Archive for the ‘Exemptions, Incentives’ Category

“They’re still negotiating with the terrorists.”

That gem, said in a private email to LouisianaVoice, came from a blogger who is relative new on the scene but who is very perceptive about what the Bobby administration is trying to do to higher education. https://lahigheredconfessions.wordpress.com/2015/02/27/open-letter-to-higher-education-leaders-the-time-for-negotiating-is-over/

A two-page letter today (Feb. 26) from five higher education leaders lobbed fluffy white marshmallows at Gov. Bobby and an anticipated $400 million (or more) cut to the state’s public colleges and universities. Joint Higher Education Letter 2-26-15

The letter was signed by LSU President F. King Alexander, Southern University System President Ronald Mason, Jr., Louisiana Community & Technical College System President Monty Sullivan, University of Louisiana System President Sandra K. Woodley, and Commissioner of Higher Education Joseph Rallo.

Rather than digging their collective heels in and shouting “Enough!” the higher education officials attempted to appeal to Gov. Bobby’s well concealed humanitarian instincts which has about as much chance as the proverbial snowball.

The letter comes about as close as possible to the prediction of one of our readers who said the college presidents in the end would thank Gov. Bobby for not cutting them more.

The letter began, predictably, with the education officials thanking Gov. Bobby “for your support during last year’s legislative session and the creation of the Workforce and Innovation for a Stronger Economy (WISE) Fund,” calling it an “unprecedented statewide collaboration across higher education.”

The pandering continued when the letter practically pleaded with Gov. Bobby to not lose “the momentum that began last year to raise the level of educational attainment in Louisiana.”

Have these educational leaders lost their collective minds? Have they forgotten that this governor’s policies of lavishing tax exemptions and incentives on corporations like Wal-Mart, chicken plucking plants and other corporations that offer little in the way of gainful employment are directly responsible for the fiscal mess we find ourselves in today?

And while Gov. Bobby did eventually support the move, it was the legislature that repealed the Stelly Plan, one of the most progressive tax programs in the history of this state, so we’re not giving lawmakers a pass on this.

“The need for college graduates, particularly in high demand fields such as engineering, computer science, business and industrial trades, is fundamental to meeting workforce goals and ensuring Louisiana graduates are prepared to reap the economic benefits Louisiana has realized,” the shameless communication said.

“Economic benefits Louisiana has realized”? Give us a freaking break! The only economic benefits realized by this state has been realized by Gov. Bobby’s campaign contributors. Why don’t these higher education officials just go on and kiss Gov. Bobby’s ring (yeah, we cleaned that up) and get it over with?

“Commissioner (of Administration) Kristy Nichols has informed us of the impending budget shortfall and the funding impacts on higher education,” the letter continued. “We want to partner with you and our legislative leaders to craft both a short-term approach to address the immediate budget shortfall and offer long-term recommendations that fundamentally change the higher education funding model. In both instances, budget stability is the overarching goal,” it said.

First of all, the use of the word “partner” scares the hell out of us. The last time “partner” was used by this administration, it gave away an entire system of public hospitals that resulted in such an overbearing spillover to Baton Rouge General Mid-City that it is closing its emergency room, thus making it even more difficult for the poor in north Baton Rouge to obtain needed medical care.

“In the long term, higher education is requesting budget stability and increasing state supported investments in higher education,” the letter said.

“The economic stability of Louisiana hinges on our collective ability to find both a short-term solution in the budget for next year and a long-term solution to sustain and increase investments in Louisiana’s higher education system.”

If the economic stability of Louisiana hinges on the ability of this administration, we’re in for a long, hard winter of economic—and intellectual—instability.

In addition to sending the letter to Gov. Bobby, copies also were sent to Gov. Bobby’s various lap dogs in the House and Senate where it will be promptly ignored as legislators turn their attention to getting re-elected while dealing with a $1.6 billion distraction.

To paraphrase H. Ross Perot, “That giant sucking sound you hear is Louisiana college-bound students headed out of state.”

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Well, at least Bobby took a stand. Sort of.

As an aside, we have arbitrarily decided to cease referring to Bobby Jindal by his elected title of governor. His behavior far more closely resembles that of his adolescent namesake from The Brady Bunch sitcom than a political leader. So we’ll just refer to him as Bobby from now on.

