200905-biz-coverthumb.jpgYou could actually hear and see the disappointment dripping from the words exiting Kam Movassaghi’s mouth. He had just been asked how I-49 South would fare in the Legislature’s regular session, which just convened. Will the project get any state dough? What’s it looking like? “We’re mainly looking at federal dollars right now,” Movassaghi says grimly.

As chairman of the Greater Lafayette Chamber of Commerce, he has made the I-49 South initiative a top legislative issue. But despite his efforts, along with those of businesses and residents from Acadiana, the project’s $5 billion (and growing) price tag has proven way too hefty for lawmakers to address in any real fiscal way, although some dollars — not nearly enough — will be thrown I-49’s way.

Movassaghi and others attempted to head this off by lobbying the state to break down the colossal project into bite-size chunks with smaller bottom lines. That would have certainly been easier for lawmakers to digest. Yet many state officials seemed hell bent on labeling I-49 South as one, gigantic, unparalleled construction project during negotiations this year. “I just don’t get it,” Movassaghi says, his voice beginning to crescendo. “We’ve done the same damn thing for other projects over and over in the past.”

Things are bad all over, though. So bad, in fact, that I-49 South will not be the only fiscal victim following this year’s regular session; Movassaghi, to be certain, will not be the only figurehead left steaming. The state is facing a $1.3 billion shortfall, and practically every agency is slated for cuts. Even pork will be at a premium, or so we’ve been led to believe.

With no money from the feds on the immediate horizon and just a trickle of revenues coming from the state, Movassaghi says the time has come to seriously consider tolls along the I-49 South route. And while the chamber is prepared to help make the push, Movassaghi admits there’s only so much he can do.

If you want to put the crisis into perspective regionally, just travel up and down the I-49 South route. Each exit will offer a different story. Make your way over to UL, where budget reductions are already being made and tuition hikes are being explored. Move farther east into any of Acadiana’s farming communities and you’ll find important state services on the chopping block and agriculture agencies on their last legs. But, thankfully, it’s not all fire and brimstone. Before the session ends June 25, there will be enough twists, turns and detours to actually yield some positive results for Acadiana business and industry.

In Lafayette’s oil fields, for instance, producers are excited about a proposed set of incentives that could encourage more drilling. Environmentalists are also cheering about a package of bills that promote green fuels. Your business could see a tax break on utilities from the session. There’s even, surprisingly, a small glimmer of hope for I-49 South.





200905-biz-cover02.jpg
Model of proposed design for I-49 through Evangeline Thruway corridor
Courtesy UL Community Design Workshop
 
Despite the few scraps I-49 South will get from the session table this year, Movassaghi has every right to feel frustrated. His roots run deep and are of a personal nature when it comes to the increasingly fabled I-49 South initiative — a project that has progressed at a dismal rate since Dwight Eisenhower was president.

As transportation secretary under former Gov. Mike Foster, Movassaghi helped plant the first “Future I-49” signs along U.S. 90 more than 10 years ago and launched what remains the largest highway construction program in state history. Later in private life, Movassaghi turned his institutional knowledge into personal profit by taking over as president of Lafayette-based C. H. Fenstermaker & Associates, which has been involved with I-49-related work over the years.

Today, Movassaghi is chairman of the chamber of commerce and can be partly credited with creating a renaissance for the proposed New Orleans-Lafayette connector. He helped brand the project as “America’s Energy Corridor.” The 140-mile stretch of U.S. Highway 90 from Lafayette to the Westbank Expressway in New Orleans has the highest density of energy workers in the nation, and Movassaghi is quick to point out that 4 percent of all energy laborers in the U.S. work along the corridor and 36 percent of Louisiana’s population resides there, too.

But is anyone listening? While the I-49 North project received $42 million from the federal stimulus package to pave 4.5 miles of highway up to the Arkansas line, I-49 South received nothing at first ($34 million is proposed for an overpass near La. 85 in Iberia Parish).

And when it comes to the recently convened regular legislative session, the only perks seem to be $5 million from last year’s surplus for widening U.S. 90 from Morgan Street to the La. 182 bridge and $10 million in capital outlay money for an overpass at Four Corners in St. Mary Parish. About $14 million is also being directed to New Orleans to make interchange improvements, but no other dollars are currently proposed for the Acadiana side. “It’s just become too difficult to pursue traditional funding,” Movassaghi says. “Tolls may be the best way to go. I think the political will is there for tolls, but it’s going to take someone from the Legislature or the administration to champion this.”





That “someone” could be Sen. Mike Michot, a Lafayette Republican. He’s pushing legislation this session to create a new political subdivision that would have the power to tax an eight-parish region, borrow money and sign into contracts with private companies. His Senate Bill 176 would rename the existing Lafayette Metropolitan Expressway Commission and turn it into a new 15-member commission. The resulting Energy Corridor Commission would include Iberia, Lafayette, Lafourche, St. Charles, St. Martin, St. Mary, Terrebonne, and Vermilion parishes.

