It’s Christmas in July for Some Non-Profits in Swampland
The Louisiana State Bond Commission approved over $3.6 billion in financing last Thursday for a long slate of capital outlay projects authorized by the Louisiana Legislature during their unprecedented spending spree in Swampland (the Baton Rouge Capitol) earlier this year. This included over $105 million in cash lines of credit and new long-term debt obligations to finance projects for a select group of well-connected non-profit groups.
Source: LA State Bond Commission
The staggering list of projects includes a bizarre collection of parks, sports venues, theaters, and museums that seem to only have one thing in common-- politics.
Source: LA State Bond Commission
For decades, state lawmakers have used the flawed and secretive capital outlay process to steer hundreds of millions in taxpayer money to their favorite pet projects and nonprofit groups with whom they may be closely affiliated.
Too often, this growing pool of state funding is funneled to favored nonprofit groups with few reporting requirements and no real oversight to hold these nonprofits accountable for when, where, and how they spend your taxpayer dollars.
Making matters worse is the fact that most of these "community” initiatives may never make a difference in your life— but you and your children will be paying for them for a long time.
That’s because not only is the state using your tax dollars to pay for these projects, but it’s also taking on new debt obligations to provide financing for them—which means they will cost even more in the long run.
General obligation bonds are debt instruments issued by the state to raise funds for public works. They are the most commonly used means of financing long-term public capital improvement projects.
Last year, general obligation bonds made up about 44% of Louisiana’s outstanding debt—which cost nearly $1 billion in interest.
Source: Louisiana Department of Treasury
The Treasurer’s Office estimates the average amount the state owed in debt per capita in 2020-2021 was $1,591. This far exceeds the Southern state average and the national average.
Source: Louisiana Department of Treasury
Louisiana cannot continue down this path of reckless spending and increasing debt obligations—especially when it is to pay for non-state, non-governmental projects that should be managed and paid for by the private sector at the local level.