Archive for the ‘Louisiana Purchase’ Category

Interspersed in all the venomous political rhetoric in the gubernatorial campaign that is now moving toward its merciful final week are some real issues that affect our lives and which should warrant closer inspection by the voting public.

Unfortunately, given the public’s taste for voyeurism and salacious gossip, that probably won’t happen. Besides, time is short and the sordid half-truths, distortions and details of political black ops are just heating up. There just isn’t time for the things that matter.

But at least one group is taking U.S. Sen. David Vitter to task for a letter he wrote last April to U.S. Army Corps of Engineers Commander Lt. Gen. Thomas Bostick and Assistant Secretary of the Army for Civil Works Jo-Ellen Darcy.

In that otherwise routine five-page letter, dated April 16, 2015, Vitter addressed a number of issues concerning levees, flood control, storm surge protection, past due payments from the Corps to the State of Louisiana for freshwater diversion projects, a request to complete the Southeast Louisiana Urban Flood Control Project (SELA) in Orleans, Jefferson and St. Tammany parishes, deauthorization of the West Pearl River Navigation Project, a request for increased negotiation efforts to approve the Lower Mississippi River Management proposal, and bank stabilization along the Ouachita River in north Louisiana.

Buried at the bottom of page three of the letter was item number 7: Helis Oil and Gas Permit MVN (Mississippi Valley New Orleans)-2013-02952-ETT.

Issue: “The aforementioned permit application is currently awaiting approval within MVN, but has stalled due to several pending lawsuits,” Vitter’s letter said. “The State of Louisiana, Department of Environmental Quality issued the water quality certification (WQC 140328-02) on March 19, 2015. Issuance of the 404 permit is the last remaining action needed to begin construction of the test well.”

Request: “Immediately approve and issue the 404 permit.”


In his April 16 letter, Vitter did what he does best: intimidate with not-so-subtle threats.

“As the U.S. Army Corps of Engineers moves forward with leadership transitions and promotions in the coming months, I’d like to take this opportunity to ensure that you—as the two primary Corps leaders—continue strengthening your commitment to improve communication and issue resolution with non-Federal stakeholders who depend on the Corps to provide necessary flood protection, reliable navigation, and restored ecosystems,” he wrote.

“…However, it’s critical that Corps leadership understand there remain several significant Louisiana issues that need to be addressed and resolved in an expeditious manner. In light of those issues, I can’t support the transition or promotion of new leadership until I know that a constructive approach will be taken to address and resolve these serious problems.”

As if on cue, the Corps on June 8 approved the permit application by Helis Oil & Gas Co. http://www.nola.com/environment/index.ssf/2015/06/wetlands_permit_approved_by_fr.html

Vanishing Earth, a new political blog that concentrates on environmental issues, obtained the Vitter letter to the Corps that contained Vitter’s heavy-handed approach to resolving issues, particularly the approval of the Helis permit.

That permit, since approved, will allow Helis to drill an exploratory well for the purpose of oil drilling and controversial hydraulic fracking in St. Tammany Parish. Parish residents have resisted fracking in St. Tammany and have even filed a lawsuit in district court to stop the practice there because of legitimate concerns about air and water pollution, damage to the aquifer that supplies drinking water, and the industrialization of the parish.

The irony is that St. Tammany is considered a strongly Republican parish and represents one of Vitters’ strongest areas of support.

But, as is always the case in politics, money speaks much louder than loyalty to constituents and Helis has seen to it that Vitter’s campaigns, both federal and more recently, state, are remembered fondly.

On May 8, less than a month after Vitter wrote his letter to the Corps, Helis made a $5,000 contribution to Vitter’s gubernatorial campaign. Additionally, on that same date, Helis CEO David Kerstein made an identical maximum allowable contribution of $5,000. Then, on Nov. 6 of this year, less than two weeks after the first primary, Helis chipped in an additional $5,000. The company also contributed $15,000 in three separate contributions to lieutenant governor candidate Billy Nungesser.



