(The Center Square) – The Louisiana State Bond Commission approved up to $300 million in borrowing Thursday for construction projects.
The bonds will fund about $288 million in lines of credit, of which $250 million is for state projects, $29 million is for local governments and $9 million is for nongovernmental entities. The commission approved the bond sale without objection.
Moody’s Investors Services raised its outlook of the state’s bonds this month from “stable” to “positive.” The agency said Louisiana’s state government has made progress aligning spending with revenue and praised state officials for creating budget surpluses in four consecutive fiscal years.
The state’s rating outlook has bounced up and down recently, The Bond Buyer reported. Moody’s dropped it from positive in March, after lifting it to positive from stable in September 2019.
The Bond Commission also approved 37 local tax elections for voters to consider April 24. Most involve renewals of existing taxes, but two of the proposals have failed before, Treasurer John Schroder said.
Senate President Page Cortez said many of the local governments that approved borrowing money to ensure cash flow amid the pandemic-related economic uncertainty have not had to draw down as much money as they originally had feared.
“Back in April or May of last year, we were in a fog, so to speak, as to where the revenues would be,” he said. “It looks like, in many cases, they haven’t been as bad as what was anticipated.”
Schroder said local borrowing for operating expenses was common before the pandemic.
“We’re borrowing money for payroll, which is not healthy,” he said.
Schroder later added that some local governments get themselves in trouble by using water and sewer fees to pay general expenses, then find themselves without enough money to maintain their infrastructure. He suggested the Louisiana Legislature consider banning the practice.