Baton Rouge Business Report

Stepping up his push for transportation improvements, Gov. John Bel Edwards told businessmen Tuesday that the state has to increase its gas tax for better roads and bridges to become a reality.

“If you want more out of our transportation system,” Edwards said, “we are going to have to do more. And to pretend otherwise is to delude ourselves.”

The governor made his comments one day after he urged a joint session of the Legislature to come up with road and bridge solutions, without spelling out any detailed plan.

The state has a $13 billion backlog of road, bridge and other transportation needs, and the Democrat has sounded the need for improvements since early 2015.

A task force named by Edwards has recommended a $700 million yearly increase in transportation spending, mostly through a hike in the state’s gasoline tax.

In a hour-long meeting Monday with the editorial board of The Advocate, Edwards said he would go along with most any plan that is consistent with the panel’s recommendations. But the governor has stopped short of specifically saying just how much additional revenue he wants.

The governor on Tuesday addressed the 2017 Statewide Economic Development Summit, an annual meeting that includes leaders of some of the state’s largest corporations. Entergy Louisiana President Phillip May introduced Edwards to the several hundred participants at the luncheon.

The Louisiana business community has not embraced many of Edwards’ tax plans, which are aimed at repairing the state’s tax structure and curbing annual budget crises. But he does have some support among some businessmen who argue that the state needs to spend more to improve Louisiana’s chronically congested highways.

Last week officials of the Baton Rouge Area Chamber, One Acadiana and the Louisiana Chemical Association, and roughly 20 others, called for a $500 million increase in state transportation spending, with the gas tax as the chief funding source.

Twenty-three states have raised revenues to pay for infrastructure and transportation funding in the last five years. New Jersey Gov. Chris Christie, once he stopped running for president, recently signed legislation to raise that state’s gasoline tax by 23 cents, said Edward Mortimer, executive director of the U.S. Chamber’s transportation infrastructure. He joked that it isn’t often the U.S. Chamber, a congressional lobbying organization, endorses the idea of increasing taxes.

“Provide a backbone for the economy to help your businesses thrive,” Mortimer told the economic development gathering in the moments before Edwards took the stage.

How to tackle road and bridge funding problems is expected to be a key issue during the two-month legislative session.

Rep. Steve Carter, R-Baton Rouge, has said he plans to propose an increase of around 17 cents per gallon, which would raise about $500 million annually. Each penny raises about $30 million per year.

Motorists pay 38.4 cents per gallon now, including 20 cents in state charges.

Rep. Sam Jones, D-Franklin, a longtime friend of the governor, has proposed an increase of 10 cents per gallon – about $300 million per year – that would also require a public vote.

In his meeting Monday with the editorial board, Edwards downplayed the need to submit the issue to voters. But some lawmakers would be more willing to back a major increase in the gasoline tax if voters had the final say.

He said he would only favor doing so if it was the sole way to muster the needed two-thirds support in the state House and Senate – always a high hurdle politically. “That is better than not addressing the problem at all,” Edwards said.

Critics contend changes are needed in the state Department of Transportation and Development in how dollars are spent, possibly before any boost in the gas tax.

House Ways and Means Committee Chairman Neil Abramson, D-New Orleans, and Rep. Jim Morris, R-Oil City, are sponsoring two bills that would heavily revamp DOTD operations.

Any bills to raise Louisiana’s gas tax would first have to be approved by Abramson’s committee.

The governor made transportation one of his priorities for a session that will be dominated by how to address recurring budget problems.

“I urge you to take a serious look at what we can do to better invest in our state’s roads, bridges and ports going forward,” Edwards told lawmakers on Monday.

He said that, while the task force can serve as a guide, lawmakers have to act.

“The buck can’t stop there,” Edwards said. “Louisiana is ranked last in the nation for state investment in transportation.”

One of the problems, Edwards said, is that the value of the state’s gas tax – unchanged since 1989 – has been steadily eroded by inflation.

“We’ve got to restore the value of our gas tax if we expect to make any headway on improving our infrastructure,” he said.

Edwards said that, since he took office about 15 months ago, the fund that finances roads and bridges is now used only for those services after years of controversial diversions.

The governor also said that, without a $40 million injection of matching dollars from the general fund for transportation, Louisiana will be unable to get $200 million in federal money during the next financial year.

“Think about that,” he told reporters and editors a few hours after his legislative address, as well as the business leaders on Tuesday.

The last sweeping transportation plan – called TIMED – was approved nearly 30 years ago, endorsed by voters and put into the state Constitution.

Edwards said that, by specifying projects in the package, state officials had little flexibility in changing priorities. “It is a clunky way to do it,” he said.