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BATON ROUGE— While debate over the expiration of more than $1 billion in temporary state taxes centers on the risks to health and education programs, the ripple effect also threatens to cause a cash crunch for state-financed construction work.
Louisiana’s so-called “fiscal cliff” won’t just hit the state operating budget in mid-2018. It also could dry up dollars available for college building repairs, projects tied to economic development deals, parish water system upgrades and road work.

The Bond Commission — a panel of legislative leaders, statewide elected officials and members of the governor’s administration — received that reality check this month from its financial advisers and the offices that oversee construction spending, known as capital outlay.

The message might be a jarring one to lawmakers who routinely jockey for dollars to pay for favored projects back home and who use those projects to show voters how effective they’ve been in office.
Commissioner of Administration Jay Dardenne, the governor’s chief financial adviser, warned that the constraints caused by the expiring taxes could have the state “essentially shutting down the capital outlay program as we’ve known it in the past.”

Gov. John Bel Edwards wants lawmakers to consider raising taxes to fill the more than $1 billion gap, but he’s been unable to get legislative support for the idea so far, with House Republican leaders bottling up most of the proposals.

The Democratic governor is hoping to restart negotiations, and the impact on construction spending could be one more piece of leverage to try to get lawmakers to talk taxes.
Louisiana borrows money to pay for items in the construction budget by selling bonds to investors for upfront cash. In exchange, the state repays the debt over decades with interest.

But the state has borrowing limits. A debt cap enacted in the early 1990s requires that annual repayment requirements fall under 6 percent of the state revenue forecast.

When the temporary taxes expire on June 30, 2018, Louisiana will have less revenue on the books.

That will drive down borrowing capacity to 6 percent of the lesser number, shrinking dollars for construction work in the 2018-19 budget year.

“The reality is that if we don’t choose to do something next year because of the fiscal cliff and because of the limit on the debt, (Louisiana) is going to have to start slowing down projects,” Dardenne said.

As the Bond Commission readies for a September bond sale to generate $341 million to keep dollars flowing to construction projects, state officials learned that the expiring taxes will make for some tricky choices ahead.

Traditionally, Louisiana uses general obligation bond sales that involve a 20-year payoff with level payments each year.

But Lela Folse, director of the Bond Commission, said structuring the upcoming sale in that fashion would mean the state couldn’t do another bond sale in the following budget year.

That would leave no way to replenish dollars for capital outlay projects for a year, forcing the state to slow down — or stall entirely — many of its projects.

Another, less traditional option, Folse told the commission, could have the state borrow some money after the taxes expire by delaying repayment and then back-loading the debt payoff.

But such a bond sale would have the state paying about $13 million more in interest.

The state’s financial adviser, Renee Boicourt with Lamont Financial Services Corp., said a “modest restructuring” of the way Louisiana borrows money to finance construction work shouldn’t sound any alarm bells for Wall Street. But she also said questions would be asked.

For a state already being closely watched by national credit rating agencies, heaping on new financial questions may not be advisable.

Of course, the dire scenarios for construction work hinge on an assumption that all the temporary taxes expire without replacement. Boicourt noted that filling even a portion of the gap would give Louisiana more wiggle room to borrow money for projects.

Consider the construction budget one more variable in the debate as Edwards and Republican legislative leaders spend the coming months haggling over whether to pass taxes or slash spending.

Melinda Deslatte has covered Louisiana politics for The Associated Press since 2000. Follow her at http://twitter.com/melindadeslatte

Todd F. Thompson, 66, a native of Morgan City and resident of Berwick, died Monday, July 31, 2017, at Teche Regional Medical Center.

He is survived by a stepdaughter, Pam; two stepsons, Ernest and Lonnie; two step grandchildren; two step great-grandchildren; and a sister, Amber Kimball of Patterson.

He was preceded in death by his parents, a sister and a brother.

Visitation will be Thursday from 11 a.m. until services at 1 p.m. at Twin City Funeral Home. He will be laid to rest in the Morgan City Cemetery.

Twin City Funeral Home is in charge of arrangements.

Bruce Ratcliff, 73, a native of Morgan City and resident of Bayou L’Ourse, died Saturday, July 29, 2017, at his residence.

He is survived by six sisters, Opal Sullivan of Adele, Georgia, Ruby Ratcliff and Stella Dupre, both of Berwick, Linda Armond of Calumet, Betty Lyn Armond of Houma and Stacey Scott of Baton Rouge; and two brothers, Calvin Ratcliff of Bayou L’Ourse and Charles Ratcliff of Thibodaux.

He was preceded in death by his parents, four sisters and one brother.

Visitation will be Thursday from 4 p.m. until memorial service at 6 p.m. at Twin City Funeral Home.