Michot’s legislation is overly broad in how the proposed commission would disburse money, and it states that the commission would be allowed to direct tax dollars to “any economic development project” in the eight parish region. Specifically, an economic development project in the bill “is defined as, without limitation, any and all projects suitable to any industry determined by the” proposed commission, including but not limited to industrial, manufacturing, housing, retail, hotels, amusements parks, transportation and health care. 

Largely, however, the legislation is being promoted as a regional tool to further projects like Lafourche’s La. 1 South and Acadiana’s I-49 South. As the economy faces tougher times, Michot said the commission could offer alternative funding solutions like tolls and taxing districts in the commercial areas of U.S. 90.

Actually, Michot says that it was the concept of tolls that prompted him and Movassaghi to suggest an overhauled commission. “We recognize that I-49’s price tag is out of the reach of the federal government and way out of the reach of state government,” he says.

The legislation, which would take effect Aug. 15, calls for one commission member each to be appointed by the:


• Lafayette Economic Development Authority

• Greater Lafayette Chamber of Commerce

• University of Louisiana at Lafayette

• President of Lafayette Consolidated Government

• Secretary of the Louisiana Department of Transportation and Development

• Mayors of the incorporated areas of Lafayette Parish, other than the city of Lafayette

• LA-1 Coalition, a nonprofit transportation group in Lafourche Parish 

• Parish president or mayor-president of each of the eight parishes



Michot says it could be a force to be reckoned with — a regional force that could change the way future sessions dole money out to I-49 South. “This brings all of the stakeholders together from along the route,” he says. “It’s something we’re all excited about.”

While there are a number of worthy measures being debated in the regular session, it’s important to remember that they will all face tough opposition — and it’s just not the budget they have to contend with. There are legislative packages to stiffen laws pertaining to drunken drivers and sex offenders; a renewed push to increase the homestead exemption and create tax-exempt holidays; and a slew of constitutional measures including one that could lead to a full-fledged constitutional convention. 

For some, like UL, local farmers and I-49 supporters, this is an opportunity to sit back, reorganize a bit and plan for the future. For instance, Acadiana lawmakers like Rep. Page Cortez, a Lafayette Republican, are in negotiations with north Louisiana legislators to file a bill that would seek to split any money for I-49 along the lines of a formula for the north and south. “And you also play a lot of defense and try to gain ground in other areas,” says Rep. Joel Robideaux of Lafayette, an independent.

Robideaux says when the Legislature adjourned its 2008 regular session, very few lawmakers, if any, knew Louisiana would be facing a $1.3 billion shortfall today. That’s why this time around, you may see lawmakers being more cautious, seeking advice from old pros like Movassaghi and looking closer down the line, than further out. “This is going to be a very contentious session,” Robideaux says. “Everyone is going to be approaching this one with the next two or three years in mind and thinking about how the immediate future will be impacted by our decisions.”




Damage Assessment


Even though the regular session doesn’t end for another two months, there are already victories and defeats for Acadiana’s business community.

If you think Kam Movassaghi is hopping mad, then you should get a load of UL President Joseph Savoie these days. The Jindal administration has asked Savoie to cut UL’s budget by $13.7 million, the largest proposed reduction in the eight-campus University of Louisiana System. In response, Savoie immediately created task forces — a beefed-up summer school program is but one offspring. 

Like Movassaghi, Savoie cut his political teeth in state government as commissioner of higher education under Foster and former Gov. Kathleen Blanco. And in kind, he’s come out swinging, too. Savoie is lobbying the business community and arguing that UL attracts roughly $50 million in external research funding each year ­— money that would evaporate under Jindal’s proposal.

Savoie doesn’t have to work too hard to make his point. The University Research Park, for instance, employs more than 400 people and boasts a payroll that exceeds $26 million. In terms of economic development centers, UL is uniquely positioned since it houses both the Manufacturing Extension Partnership of Louisiana and Procurement Technical Assistance Center.

Just consider the hard number: UL employs nearly 2,100 people and accommodates 16,000 students each year. Since 1900, the university has awarded more than 100,000 degrees; those handed out over the past decade have contributed about $1.3 billion to Louisiana’s economy, according to a UL-sponsored study.

Savoie calls UL a “city within a city” that’s vital to Acadiana. “Just through its day-to-day operations, it keeps large amounts of money moving, and that flow of currency is essential for a healthy economy,” he says. “If it were a private business, it would be the largest private employer in Lafayette Parish. If UL Lafayette were a city, it would rank as the 17th largest in Louisiana.”

On the lighter side of things, Jindal is also requesting that $98.4 million from last year’s surplus be used to fund construction and improvement projects at Louisiana’s two-year and four-year higher education institutions. For UL, that means $11 million for the construction of its Early Childhood Developmental Center and renovations to Girard and Burke Hawthorne halls.

Likewise in line for a sizeable fiscal injection is LSU-Eunice. It’s slated to receive more than $12 million to fund a new two-story facility that will contain lecture halls, auditoriums, tech labs, classrooms, faculty offices and other academic space.

