BATON ROUGE, La. (AP) — Two-thirds of the state’s $414 million economic development “mega-fund” would be used on four projects, two of which don’t currently meet the criteria for receiving the dollars, under a Jindal administration proposal outlined Tuesday.
Although the fund regularly has been described as a way to attract new jobs to Louisiana, much of the money would instead pay to retain existing jobs in the state, if lawmakers agree.
The $259 million in spending plans would deplete much of a fund that some lawmakers had been eyeing to plug budget shortfalls.
The spending would cover projects with the Naval Support Activity base in New Orleans, NASA’s Michoud Assembly Center in New Orleans, a chicken processing plant in Farmerville and a Shaw Group manufacturing facility in Lake Charles. The projects include commitments from both Gov. Bobby Jindal and former Gov. Kathleen Blanco.
Commissioner of Administration Angele Davis, Jindal’s top budget adviser, described the mega-fund proposals in a legislative budget hearing.
The Legislature’s joint budget committee has to approve any spending from the economic development fund, but the full Legislature would have to change the statute governing the fund for two of the projects before they can receive mega-fund money.
When the fund was created during the Blanco administration, it was touted as a way to attract big-ticket manufacturing facilities to Louisiana. Jindal’s economic development secretary, Stephen Moret, said he’ll ask lawmakers to tap into the fund for:
—$125 million for the Federal City project in New Orleans, which will turn the Naval Support Activity base into a complex of military offices. The base avoided closure after city, state and federal leaders agreed to turn the installation into a center for military operations, including the Coast Guard office in New Orleans and Navy, Marine and Army units. Blanco committed the state to help cover the costs of the complex. Moret said it would retain 1,600 jobs and create 300 new ones.
—$55.5 million for NASA’s Michoud Assembly Center in New Orleans to help with the transition from the space shuttle program to the Constellation program, which is developing the next-generation vehicle and rockets to go to the moon and later to Mars. The state will pay for modifications to the facilities, construction of a new building and the purchase of new equipment. Moret didn’t have estimates on how many jobs would be retained or how many new jobs would be created. The Blanco administration made the initial commitment to the project.
—$50 million to help keep a chicken processing plant open in north Louisiana. Jindal agreed the state will cover half the Pilgrim’s Pride plant’s $80 million sale price to Foster Farms, along with another $10 million for improvements to the plant site. The move will save up to 1,300 jobs and the farms of an estimated 300 chicken producers.
—$28.5 million for a deal in which construction firm The Shaw Group Inc. will team with Westinghouse Electric Co. to build a new manufacturing plant in Lake Charles to make structural, piping and equipment modules for Westinghouse’s nuclear power plants.
Shaw officials said the plant will create 1,400 new jobs. As part of the deal, Shaw also agreed to remain headquartered in Baton Rouge and to add another 1,500 jobs at its headquarters. The mega-fund dollars would be part of a $210 million state tax incentive deal for the project.
Moret said changes in the law governing the mega-fund will be needed for the chicken plant and Shaw deals. But he said all the projects meet the spirit of the fund: helping to pay for large projects with a significant number of jobs and the state bringing in more tax dollars than it is paying.
The state hadn’t planned to pay for the Federal City or Michoud projects out of mega-fund dollars, but Moret said shrinking state revenue lowered how much new debt the state can incur, leaving fewer dollars for the projects.
Meanwhile, Davis said Louisiana was in the running for five other mega-fund projects.
“I don’t envision any scenario in which we won’t need the balance of the fund that is there,” Moret said.—-Contact The Daily Reveille news staff at [email protected]