Bonds will pay for I-49 South work

\Next week, State Treasurer John Kennedy plans to sell about $80 million in bonds to help fund what he says is “the single most important infrastructure project in the state of Louisiana.”
Kennedy was the guest speaker at Wednesday’s St. Mary Chamber of Commerce Business Luncheon held at the Petroleum Club of Morgan City.
The bonds, backed by the state’s unclaimed property program, will fund part of the I-49 South project to upgrade the highway to interstate quality from Lafayette to New Orleans, Kennedy said. In St. Mary Parish, U.S. 90 will eventually become I-49 upon completion of the project.
In 2014, the state borrowed about $100 million to finish I-49 North in Louisiana.
“We’ve got I-49 North paid for. Now we’ve got to turn to I-49 South,” he said.
Kennedy doesn’t believe the state will get any federal money to fund I-49 South.
“We’re going to find this money ourselves,” he said.
Officials will have to find funding sources on the state level to move the project forward and to chip away at completing I-49 South, Kennedy said.
“It will touch 38 percent of our population,” Kennedy said of the project. “It will create a NAFTA, north-south trade corridor all the way from the Port of Orleans to the Canadian border. It’ll help us get out when there’s a hurricane.”
Kennedy said it’s impossible to overstate the importance of finishing I-49 South, “and we’ll eventually get it done.”
During his talk Wednesday, Kennedy also discussed his ideas of how the state can save money and get its budget under control. The state has a $25 billion budget for the 2015-16 fiscal year and went into this year’s legislative session with a projected $1.8 billion shortfall of expenditures to revenues, he said.
The Legislature imposed $827 million in new taxes to make up some of that projected deficit, Kennedy said.
“I don’t care how high they raise taxes. They’ll never solve the problem until we get control of our spending,” he said.
Kennedy wants legislators to spend the next legislative session focusing on how to lower costs while still delivering “a decent product or service,” he said.
One way to decrease spending is to reduce health care costs, he said. The state spends $9 billion annually on Medicaid and overhead at the Department of Health and Hospitals to serve the two million people on Medicaid, which makes up 40 percent of the state budget, Kennedy said.
“And it’s going up between 5 and 10 percent a year,” he said. Eventually, health care costs will affect the amount of funds the state has for higher education, construction of roads, coastal restoration and other things taxpayers “need and deserve.”
Kennedy gave an example of a way other states are reducing its health care costs that he says would also work in Louisiana.
According to the Public Affairs Research Council, Louisiana has 900,000 visits to emergency rooms for routine care, Kennedy said. Care in emergency rooms costs taxpayers five times what it would cost to get treated in a private clinic.
“All we have to do is what they’re doing in Texas and Washington State and Florida,” Kennedy said.
If someone tries to go to the emergency room to get treated for acne at Houston’s Memorial Hermann Hospital, that person will be met by a paraprofessional who will get that individual an appointment at a private clinic, Kennedy said.
If the state could reduce the 900,000 annual emergency room visits by 10 percent, government would save “tens and tens and tens of millions of dollars,” Kennedy said.
Another option state government could use to cut unnecessary expenses is to get rid of some of the managerial positions within state departments, Kennedy said.
A report by the state Legislative Auditor found that 22 percent of managers in state government manage one employee, he said.
The state should move towards having at least eight employees to one managerial position, Kennedy said.
“We don’t have to fire anybody. We can do it through attrition. We have a turnover every year in Louisiana state government employment of about 25 percent. You do that, and you’ll save millions and millions and millions of dollars,” Kennedy said.
Lastly, the state can reduce some of the 19,000 consulting contracts it currently has, Kennedy said.
“We don’t need all of them,” Kennedy said.
Kennedy gave an example of a consulting contract to analyze how kids play at recess as the types of unnecessary contracts in state government.
Kennedy said he has begged Gov. Bobby Jindal to tell his cabinet secretaries to cut 10 percent of the total value of those consulting contracts, which would help with reigning in the state’s budget.

This story was written by Zachary Fitzgerald of The Daily Review staff. Reach him at zfitzgerald@daily-review.com.