Moreover, Kerstein contributed an additional $7,500 to Vitter’s U.S. House and Senate campaigns from 2000 to 2008, according to Federal Election Commission records. Corporations are prohibited from contributing to federal campaign. http://docquery.fec.gov/cgi-bin/qind/


Helis apparently is not an equal opportunity donor; no contributions could be found by the company or its CEO to Democrats John Bel Edwards or Nungesser’s opponent Baton Rouge Mayor Kip Holden.

What David Vitter is essentially saying in his letter to Secretary Darcy and Lieutenant General Bostick is that if they do not perform certain acts, issue the permit, then he will punish them by taking away something of personal value to them which, in this case, are the “transitions and promotions,” wrote Vanishing Earth publisher Jonathan Henderson. “In other words, he blackmailed them.” http://vanishingearth.org/2015/11/05/senator-vitter-corruption-reaches-st-tammany-parish-fracking-fight/

Henderson is encouraging his readers to call on the U.S. Senate Select Committee on Ethics “to immediately investigate Senator David Bruce Vitter.”

Additionally, one source said some residents of St. Tammany were considering filing a complaint with the State Board of Ethics. LouisianaVoice inquired of the state board whether or not such a complaint had been filed. This was the response we received:

In response to your public records request of Nov. 12th, please be advised that all complaints and documents prepared or obtained in connection with an investigation are deemed confidential and privileged pursuant to R.S. 42:1141.4 K&L which also provides that it is a misdemeanor for any person, including the Board’s staff, to make any public statement or give out any information concerning any confidential matter.

LouisianaVoice has begun an investigation into fracking operations in Lincoln Parish as well. Residents there are concerned about the drain on the Sparta Aquifer which supplies drinking water to several north Louisiana parishes. We will bring you more details on those operations as we receive them.

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While Bobby Jindal is touting all the wonderful innovations, budget cuts, employee reductions, etc., that he has initiated in Louisiana, The Center for Public Integrity has a few items he may wish to soft peddle as he goes about trying to convince Iowans that he’s really serious about running for President and not the joke we in Louisiana know him to be.

The center has just released its 2015 integrity grades for each state and it isn’t very pretty for Louisiana.

In fact, the state received a flat-out grade of F and ranked 41st out of the 50 states overall with a composite score of 59 out of a possible 100. Only seven states had lower composite scores—Pennsylvania and Oregon (58), Nevada (57), Delaware and South Dakota (56), and Michigan and Wyoming (51).

Mississippi (61) and Alabama (67), normally found competing for Louisiana on lists of all things bad, were well ahead of Louisiana with rankings of 33rd and 7th, respectively. Alaska had the highest score at 71, good enough for a C. Michigan was the worst with its 51.

Louisiana wasn’t alone in getting a failing grade of course; there were 10 others but in the other states we can only assume the governors are at least attempting to address their problems. Jindal isn’t. He capitulated long ago as he set out on his quest for the brass ring that continues—and will continue—to elude him. Though he has only two months to go in office, he in reality abandoned us three years and 10 months ago—right after he was inaugurated for his second term. Truth be told, he has been at best a distracted administrator (I still can’t bring myself to call him a governor) for his full eight years and at worst, guilty of malfeasance in his dereliction of duty.

Harsh words, to be sure, but then his record screams out his shortcomings (loud enough to be heard in Iowa, one would think) and his lack of a basic understanding of running a lemonade stand, much less a state.

States were graded on 13 criteria by the Center for Public Integrity:

  • Public Access to Information—F
  • Political Financing—D
  • Electoral Oversight—D+
  • Executive Accountability—F
  • Legislative Accountability—F
  • Judicial Accountability—F
  • State Budget Processes—D+
  • State Civil Service Management—F
  • Procurement—D+
  • Internal Auditing—C+
  • Lobbying Disclosure—D
  • Ethics Enforcement Agencies—F
  • State Pension Fund Management—F


The scores given each of these, and their national ranking were even more revealing.

Public Access to Information, for example scored a dismal 30, ranking 46th in the country.

