Lawmakers: Local COVID aid spending may affect state funding

Though state government cannot dictate how Louisiana municipalities and parishes use their shares of billions in federal stimulus money, legislators plan to remember how local leaders spent the money when the locals come to Baton Rouge seeking state funds, lawmakers said Monday.
The St Mary government and parish municipalities are in line for more than $20 million in aid under the latest COVID recovery legislation.
“Every town, every city is going to get some [federal money],” Commissioner of Administration Jay Dardenne told the Senate Finance Committee. “It’s March madness, government style.”
Gov. John Bel Edwards’ administration is proposing spending some of the state’s $3 billion-plus in federal money on water and broadband infrastructure and tourism promotion. Local governments collectively will get almost $2 billion and should be able to contribute funds for those same purposes, lawmakers said.
“We’re going to have to put some stipulations on money that’s going directly to local governments so that we have some connectivity [between the state and local governments],” said Sen. Gerald Boudreaux, a Lafayette Democrat.
Local government leaders who don’t spend the money wisely will face a skeptical Louisiana Legislature when they ask for more money later, Boudreaux said.
The administration also wants to consider spending a significant chunk to pay for the state’s cost share of a hurricane protection system in the New Orleans region. It could cost more than $1 billion if paid off in a few years and as much as $3 billion, including interest, over 30 years.
The administration has proposed raising $400 million through a bond sale to make a hefty payment on the debt this year, which could save money but limit the state’s borrowing capacity for other projects. Federal rules about how the money can be spent have not been issued, and Dardenne said Monday he didn’t know whether paying the hurricane protection debt would be an acceptable expense.
Dardenne said the administration has submitted to the federal government more than 100 questions seeking to further clarify how the money can be used. Water and broadband infrastructure and making up for government revenue reductions are among the permissible options.
Sen. Cameron Henry, a Metairie Republican, said parishes directly benefitting from the system should be asked to contribute to the cost.
“We need to ask everybody to chip in a little bit,” Henry said.