Shortly after President Joe Biden signed the $1.9 trillion American Rescue Plan Act into law earlier this spring, Gov. John Bel Edwards announced his priorities for spending Louisiana’s $1.6 billion share of the pandemic relief money, including some $400 million on badly needed road and bridge projects around the state.
But earlier this week, the Treasury Department issued the interim final rule for how ARPA money can be spent, and it appears to preclude using the funds for transportation infrastructure projects, including highways, bridges and rails.
The development has lawmakers and lobbyists at the state Capitol scratching their heads, trying to figure out what the rules will mean for the projects they had hoped would be funded this year.
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“At this point, we haven’t seen where we can spend the money on roads and bridges,” says Scott Kirkparick, executive director of the transportation infrastructure advocacy group, CRISIS. “We’re waiting to see how these critical infrastructure projects can be funded.”
Edwards’ plan for the federal windfall includes $400 million to shore up the state’s Unemployment Trust Fund; $230 million to pay down the unemployment insurance loan; $300 million for water and sewer systems; nearly $200 million on tourism, recreation and ports; and the $400 million in transportation infrastructure projects.
Some of those projects have been on the books for years. They include:
• $75 million for La. 3241 in St. Tammany Parish;
• $75 million to widen I-20 in north Louisiana;
• $50 million to widen I-10 from La. 73 to La. 30
• $40 million to widen I-12 from La. 1077 to La. 21
• $40 million for contingency funding;
• $20 million for rail and mass transit projects.
Edwards’ communications director Shauna Sanford acknowledges the governor’s office is aware of the Treasury’s rules, but says only that, “We’re still reviewing it and working with the Legislature.”
She did not elaborate. Congressman Garret Graves’ office did not respond to a request seeking comment.
Sources familiar with the situation, however, say lawmakers and the administration may try to use the federal money, which can be spent to “make up for the reduction in revenues” due to the pandemic to free up money from the general fund that could then be put toward the transportation projects.
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It’s not clear if that will be allowed, however, or how it will all play out.
The Louisiana Revenue Estimating Conference meets next week and is expected to discuss the issue at that time.
This story originally appeared in a May 13 edition of Daily Report. To keep up with Baton Rouge business and politics, subscribe to the free Daily Report e-newsletter here.