Plan to sell bonds for roads gets tentative OK

The State Bond Commission gave preliminary approval Thursday to a plan to sell all $325 million on bonds for rural roads at once rather than spreading the sale over three years.

“My thought is we lock in the money today,” said state Treasurer John Kennedy, who is chairman of the commission.

“I am not real big on gambling with public money,” he said.

Gov. Bobby Jindal, who made the plan part of his legislative package earlier this year, initially wanted to sell $100 million of the bonds in each of the first two years and $125 million in the third year.

But financial experts told state officials that it makes sense to sell all the bonds this year — likely in December — because of historically low rates.

Kennedy noted that, if the state spreads the bond sales over three years and bond interest rates rise, that would mean less money for rural roads.

The improvements apply to roads that are ineligible for federal aid.

Backers initially said that every parish in the state except Orleans would see improvements.

Sherri LeBas, secretary for the state Department of Transportation and Development, said Wednesday that the overwhelming majority of parishes would benefit from the bond issue but not necessarily every one except Orleans.

Louisiana has about 6,000 miles of rural roads.

About 1,100 miles of roads are set to get upgrades.

Louisiana House Appropriations Committee Chairman Jim Fannin, D-Jonesboro, who sponsored the legislation, said he earlier had concerns about selling all the bonds at once but now agrees with the move.

The projects are supposed to come from a priority list kept by DOTD officials.

“We are anxious to get started,” DOTD Undersecretary Michael Bridges said.

“It does make sense to go with this one issue,” Bridges said.

The state’s bond counsel and others are set to return to the commission next month to spell out how the bonds will be structured and other details.

The resolution approved on Thursday allows for the bond sale at rates not to exceed 6 percent for a period not to exceed 22 years.

The spending relies on the State Highway Improvement Fund, which generates about $50 million per year from commercial vehicle registration and license fees.