He repeatedly told us his big lie: that he had the job he wanted, yet he doggedly pursues a much higher prize—that of president. He long ago abdicated any of the responsibilities that go with that title—like performing his duties with the best interest of his constituents as a top priority.

Those duties would include seeing to fiscal well-being of the state. His persistent refusal to seek additional revenue to meet repeated shortfalls in the state budget have created a projected $1.6 billion budget hole for the 2015-2016 fiscal year. To address the problem, he is proposing yet another cut to health care and higher education—cuts that are certain to gut entire academic programs but almost certainly not athletics.

His giving away the state treasury in the form of corporate and industrial tax incentives have not paid off with desperately needed revenue. Quite the reverse has happened as companies have received five-year Enterprise Zone tax credits for locating Wal-Mart stores in affluent areas in open contravention of the EZ program’s intent.

Ten-year property tax exemptions have been granted in wholesale numbers to companies as they implement plant expansions but create no new jobs.

Movie tax credits return about 30 cents to the state for every dollar given in credits, certainly no bargain for Louisiana taxpayers.

There are others, like employee salary rebates and inventory tax rebates, all of which add up to billions of dollars deprived of the state treasury.

The health care of all citizens is another area of considerable responsibility that he has chosen to betray. Bobby’s decision to close Southeast Louisiana Hospital shut off mental health services to low income residents of the state’s most densely populated area. Then he privatized the state’s charity hospitals, a move which resulted in nothing short of personal and financial disaster. Baton Rouge Medical Center Mid-City is closing its emergency room next month because of the overflow from the closure of Earl K. Long Medical Center which will now place an additional strain on Our Lady of the Lake across town.

But while he has been chasing Islamics in Europe and chasing the presidency at home (using the term “home” loosely, as his base now appears to be somewhere in Iowa), Jindal has finally taken a stand in Louisiana, for Louisianans. Sort of.

Earlier this month, he took our collective breath away with his courage in saying he has “no reservations about whether or not it is a good idea and desirable for all children to be vaccinated.”

His courageous stand came out of growing concern over a measles outbreak at Disneyland in California because apparently one or more families who don’t believe in the measles vaccinations took infected children to the park, spreading the disease. A debate immediately followed as to the advisability of immunization because of belief in some quarters that the measles shots can cause more harm than good.

“There is a lot of fear mongering out there on this,” Bobby said, apparently referring to immunization rather than Islamic “no-go” zones in Europe. “I think it is irresponsible for leaders to undermine the public’s confidence in vaccinations that have been tested and proven to protect public health. Science supports them and they keep our children safe from potentially deadly but preventable diseases. Vaccinations are important. I urge every parent to get them. Every one.”

Again, let us stress that he also said “all children.”

But let us now flash back nearly two years to Feb. 22, 2013, when Bobby, acting for a change as governor, submitted his executive budget.

His proposed budget included his announced intentions to cease immunizing the state’s indigent children at parish health units throughout the state.

Instead, he said, private pediatricians would take over the duties of immunizing children under the state’s Vaccines for Children (VFC) program through which vaccines are made available at no charge to enrolled public and private health care providers for eligible children.

“Under the proposed restructuring, children who received immunizations at parish health units would be transitioned to receive immunizations by their private pediatricians or health care providers, where 92 percent of children already receive their immunizations through the program,” said a statement released by the Department of Health and Hospitals at the time.

Bobby’s most recent proclamation in support of immunization seemed more of an effort to set himself apart from the GOP frontrunners than any real concern for the welfare of Louisiana children. After New Jersey Gov. Chris Christie and U.S. Sen. Rand Paul of Kentucky questioned the wisdom of mandated immunization, Bobby’s utterance seemed contrived, almost comical.

But it wasn’t funny. In fact, given the state of critical mass into which the state’s finances have fallen, nothing Bobby does is funny anymore.

The national media have finally caught on with several extremely critical analyses of Bobby’s performance just in the last few days, a couple by usually conservative columnists.

Bobby, we aren’t really all that stupid down here. We well remember glib line of yours: “I have the job I want.” Seriously? You repeated it ad nauseam during your first term. We got sick of hearing it because we knew you were lying.