In the scoring for Internal Auditing, on the other hand, the state’s numerical score was 79, but was good enough for only a ranking of 32nd.

Likewise, the grading for Procurement (purchase of goods and contracts) had a numeric score of 69, good enough to rank the state 25th. But numeric score of 64 for Lobbying Disclosure while rating only a D, was still good enough to nudge the state into the upper half of the rankings at 24th.

One of the biggest areas of concern would have to be the state’s numeric grade of only 40 for Judicial Accountability, plunging the state to next to last at 49th. (This is an area that has flown under the radar but one the legislature and next governor should address.)

The lowest numeric score was 30 for Public Access to Information, fifth from the bottom at 46th. LouisianaVoice can certainly attest to the difficulty in obtaining public records, having found it necessary to file lawsuit against the state on three occasions in order to obtain what were clearly public records. Even after winning two of the three lawsuits, we still experience intolerable foot-dragging as agencies attempt to stall in the hopes we will give up.

We will not. If anything, the stalling only strengthens our resolve to fight for the public’s right to know.

To compare Louisiana to other states in each of the 13 criteria, go here: http://www.publicintegrity.org/2015/11/09/18822/how-does-your-state-rank-integrity

In the final days of the 2015 legislative session the state Senate approved a bill that removed the exemptions pushed through by Jindal in his first month in office in 2008 which kept most government records from disclosure. State Sen. Dan Claitor (R-Baton Rouge) was quoted in the report as saying, “It turns out we were boondoggled on that.”

Jindal called his changes his “gold standard,” but the report said it is “riddled with loopholes and cynical interpretations by the governor and other state officials.”

That looked like a promising reversal to the secrecy of the Jindal administration but then the legislature agreed to postpone implementation of the new law that abolished the abused “deliberative process” exception until after Jindal leaves office next January.

Jindal also managed to gut the state’s ethics laws early in his first year. Enforcement of ethics violations was removed from the State Ethics Board and transferred to judges selected by a Jindal appointee. That prompted long-time political consultant Elliott Stonecipher of Shreveport to say that while the state’s ethics laws looked good on the surface, there was “no effective enforcement and that breeds more than just a system of corruption, but an acceptance of those practices,” the center’s report said.

The center reported that it is not Louisiana’s ethics laws that produced such a poor grade, but the day-to-day interpretations of the laws by various departmental legal advisors.

Since the center’s first survey of public integrity on a state-by-state basis, no fewer than 12 states have had legislators or cabinet-level officials charged, convicted or resign over ethics-related issues, the report said.

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By MIKE STAGG (Independent filmmaker, citizen activist, political strategist – Special to LouisianaVoice)

For the past seven years, as Louisiana has lurched from one fiscal crisis to another, the State of Louisiana has paid the oil and gas industry $2.4 Billion in severance tax exemptions. Despite that massive transfer of public wealth into private hands, the oil and gas industry used its influence inside the Department of Natural Resources and the Jindal administration, to limit—and for three years shut down—audits that would have revealed whether the industry’s severance taxes and royalty payments to the state were accurate.

These facts have been hiding in plain sight, contained in five performance audits of the Department of Natural Resources and the Louisiana Department of Revenue conducted by the Legislative Auditor since 2010. Two of those audits focused on royalty collections from oil and gas produced on state-owned lands and water bottoms. Another focused on severance tax collections; yet another dealt with mineral leases handled by the State Mineral and Energy board, while the fifth audit examined how the Office of Conservation has handled the orphaned and abandoned well cleanup program.

The cozy relationship between DNR and the oil and gas industry is explicit in the department’s regulation of the industry. That coziness, when extended to state finances, has proven disastrous for the Louisiana treasury and its residents. DNR is responsible for collecting oil and gas royalties, which account for roughly seven percent of state General Fund dollars, or approximately $800 million per year.

For a three-year period, between July 2010 and July 2013, DNR had jurisdiction to determine the accuracy of severance taxes and royalty payments.

And DNR let industry have its way.