Twin City Funeral Home is in charge of arrangements.

It took Lue Sullivan just a few minutes to run home for the shotgun he used to kill a man — leaving him with more than 43 years in prison to regret it.

“I was too big for my britches,” says Sullivan, who was 17 when he followed his 14-year-old common-law wife to the Jefferson Parish home of a rival and shot him through the door. “I’d been drinking and ... he told me that he’d been coming to my house every morning when I got to work and seeing my woman.”

Sullivan, now 61, was released from prison in December after his life-without-parole sentence was commuted by Gov. John Bel Edwards. But as Louisiana officials deal with a mandate to resentence some 300 inmates who, like Sullivan, got life without parole for murders committed as minors, it’s uncertain how many others will be granted that freedom and, if so, how soon.

Decisions last year by the U.S. and Louisiana supreme courts resulted in an order that these inmates be resentenced. In June, state lawmakers approved legislation that would make juvenile lifers eligible for parole after 25 years in prison, unless a prosecutor intervenes.

Over the last year, at least 67 juvenile lifers have been resentenced to life in prison with the possibility of parole, according to advocacy group the Louisiana
Center for Children’s Rights. A small number has received new no-parole terms, and four, including Sullivan, have been released.

State officials initially rebuffed efforts to address these cases, saying a 2012 U.S. Supreme Court ban on mandatory no-parole terms for juvenile homicide offenders didn’t apply to those already in prison.

That argument fell apart when the nation’s top court took up the case of Henry Montgomery, in prison since 1963 for fatally shooting an East Baton Rouge sheriff’s deputy.

The court said its ban was retroactive for the more than 2,000 offenders serving such sentences nationwide. Life without parole is still allowed in rare cases, but
the offender’s age and potential to change must be considered.

Montgomery, now 71, was resentenced in June to life with the possibility of parole and is among several dozen juvenile lifers in the state eligible for hearings before the Board of Pardons and Parole. Reviews are likely to move slowly, to ensure inmates have completed requirements that include obtaining a GED certificate and to give officials time to study the cases, said Keith Nordyke, an attorney who’s been representing lifers before the board.

“This is not going to be a process where there will be a floodgate of people coming out. It’s going to be drip, drip, drip,” he said. “It’s going to be a carefully studied release based on demonstrated maturity and rehabilitation.”

Louisiana has 303 people who were sentenced to mandatory life without parole for crimes committed as juveniles, according to the Department of Public Safety and Corrections. All were convicted of first- or second-degree murder.

Many prosecutors and judges moved tentatively to deal with resentencings while questions hung over how they should be handled and whether the law would change. Lawmakers failed in 2016 to pass a measure that would have made juvenile lifers eligible for parole after 30 years. The state’s district attorneys have opposed efforts to eliminate life without parole for juvenile offenders.

“Let’s find out who is the worst of the worst and meet with our victims’ families and make a decision of whether for public safety purposes, this former juvenile offender should be able to have that benefit” of parole, said Hillar Moore III, district attorney for East Baton Rouge Parish.

Some youth advocates say the new state law, effective Aug. 1, doesn’t do enough to curtail no-parole sentences for juveniles, because it gives district attorneys the option of petitioning judges for the sentence.

“This legislation enables the state to stay on its misguided course, which in all likelihood will lead to further litigation and a directive to once again revisit our legislation,” Aaron Clark-Rizzio of the Louisiana Center for Children’s Rights said in a statement.

His group says that by its count, 18 of 23 juvenile offenders tried in the state for murder since the Supreme Court’s ruling five years ago have been sentenced to life without parole.

State Sen. Dan Claitor, who sponsored the new state measure, said time will show whether prosecutors are sparing in seeking life without parole. “The numbers tell a tale, and we’ll find out,” he said.

Under the new law, juvenile offenders convicted of murder since the Supreme Court’s 2012 ruling will not get a second hearing.

But if they were sentenced to prison with the possibility of parole originally, they will now be eligible for release after 25 years. Under the law, only juvenile offenders newly convicted of first-degree murder can be sentenced to life without parole.

All those newly convicted of second-degree murder will be eligible for eventual release.

When Montgomery appeared in court this year, Becky Wilson, the daughter of the deputy he killed, told the judge her father’s death had upended her childhood and her family’s life for decades.

“Your honor, I’m sorry. I’m sorry,” Montgomery said.

“I’m just sorry for this whole situation.”

Prosecutors noted arguments for and against his release.

He had killed a law enforcement officer, but his prison record was clean. He’d started a boxing club for inmates and had a long work record.

“This is not an easy thing for me to do . because one man is dead and the family is still living through the consequences,” Judge Richard Anderson said in resentencing Montgomery. “But the law is the law.”