You lying to us, weren’t you, or do you really have the job you want?

If you were telling us the truth, then for God’s sake stay in Louisiana and do your damned job. If not, get the hell out and let someone who cares do it for you.

Resign, Bobby. Just resign. You quit a long time ago so now just make if official. We’ve grown weary of your adolescent Bobby Brady adventures. Like the sitcom itself, your act has grown stale.


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State Rep. Jerome “Dee” Richard (I-Thibodaux) has revealed an ambitious set of bills he will be pre-filing preparatory to the 2015 legislative session, a couple or which are almost certain to be vetoed by Gov. Bobby Jindal should they survive both chambers intact.

The 60-day 2015 session convenes at noon on April 13 and will adjourn at 6 p.m. on June 11.

Vetoes are nothing new to Richard and in fact, one of his bills rejected by Jindal last years in hindsight represents a moral victory for Richard and something of an embarrassment for Jindal.

House Bill 142 (HB-142) passed both the House and Senate unanimously last year and was vetoed by Jindal only to see Jindal find it necessary to implement at least part of the bill through an executive order last month.

Passing 84-0 in the House (with 20 members not voting) and 37-0 in the Senate (with two not voting), HB-142 would have provided for a 10 percent reduction of all state professional, personal and consulting service contracts. The bill further provided that the savings from the cuts be deposited into the Higher Education Financing Fund.

State Treasurer John Kennedy, Richard was quick to point out, has been recommending slashing state contracts for several years and has been all but ignored by the administration but now even Jindal has ordered that state contracts be cut but not so higher education could be funded but instead to attempt to plug the growing chasm that is the state budget deficit.

Jindal, for his part, says he will offer legislators “suggested solutions” to ease the budget crisis which now is projecting a deficit of $1.6 million. http://theadvocate.com/sports/preps/11454861-123/jindal-says-hell-suggest-options

First of all, wasn’t that why he hired Alvarez and Marsal (A&M) Consulting for a cool $7 million? We were under the impression that A&M was going to find all these wonderful ways for the state to save money.

Second, the governor is the state’s CEO and as such, is charged with the leadership of the state. After all, Gov. Kathleen Blanco came under withering criticism for the manner in which she handled the crisis of Katrina. Jindal appears no less befuddled and clueless in his approach to the state’s budgetary crisis and now, after seven years of telling lawmakers what he wanted done, he punts to them.

Of course, it’s difficult to fight Islam in Europe, run for president and hold prayer meetings that fail miserably in filling all the seats in the venue while governing the state.

Only yesterday (Monday, Feb. 2), Kennedy broke the news that Moody’s Investors Service had issued a warning that reductions in revenue estimates by the Revenue Estimating Conference constituted a “credit negative for the state” and that the ratings service may downgrade the state’s credit outlook from stable to negative.


Kennedy said the next procedural step would be a rating downgrade that would make it more difficult for the state borrow money and cost the state higher interest for money it does borrow.

And lest Jindal attempt to blame the latest fiscal woes on the drop in oil prices, Moody’s pointedly noted that the state’s problems pre-date the fall in oil prices—by several years. “As the U.S. economy picked up steam,” the Moody’s analysis said, “Louisiana had muted job growth even before the oil price decline.”

“This is what happens when you spend more than you take in,” Kennedy said. “Moody’s is telling us that we’d better get our fiscal house in order or we are going to be downgraded, which will cost taxpayers dearly in higher interest rates on our bonded indebtedness.”

The Moody’s news comes on top of earlier reports that health care and higher education will probably suffer even deeper cuts than the $180 million in reductions made over the past two months. The state’s colleges and universities have been told to expect at least $300 million in further budget cuts during the next fiscal year even as the Department of Health and Hospitals is expected to have $250 million slashed from its budget.

Jindal has even had to renege on his pledge last year to create a $40 million incentive fund to pay for college programs that provide graduates for high-demand jobs in Louisiana. Once considered one of his highest priorities, he has yanked that money away before the ink was dry on the bill that created the program.