Audits on royalty revenue dropped. Audits on severance tax revenue all but stopped, even as the state’s financial condition continued to worsen. In short, when it came to providing rigorous oversight to ensure that the royalty and severance tax payments were accurate, DNR’s Office of Mineral Resources deferred to the oil and gas industry while programs that serve the citizens of Louisiana were cut, primarily in healthcare and higher education, the unprotected portions of the state General Fund.

DNR’s relationship with the oil and gas industry is a blatant example of regulatory capture. Regulatory Capture is a form of political corruption that occurs when an agency, created to act in the public interest, advances instead the special concerns of the industry it is charged to regulate.

Severance taxes are the constitutional expression of our, as Louisiana citizens, shared claim on our state’s vast mineral wealth. Exempting severance taxes negates the public claim on that mineral wealth and undermines our ability to invest in ourselves as a state.

Severance tax exemptions are direct payments from the state to the oil and gas producers after the companies have submitted their exemption certificates. Royalties are the property owners’ share of the proceeds from the sale of oil and gas produced from wells on their land. For purposes of this story, royalties are the state’s share of the revenue from oil and gas produced on state-owned lands and water bottoms after severance taxes have been paid.

Since the mid-1980s, Louisiana Department of Revenue has published an annual report on tax exemptions called “The Tax Exemption Budget.” In that document, the department identifies each tax exemption and quantifies the cost of each exemption to the state.

It makes clear that tax exemptions are in fact a spending of state funds — here’s how the LDR explains it in every report: “Tax exemptions are tax dollars that are not collected and result in a loss of state tax revenues available for appropriation. In this sense, the fiscal effect of tax exemptions is the same as a direct fund expenditure.”

Between 2008 and 2014, according to the Tax Exemption Budget, the State of Louisiana paid oil and gas companies more than $2.4 Billion in severance tax exemptions. Those checks went out at the exact same time that our legislature cut funding for programs like aid to families of children with disabilities, behavioral health programs, home health care, and programs that assisted victims of domestic violence. During that same period, state funding for higher education was also cut by more than $700 million as the tuition and fees paid by those attending technical colleges, community colleges, and state universities were jacked up to cover the difference.

The first performance audit on royalty collections was released in July 2010. Royaltieshttps://app.lla.state.la.us/PublicReports.nsf/B6B5DE331E9D48818625776E005CFDA5/$FILE/00018070.pdf The Legislative Auditor found that DNR’s Office of Mineral Resources took a lackadaisical approach to verifying the accuracy of royalty payments from the 1,888 active mineral leases on state-owned lands and water bottoms.

The Legislative Auditor noted that severance taxes and royalties are connected, that both are dependent on the amount of oil and gas produced, as well as the price of the resource.

Desk audits compared the volume of oil and gas sold to the volume of oil and gas produced, which ensures that royalty payments are properly calculated. These audits also help ensure that production wells on state lands are submitting properly calculated royalty payments.

The Legislative Auditor found that the Office of Mineral Resources (OMR) had not conducted a single such audit in a decade. Despite the Auditor’s recommendation that it resume these audits, OMR waited another three years before getting around to doing so.

The Legislative Auditor also found that OMR did not compare royalty reports against severance tax reports filed with the state Department of Revenue, nor did it compare royalty reports to production reports submitted elsewhere in DNR.

In its response to the Legislative Auditor’s Royalty performance audit findings, on June 24, 2010, DNR announced that “As part of the Streamlining Commission’s recommendations, OMR will take over LDRs severance tax field audit program and the two audits will be integrated beginning July 1, 2010.”

In September of 2013, the Legislative Auditor released a follow-up performance audit on royalty collections. https://app.lla.state.la.us/PublicReports.nsf/DB918AD8E33411F286257B490074B82A/$FILE/00031C97.pdf

The auditors were dismayed to find that the revenue produced by OMR’s audits had fallen below the levels reported in 2010.

The Auditor also found that that the State Mineral and Energy Board had waived 45% of the $12.8 million in penalties that were assessed against companies by OMR for late payment of royalties.

