BATON ROUGE, La. (AP) — When Bobby Jindal exited the governor's office, he left behind a string of IOUs for his economic development deals, at least $155 million of which could come due during the next four years of Gov. John Bel Edwards' term.
Jindal made commitments for incentive payments and construction projects tied to various business deals, without providing money to cover those long-term costs. Instead, Edwards inherited a budget awash in gaps and depleted savings accounts — on top of the obligations to which his predecessor committed the state.
USUAL DEALS, BUT UNUSUAL TIME
Governors regularly make commitments to companies beyond their terms, leaving their successors to pick up the remaining tab. But Jindal's obligations come as Edwards, a Democrat who took office last week, grapples with the state's deepest financial crisis in nearly 30 years.
In the upcoming 2016-17 budget year, the Edwards administration will owe an estimated $50 million to companies from Jindal's economic development deals, about $11 million from the state construction budget and another $39 million in direct cash from the general fund.
That doesn't count spending from any tax break programs through which companies in Louisiana can lessen what they owe the state.
"Obviously, there have been commitments made that take a huge chunk of general fund dollars to satisfy," said Edwards' chief financial adviser, Commissioner of Administration Jay Dardenne. "We're going to satisfy contractual obligations that we have to."
RETURN ON INVESTMENT
Jindal invested a strong focus on drawing business to Louisiana, and he announced a string of projects over his eight years in office. The Republican counted among his biggest achievements $62 billion in economic development wins estimated to create tens of thousands of jobs.
Those deals are estimated to cost more than $344 million in incentive and construction payments for Jindal's successors, with commitments that run until 2030, according to data provided to The Associated Press shortly before Jindal left office.
"These commitments are leveraging far greater investments in facilities, capital spending, business purchases, and job creation throughout the state," Gary Perilloux, a spokesman for Louisiana Economic Development, said in a statement when he provided the data.
Perilloux said the spending may not all be owed, depending on whether companies meet their agreed-upon investment and payroll requirements. Dardenne said the Edwards administration will closely monitor the deals to make sure companies follow required performance standards.
"If they don't meet the benchmarks, we're not going to pay the money. And that will be the case with a number of them probably," Dardenne said.
WHO'S GETTING THE MONEY
Among nearly three dozen projects on the list, Louisiana is estimated to owe $4.5 million in the upcoming budget year to Viking Cruises, part of a deal to draw the company to New Orleans for a homeport. The Jindal administration estimated the deal would create more than 400 direct jobs, with operations slated to launch in 2017.
More than $5.5 million is due to Benteler Steel and Tube next year. The company started operating a steel tube mill at the port in Shreveport and plans to add a second mill, a total estimated $975 million investment. Both projects were expected to create 675 direct jobs. Louisiana will owe the company $5.5 million annually for the next four budget years.
Other dollars are owed to computer giant IBM, video game company EA Sports, Bell Helicopter, Smoothie King and other companies that have expanded, located or promised new projects and jobs in Louisiana.