All this has had a cumulative effect leading up to what promises to be a tumultuous legislative session as lawmakers grope for ways to keep from cutting services while at the same time being able to keep the lights on.

One trial balloon, already rejected by Jindal, would be for the state to roll back some of the billions of dollars in corporate and industrial tax breaks but Richard is not ready to accept the governor’s dismissal of that idea just yet.

This year, Richard has an agenda even more ambitious than his across-the-board 10 percent cut in contracts last year. Remember, that bill, HB-142 was passed unanimously in each chamber but vetoed by Jindal because, the governor said, the bill “could hinder the state’s efforts to continue to provide its citizens with timely, high quality services.”

In hindsight, however, it would appear his signing that bill into law would not have hindered the delivery of services nearly so much as not having the funds to pay for the services in the first place. The only thing not hindered by his veto was uninterrupted payments to the contractors.

Among Richard’s bills to “re-establish the legislative branch of government” are bills:

  • For an automatic veto session. Currently, legislators are mailed forms to complete and return indicating whether or not they want to hold a special session to consider overriding the governor’s veto(es). “If a bill passes with a two-thirds vote or better and the governor vetoes it, there would be an automatic veto session convened and legislators wouldn’t have to vote for it,” he said.
  • To eliminate the line item veto. “This will be a hard row to hoe,” Richard admitted. “But the governor has always held the line item veto over legislators’ heads as a means of getting what he wanted. This bill would change that.” Former President Bill Clinton pushed through a bill giving him the line item veto during his administration but the U.S. Supreme Court ruled that law unconstitutional.
  • To establish a capital outlay oversight committee. “We need to eliminate all NGOs,” he said, referring to the tradition of the legislature appropriating funds for NGOs, or non-government organizations such as baseball parks, golf courses, local court houses, city halls, councils on aging, etc. “These should be financed at the local level. If the local people want these things, they will pass bond issues to pay for them. That should not be the responsibility of the legislature. Before we look at raising more revenue, we need to cut spending,” he said. “John Kennedy has said many times that we don’t have a revenue problem, we have a spending problem, and he’s correct.”
  • To change the makeup of the House Appropriations Committee. “Appropriations has 27 members. That’s way too many,” he said. Richard said he would like to see it reduced in size to 15 members with three members from each of the five Public Service Districts in the state. “That would guarantee representation from each area of the state,” he said.
  • To eliminate the Homestead Exemption. “We need to get rid of all tax exemptions,” he said. “We give away $2 billion a year in industrial and corporate tax exemptions.”

Richard said he knows his bills will be fought by special interests and by the governor. “But Jindal has done nothing in seven years,” he said. “It’s time the Legislature re-asserted itself as an equal partner in governing this state.”

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One of Gov. Bobby Jindal’s favorite activities (second only to trips to Iowa and New Hampshire) appears to be his now-routine exercise of mid-year budget cuts and hiring freezes.

But like any deft politician, he leaves himself wiggle room.

Lots of wiggle room.

On Jan. 15, 2014, Jindal, in reaction to the state’s worsening fiscal condition, issued an executive order for a “limited hiring freeze” that extended to some 40 state agencies. That order stipulated that no agency use employee transfers, promotions, reallocations or the creation of new positions in such a manner as to exceed a ceiling imposed by the commissioner of administration. JANUARY HIRING FREEZE

As state finances continued to deteriorate, Jindal followed up with a statewide expenditure freeze on April 14. While that order imposed statewide cuts, it listed enough exemptions and exceptions as to render it practically meaningless—except for higher education and healthcare expenditures not covered by federal funding. As has always been the case, those were not spared. APRIL EXPENDITURE FREEZE

The order continued a trend that has come to define the Jindal administration: extensive mid-year cuts.

Then, on Nov. 7, Jindal issued his first executive order of the 2014-2015 fiscal year that began on July 1 for another statewide expenditure freeze. Again, the main areas cut were higher education and health care, though as with the April order, other agencies felt at least some of the effects. Theoretically at least, the only exceptions were essential services and federally funded programs. NOVEMBER EXPENDITURE FREEZE

Now, Jindal is at it again. On Dec. 18, he issued yet another executive order, the fourth of the calendar year and the second this fiscal year. This one called for expenditure reductions totaling $153 million and authorizing Commissioner of Administration Kristy Nichols to impose an additional $17.4 million in cuts for total cuts of $170.4 million.


