has not been approved to be spent on another project, Parrish said.
Danziger Bridge: $580,000 in unspent funds
The state appropriated the $580,000 in 2004 to build ramps for traffic entering and exiting the bridge at Jourdan Road. The project was approved as a way to improve the traffic flow for commuters who live to the west of the Industrial Canal and work at the Port of New Orleans, according to the original request for the money. But none of the money has been spent, Parrish said.
State and city officials could not explain why the project has not advanced.
Eastern New Orleans Community Center: $1,850,700 in unspent funds
The state appropriated the $1,850,700 in 2007 to build the community center. It was originally supposed to be overseen by the city of New Orleans, Parrish said, but is now under the District 2 Community Enhancement Corporation, a nonprofit.
“This project was delayed because the District had other projects to manage after Hurricane Katrina,” Parrish said in an email. “The purchase of land for the project also took longer than expected.” She added that the project is 20 to 25 percent complete.
Tiffany Crawford, the enhancement corporation’s executive director, said she expected it to open by September, at the junction of Crowder and Hayne boulevards, near Lake Pontchartrain.
Airline Highway in St. John Parish: $254,000 in unspent funds
The state appropriated $5,505,000 in 2010 to upgrade Airline Highway in the town of Garyville to handle the increased traffic generated by the expansion of Marathon Petroleum’s refinery. The unspent $254,000 has not been approved for transfer to another project, Parrish said.
Delgado Community College in New Orleans: $187,000 in unspent funds
The state appropriated $1.2 million in 2010 for a new air conditioning chiller at Delgado’s City Park campus. The $187,000 was left over and until now has not been approved to be spent on another project, Parrish said.
This story was updated after publication to note that the Senate approved the bill. (May 29, 2014)
