State running out of money for construction

BATON ROUGE (AP) — The state's pool of money to pay for ongoing construction projects is running dry, and Louisiana is teetering

so close to its debt ceiling that there's little room to borrow more to replenish the fund, officials said Thursday.

Without a new infusion of cash, Louisiana is

projected to run out of money to pay for college building repairs,

economic development

projects and state-funded road work in about four months, said

Whit Kling, director of the State Bond Commission that oversees

construction borrowing and state debt calculations.

State senators heard the troubling news of

the latest money problem in a briefing about Louisiana's finances by

Sherry Phillips-Hymel,

the chamber's chief budget analyst. She told senators that the

capital outlay fund is "very, very low."

"The fund is broke. The fund does not have sufficient cash resources, and without a change in the legislative statute, there's

no way to issue additional bonds," Kling, who watched the Senate briefing, said after the meeting.

The state can borrow money to pay for

construction projects through bond sales to investors, with the debt

paid off with interest

over several years. But Louisiana has a constitutional limit on

debt, and the state is $22 million from hitting its $605 million

debt ceiling, Phillips-Hymel told senators.

Kling said that leaves the state little capacity to issue new bonds to replenish the construction fund. He said the state

could borrow enough money to cover about four additional months of construction work before hitting the debt cap.

Among the options available, lawmakers in the upcoming regular session could seek to exclude certain types of debt from the

calculation of the cap, change the limit or vote to breach the ceiling. Phillips-Hymel said each proposal would require a

hefty two-thirds vote.

A limit enacted in the early 1990s requires that the state's annual debt-repayment requirements fall under 6 percent of the

state's yearly income from taxes, licenses and fees. The state has never exceeded the limit, and Kling said lawmakers have

never voted to spend above the cap.

A spokesman for Gov. Bobby Jindal's Division

of Administration wouldn't say Thursday what the Republican governor

will recommend

to keep the dollars for construction work from running out. But

Michael DiResto said the administration won't seek a legislative

vote to breach the debt cap.

"We will live within our means and we will

look for opportunities to achieve savings so that capital outlay

projects can continue

to move forward," DiResto said in a statement.

He also blamed the treasurer's office for offering past inaccurate guidance on borrowing limits.

"It's important to note that the treasurer's office previously advised that the state had more money to borrow than was actually

available. They have recently corrected their calculations," DiResto said.