Among the latest cuts ordered by Jindal included:

  • Higher Education: $4.9 million;
  • Department of Education: $6.77 million;
  • Corrections: $336,780;
  • Division of Administration: $3.5 million;
  • Veterans Affairs: $240,000;
  • Office of Juvenile Justice: $1.98 million;
  • Office of the Department of Health and Hospitals (DHH): $131.8 million (includes $127.44 million in cuts to medical vendors, $2.64 million to medical vendor administration, and $308,213 in cuts to the Office of Citizens with Developmental Disabilities);
  • Office of Children and Family Services: $964,980;
  • Department of Natural Resources: $1.29 million;
  • Department of Economic Development: $1.4 million.

One of the more interesting sidebars to this entire scenario is that with the latest executive order, DOA gave some agencies only eight working days in which to provide a myriad of information, including lists of all contractors and amounts paid on the contracts.

DOA has consistently taken weeks and sometimes months in which to comply with similar requests by LouisianaVoice, a point which will be raised in any future litigation by LouisianaVoice. We will, in all probability, cite that long-standing legal precedent Goose v. Gander in our legal arguments.

We mentioned at the beginning of this post that Jindal has left himself a lot of room to maneuver around his own dictates and we had little problem in finding good examples.

In early November, only hours before that Nov. 7 hiring freeze for example, the Office of Group Benefits (OGB) brought two six-figure appointees over from Blue Cross and Blue Shield of Louisiana to assist OGB Chief Executive Officer Susan West in handling an agency that appeared to be spinning out of her control.

West makes $170,000 a year as CEO but the governor’s office somehow saw fit to pay Thomas Groves $220,000 a year as Assistant Commissioner and Elise Cazes $106,512 as Group Benefits Administrator.

And now we learn that OGB is still hiring long after that hiring freeze took effect last month.

The Office of Civil Service will close applications on Friday (Dec. 26) for the position of Group Benefits Director (what that entails). The salary range for that position is between $50,900 and $107,000, according to the Civil Service announcement.

That’s a pretty big spread and our bet is the new hire won’t be starting at the bottom of that scale.

It seems curious to us that OGB managed to survive—and even thrive, building a $500 million reserve fund balance—without all that added weight before the decision to fire former CEO Tommy Teague in April of 2011, lay off more than 100 personnel, to privatize the agency and in the process, manage to lose half of that $500 million reserve fund.

Not satisfied with increasing the number of administrative positions at OGB, the administration is currently advertising for a Chief Legal Officer for OGB, according to listings provided by Civil Service.

And then there is the case of Chance McNeely who, since last march has served as a $65,000-a-year policy analyst for the Governor’s office but more recently was appointed as Assistant Secretary for Environmental Compliance at the Department of Environmental Quality at an as yet undisclosed salary.

Three things stand out about the McNeely appointment. First, with Jindal’s term of office winding down to just over a year left, McNeely need a nice cozy spot to land in a classified (read: protected) position.

Second, the creation of that position would seem to violate Jindal’s own directive of last April that “no agency use employee transfers, promotions, reallocations or the creation of new positions in such a manner as to exceed a ceiling” imposed by the administration. Jindal and Nichols would argue that that caveat applied to the previous fiscal year, not 2014-2015 and technically, they would be correct. But the state’s financial condition is even worse than last year, so one might reasonably assume that prohibition should have been carried forward into the new fiscal year. But when it adheres to the wishes of Jindal, the rules apparently do not apply. After all, it was in a Division of Administration staff meeting a couple of years ago that the directive was given to staffers to not let the law stand in the way of the administration’s wishes.

And third, since when does Jindal care about the environment anyway? Remember that Jindal himself described climate change advocates as “science deniers.”

Curious indeed for a governor obsessed with reducing the size of government.

But, as those cheesy TV commercials say, there’s more. We also have the Department of Education.

Since January of 2014, DOE has chalked up 300 new hires—190 full time and 110 part time—at a combined salary of more than $9.6 million, or an average yearly salary of $50,857, including part timers.