Neither the Office of Mineral Resources nor the State Mineral and Energy Board seemed at all concerned about the fiscal impact their indifference to generating revenue had on the programs that Louisiana residents depend on. Their primary concern was with not inconveniencing their friends in the oil and gas industry.

The Legislative Auditor conducted an audit on severance tax collection procedures in the

Louisiana Department of Revenue in 2013 but, because severance tax audit functions had been transferred to the DNR in 2010, auditors had to return to the Office of Mineral Resources close on the heels of the second royalty collections audit. https://app.lla.state.la.us/PublicReports.nsf/AC044A6D3709B90C86257BE30065348B/$FILE/000351F7.pdf

In this audit, the Legislative Auditor found that oil and gas industry complaints about the LDR’s use of GenTax software (which identified possible nonpayers of severance taxes) led first, to LDR shutting off the software, and second, audit power being transferred to DNR.

The scale of the oil and gas production not audited as a result of that shift was staggering. DNR’s field audits ignored oil and gas production on private lands — which comprises 98.1% of all oil and gas leases in Louisiana — for a three-year period.

Revenue from severance tax audits fell 99.8% from the levels produced by the Department of Revenue once responsibility was transferred to the Office of Mineral Resources. The actual dollar amount fell from $26 Million in 2010 to $40,729 in Fiscal Year 2012.

For the three-year period that DNR’s Office of Mineral Resources had responsibility for severance tax audits, the industry essentially operated under an honor system.

Prior history shows why this was a problem. In the late 1990s, the Mike Foster administration filed lawsuits against more than 20 oil and gas companies claiming they had shortchanged the state by as much as $100 million on severance tax payments. Now, for three years as recurring revenue shortfalls continued, the Office of Mineral Resources ignored that history.

During this time, the Haynesville Trend emerged as the most productive shale gas field in the country.

Even though the severance tax exemption on horizontal drilling meant that the state was denied severance tax revenue for much of that play, companies still managed to game the exemption system at taxpayer expense.

Under the rules for severance tax exemptions, the state pays back the taxes already paid once it receives the exemption certificate from the company — plus “Judicial Interest” which in the period covered by the audit averaged about 4.5%.

That is, the state had to dip into non-exempt severance tax payments in order to cover the interest costs on those certificates that the companies chose to sit on for several months.

The Audit found that over the course of four fiscal years running from 2009 through 2012, the Department of Revenue issued 13,818 severance tax refund checks totaling $360,190,583. An extra $23,859,012 in interest was tacked on to that. https://app.lla.state.la.us/PublicReports.nsf/CF6244B77E3A958686257C30005E80B1/$FILE/000368DA.pdf

In addition, the Auditor found that the Department of Revenue overpaid severance tax exemption refunds by $12.9 million between July 2010 and May 2012.

The decline in audit revenue, the interest paid to companies on the gaming of the severance tax exemption process, the overpayment of severance tax exemption refunds, the decision by the State Mineral and Energy Board to waive 45% of fines for late payment of royalties combined to benefit the industry at taxpayer expense to the tune of $68 million.

These gifts to the oil and gas industry were made at a time when the industry was already receiving $2.4 Billion in tax exemptions and at a time when every dollar the state did not collect translated into a cut to programs that Louisiana residents depended on.

The Auditor also pointed out that hiring additional auditors within DNR and LDR would produce a great return on the state’s investment. Each auditor costs a department between $50,000 and $60,000 per year, but they bring in an average of $1.3 million per year. LDR said it had requested additional auditors in its budgets but they were never approved by the Jindal administration.

Oil and gas companies control all of the information used in the severance tax and royalty payment process. The industry has used this power to its advantage and to the state’s detriment.

Vigilant auditing can close that information gap.

The Office of Mineral Resources has shown little interest in that kind of work. DNR’s abdication of its oversight role on royalty revenue has had an outsized impact on Louisiana because of the role that revenue plays in state finances. When added to the three-year period when DNR failed to perform severance tax audits, the agency has likely cost the state hundreds of millions of dollars over the past seven years.