Sen. Nick Gautreaux, a Democrat from Abbeville, says LSU-Eunice is experiencing its fourth consecutive semester of record growth and needs the room for, among other reasons, a booming nursing program. “It will also open up new opportunities for adult evening classes and community enrichment programs as the university teams up with St. Landry Parish tourism officials to make Eunice a retirement and ‘re-hirement’ community,” Gautreaux says. 





AGRICULTURE

While local colleges have been handed somewhat of a mixed bag, you’d be hard-pressed to find any silver lining at all around the fiscal cloud dampening the spirits of local farmers. Agriculture and Forestry Commissioner Mike Strain says his budget has been reduced by nearly $8 million so far this year, and 25 positions have been slashed. In addition to these job eliminations, Strain says LDAF suspended the nuisance animal trapping programs, consolidated the critical wildfire fire-fighting aircraft fleet and closed several laboratories.

Adding insult to injury, lawmakers will consider another $15 million in cuts during the upcoming regular session. “The LDAF can’t absorb that kind of a reduction in operation funds,” Strain says. “A cut like that will result in the elimination of more than 230 jobs, including 75 firefighters and more than 20 inspectors for seed, fertilizer and pesticides.”

Many lawmakers — or at least enough to matter — are in his corner. Members of the Rural Caucus and Acadiana Delegation are standing with Strain and those groups make up more than 75 percent of the legislative membership, creating quite a hurdle for Jindal’s budget priorities. “You can’t drive from Monroe down to Jeanerette without seeing an area that’s touched by the Department of Agriculture and Forestry and the LSU AgCenter,” says Rep. Harold Ritchie, a Democrat from Bogalusa. “I think it’s just unacceptable that we have these folks taking these cuts and we need to get behind them.”

As for aquaculture crops, Rep. Fred Mills, a Democrat from Parks, has filed legislation to create a public information campaign to warn people of the dangers of consuming Chinese seafood products. While it’s as much a measure to bolster the domestic crawfish industry as anything else, Mills’ House Bill 551 does address some well-known health risks associated with consuming these products, even if it is deemed safe by the seafood inspection program.

Retailers and any other person who sells Chinese seafood would be required to label the product with the following warning, under the legislation: “This product contains Chinese seafood and has passed all current government standards for its sale in the state of Louisiana. However, Chinese seafood products have been reported to contain substances which may be carcinogenic. The consumption of Chinese seafood may be hazardous to your health.”

Mills says some people might take his bill lightly, but it’s an extremely important issue that can seriously and detrimentally affect everyone’s health. “What the public may not know is that every shipment of foreign produced food products is not routinely inspected by the Food and Drug Administration due to the large volume that is imported,” he says. “Overall, less than 1 percent of imported food is inspected.”





ENERGY

While Jindal has been firm about opposing any tax increases for the session, he hasn’t taken a stance on how he will handle incentives and breaks, which would likely create more debt for the state. But on the other hand, some of those proposals could mark Louisiana’s official transition — at least a start — to being green. Among the proposals are tax credits for businesses to incorporate wind or solar energy (House Bill 32); programs for compressed natural gas vehicles (House Bill 110); and incentives for reducing carbon-dioxide emissions by later using the CO2 in oil exploration (Senate Bill 10).

Bills hoping to reverse the downward trend in permitting, lease sales and drilling statistics are also on tap. Rep. Gary Smith, a Norco Democrat, is pushing a new set of credits that producers could use against their income or corporate franchise tax liabilities. His House Bill 217 would apply to expenses incurred on practically any oil or gas drilling inside the state, whether on land or water.

It’s also retroactive to a point, meaning the credits could be applied to any drilling that has taken place since Jan. 1 of this year. The legislation states directly that the credits are meant to “promote oil and gas drilling in Louisiana.” Under the proposal, producers would be allowed to claim 25 percent of the costs resulting from the particular project, which would be reviewed by the Department of Natural Resources.

Rep. Henry Burns, a Republican from Haughton, likewise has House Bill 159 to extend the validity of drilling permits. Under current law, when oilmen and independent producers secure a permit from the state’s Office of Conservation, they are only allowed to drill for 180 days. Once that deadline passes, the permit must be renewed if the party wants to continue with its exploration activities.

However, if the Legislature adopts Burns’ bill, drilling would be allowed for an entire year. While DNR would lose some money under the proposal ­— that amount is unknown — Burns said he believes it will balance out against the decrease in workload the department would experience from the drop in permit renewals.




LOCAL IN NATURE … and filed by Lafayette lawmakers for the upcoming regular session that begins April 27:


House Bill 182 by Rep. Joel Robideaux, a Lafayette independent, authorizes Lafayette City-Parish Consolidated Government and City of Lafayette to seize private land needed for the “Kaliste Saloom Road Widening Project.”

Senate Bill 38 by Sen. Mike Michot, a Lafayette Republican, increases the membership of the Louisiana Immersive Technologies Enterprise Board of Commissioners from five to seven.

Senate Bill 79 by Michot allows the Cajundome to dip into the Lafayette Parish Visitor Enterprise Fund for planning, development, capital improvements and operating expenditures.

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