The Recovery School District (RSD), which has experienced a string of critical state audits, had 93 of those 190 new full time hires at a combined salary of $4.1 million.

DOE hired 50 part time employees at $500 per week or more (a combined salary of $2 million per year) and 16 of those part timers, all employed by RSD, were hired at $1,000 per week or more. One of those, guidance counselor Nancye Ann Verlander, was hired at a part time salary of $3,000 per week ($156,000 per year), according to records provided by Civil Service.

Two others, Kathryn Elichman and Kenneth Elichman, were hired as part time administrators at $1,600 and $1,150 per week ($83,200 and $59,800 per year, respectively), records show, and a part time school nurse receives $72,800 per year.

Meanwhile, Jindal travels the country visiting fairs and community groups in Iowa and New Hampshire and grabbing network TV face time at every opportunity to proclaim how he has delivered a balanced state budget, reduced the size of government, lowered taxes, and turned Louisiana into a utopia for its four million citizens.

Those citizens, however, somehow continue to see Louisiana turn up near the bottom of surveys of all things good and at the top of all things bad.

Such is the surrealistic world of budget cuts and hiring freezes in the administration of Gov. Bobby Jindal.


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If ever there was an appropriate analogy to the old expression rearranging the deck chairs on the Titanic, Gov. Bobby Jindal’s methods of dealing with successive years of budgetary shortfalls (read: deficits) would have to be it.

The Louisiana Public Service Commission (PSC) now has openly defied him (each member, even down to former Jindal cabinet appointee Scott Angelle) on his order for the commission to render unto Caesar Jindal 13 PSC vehicles to be included with about 700 other vehicles to be auctioned early next year in an effort to raise some $1.4 million ($2,000 per vehicle).

That is significant because unless we missed something somewhere along the way, that is the very first time any state agency, the legislature included, has stood up to this little bantam rooster. Tommy Teague did and was fired but the agency he headed, the Office of Group Benefits, went quietly to the slaughter like so many sheep.

Legislators, fearing capital outlay cuts in their districts or demotion from plum committee assignments, have likewise been strangely quiet as a group with only the occasional individual protests.

That move of selling off vehicles is more like the analogy of robbing your kid’s piggy bank to meet the mortgage payment than any real solution to a much larger problem and raises the logical question: what will the administration do next to scrape together a few dollars?

And the news only gets worse for Jindal’s fading presidential aspirations (hopes that themselves are a joke because something that doesn’t exist already can’t very well fade.

Even more ominous than ripping vehicles from state agencies, is the looming certainty of more mid-year cuts and employee layoffs in the wake of growing budgetary ills. Those fortunate enough to avert the layoffs will see no merit increases for FY-16 and contract reductions are expected to continue—except for certain favored contractors favored by our transparent governor. No agency head in his right mind would cut funds for a contractor with a close Jindal connections (read: campaign contributions).

In the meantime, we will also be curious to see if any of those six-figure Jindal appointees are among those being laid off. You can most likely check that box “No.”

Jindal, of course (along with most legislators) has been blaming the state’s worsening fiscal condition on the precipitous drop in crude oil prices.

Not so, says long-time state government observer and chief curmudgeon and former legislative assistant C.B. Forgotston.

Here’s the way he explains it:

            If one merely looks the “spot” prices regularly reported in the media it seems like much bigger issue. It’s nothing like the “oil bust” of the 1980s. At that time a majority of the state revenues were from oil severance taxes. That is no longer the case.

            Additionally, the state’s severance tax revenues are based on the contract price, not the “spot” price that is regularly reported in the media. For example, some of the companies currently drilling in the Tuscaloosa Marine Shale have pre-sold their potential finds at $96 per barrel. That is the price on which the taxes will be paid. The consensus in the oil industry is the current downturn in oil prices is temporary. It may last 6 months or it may last a year; it is not a forever thing.

            Also reducing the impact on state revenues, as pointed out by Legislative Fiscal Office economist Greg Albrecht, low oil prices means savings for consumers. Their spending shifts to other items on which sales taxes are collected. For businesses, especially small businesses, it means more profit which means higher income taxes.

