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PAR Releases Capital Outlay Reform Agenda

Click here for a copy of the research brief.

Click here for a copy of the backgrounder.

A research brief released today by the Public Affairs Research Council outlines the essential elements of comprehensive capital outlay reform, many of which are missing from the reform bills currently making their way through the Legislature. “Capital Outlay Reform Agenda for Louisiana” makes 10 recommendations for reforming the way the state decides how to spend its construction dollars.

Real reform must tackle each of the three major problems with the current capital outlay process:

  1. Governors can use capital outlay commitments as a bargaining tool when they are trying to get legislative support for their agendas.
  2. Funding is committed for projects years in advance with no limit on how large a backlog is allowed.
  3. Some projects are authorized with little objective or rational basis.

PAR’s comprehensive reform agenda recommends the following:

  1. Develop a realistic capital outlay program that limits future-year commitments to the amount of cash flow the state expects to have available for project expenditures.
  2. Place in statute the limit on new debt available for cash lines of credit for capital outlay projects.
  3. Incorporate legislative committees into the post-session process of deciding which projects will be sent to the Bond Commission for lines of credit.
  4. Shift responsibility for developing the five-year capital outlay program from the governor to the Joint Legislative Committee on Capital Outlay.
  5. Revise the capital outlay request forms to require applicants to provide a thorough feasibility study or cost/benefit analysis.
  6. Require a 25 percent match for non-state entity projects and a means by which to grant exceptions.
  7. Limit non-state entity projects to 25 percent of the new cash line of credit capacity made available each year.
  8. Set aside $100 million of state revenues to start a Revolving Loan Fund for non-state entity capital projects.
  9. Remove the Joint Legislative Committee on Capital Outlay from the late request submission approval process.
  10. Prohibit state agencies, such as higher education institutions, from bypassing the capital outlay process and going directly to the State Bond Commission to get approval to issue bonds for construction projects.

PAR also released today a background report to accompany the research brief. “Louisiana’s Capital Outlay Process explains the current process for a deeper understanding of the ways in which political gamesmanship interferes with rational and transparent project selection.

Both reports are available on PAR’s Web site at www.la-par.org.

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