The major problem in the current budget and creating the $1.4B shortfall projected for next year’s budget is not a reduction in revenues, but overspending. Overall revenues have grown every year that Jindal has been governor. However, he and the legislators have consistently spent not only one-time revenues on recurring expenses, but imagined revenues under the guise of “efficiencies” which cannot be measured.

            Blaming oil prices is merely a scapegoat for passing fiscally-irresponsible budgets for the last 7 years.  Don’t let those responsible avoid the blame. It’s time to hold Jindal and the legislators’ feet to the fire by telling them to set better priorities based on real, as opposed to imagined, revenues and amorphous efficiencies.

They’ve got one more time to get it right in the 2015 Regular Session. If they don’t the first order of business for the new governor and new legislators in early 2016 will be to hold a special session to raise taxes and reduce services to balance the final Jindal budget.

And lest anyone might be foolish enough to write Forgotston off because he retired and no longer involved in day to day state matters, that would be a serious mistake. But even discounting Forgotston, we have Greg Albrecht, chief economist for the Legislative Fiscal Office, weighing in on the subject. And he is very much involved in the day to day operations of the state.

Albrecht takes a different tact in explaining how we got where we are. http://theadvocate.com/news/11102302-123/economist-greg-albrecht-louisiana-tax

Albrecht says that priorities for spending state revenue on such pesky items as education, infrastructure and social services are set only after we first dole out billions of dollars in tax credits, rebates and exemptions that place a terrific drain on state financial resources.

Here’s one that he didn’t mention but which we feel is worth pointing out: if the NFL awards a Super Bowl to New Orleans, Saints owner Tom Benson gets a cool million dollars from the state. That has already happened once since that condition was included in a generous incentive package negotiated to keep the Saints in New Orleans.

Another practice that has since terminated but which cost the state millions: when a visiting NFL team such as Atlanta, Tampa Bay, etc., played in New Orleans, every traveling member of that team—players, coaches, support personnel, etc.—was required to pay state income tax on 1/16th of his income. That individual, after all, received 1/16th of his salary in Louisiana. As soon as the Louisiana Department of Revenue received a check for those taxes, the state cut a check for an identical amount to Benson.

Albrecht said many of the tax breaks are “open-ended spending” and unappropriated. “It’s on autopilot” and the spending “is the priority” of state government because all other spending is secondary.

He said attempts to curtail the programs have run into resistance in the form of screams of protest from business interests who would be impacted. They consistently deflect talk of costs to the state by parroting the old line about the economic benefits of the programs designed to attract certain businesses or to assist certain segments of the citizenry.

But when Enterprise Zone exemptions are used to build Wal-Mart stores in affluent communities like St. Tammany Parish (where two have been built using the program), one must wonder at the benefits derived from a program designed to uplift pockets of high unemployment.

Companies pay about $500 million to local governments in property taxes on inventory that is considered property and the state simply reimburses those companies dollar for dollar. “We’re on the hook for whatever the local assessor puts down,” Albrecht said. http://www.thenewsstar.com/story/news/local/louisiana/2014/12/15/state-gives-away-billion-tax-breaks/20460681/

He said legislators have asked that he examine the various tax breaks for possible cutbacks and while Rep. Joel Robideaux (R-Lafayette), chairman of the House Ways and Means Committee which deals with taxes, feels legislation will be filed to alter some of the tax credits, he is realistic in the knowledge that any attempt to amend or eliminate the breaks could be vetoed by this corporate welfare-happy governor.

“The veto pen will determine what passes or not,” Robideaux said. “The question is, ‘Can we craft legislation that will avoid the veto pen?’”

Earlier this year, Sen. Jack Donahue (R-Mandeville) managed to get overwhelming passage of a bill that called for more oversight of the tax break programs by the state’s income-forecasting panel.

But Jindal, who never met a tax break he didn’t like, promptly vetoed the bill, saying it could effectively force a tax increase on businesses by limiting spending for the incentive programs.

You gotta give Jindal credit for creativity, though. Only he could twist the definition of removal of a tax break for business into a tax increase even while ignoring the fact that removal of those tax breaks could—and would—mean long-term relief for Louisiana citizens who are the ones shouldering the load. And for him to willingly ignore that fact borders on malfeasance.

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