That is corruption.

Not all of this went unnoticed. In the 2014 legislative session, Sen. Rick Gallot (D-Ruston) and Rep. Joe Harrison (R-Gray) introduced concurrent resolutions to order LDR, DNR and the Legislative Auditor to agree upon a means to conduct a thorough audit of oil and gas production, severance taxes and royalty payments. Gallot’s resolution passed the Senate by a vote of 35-0. https://app.lla.state.la.us/PublicReports.nsf/D6A0EBE279B83B9F86257CE700506EAD/$FILE/000010BC.pdf

But by the time the resolution reached the House floor in early June, the oil and gas industry and the Jindal administration recognized the threat the audit posed, so they joined forces to kill it. SCR 142

The resolution had to be killed to keep the secret.

In the midst of a prolonged and deepening fiscal crisis, the Jindal administration and the industry did not want legislators and the public to question whether the severance taxes and royalties paid to the state were accurately calculated.

The Department of Natural Resources betrayed the trust of the people of this state. It failed its fiduciary responsibility twice; first, as collector of royalty payments, and again during the time it served as chief auditor of severance tax collections. It has repeatedly put the needs of the industry above the needs of the people of this state.

For the oil and gas industry, $2.4 Billion in severance tax exemption payments were not enough. Its greed is so great that, in a time of fiscal constraints on state government, it went out of its way to cheat the state out of still more money. It used its power and influence in the Department of Natural Resources and its ties to the Jindal administration to do so.

By these acts, the oil and gas industry has shown itself to be unworthy of the trust we have placed in it.

For Looting Louisiana in our time of fiscal need, the oil and gas industry must be stripped of its severance tax exemptions. Under the Louisiana Constitution, we are entitled to the full benefits of this state’s mineral wealth.

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The Baton Rouge Advocate last December ran an excellent eight-part series on Giving Away Louisiana in which the paper examined inventory tax rebates, movie tax credits, Enterprise Zone tax credits, solar energy subsidies, fracking incentives and the state’s 10-year property tax exemptions, all of which combine to gut the state treasury of billions of dollars in tax revenue.

We took a little different approach.

Sometimes all one has to do to illustrate the folly of Louisiana’s corporate tax exemptions and tax credits is do the math.

The theory in Baton Rouge is that such tax breaks create jobs which in turn produce taxes for the state coffers through consumer spending and state income taxes, thus making the exemptions and credits a win-win for everyone concerned.

Take the five-year tax credit awarded in 2013 to Lakeview Regional Medical Center in St. Tammany Parish for an upgrade to its hospital facilities, for example. In exchange for the creation of five new jobs with a new five-year payroll of $1 million, Lakeview was awarded $330,000 in Enterprise Zone tax credits. (A tax credit is a dollar for dollar reduction of a tax liability meaning a $1 tax credit reduces one’s taxes by a full dollar.)

Broken down, that comes to $200,000 per year in new payroll, or an average of $40,000 per new employee per year against a tax credit of $66,000 per year.

At Louisiana’s 4 percent tax rate for that income bracket for a family of three, that means the state will rake in $4,000 per year total for all five employees ($800 each). http://www.tax-brackets.org/louisianataxtable

For a single employee, the state income tax revenue increases to $5,650 for all five employees ($1,130 each), still a far cry from the $66,000 per year in tax credits awarded to the hospital.

Obviously, the new employees will spend money locally which will generate local and state sales tax revenues, but it will take a lot of income and sales taxes from five employees to make up for the loss of $66,000 per year over that five-year period.

Louisiana, meanwhile continues to offer inducements to business and industry that defy logic—projects like the $152,000 Enterprise Zone five-year tax credit for Wal-Mart. Enterprise Zone credits are awarded ostensibly for businesses to locate in areas of high unemployment.

This Wal-Mart, however, was built in St. Tammany Parish, one of the most affluent areas of the state. And Wal-Mart pays low wages, has been cutting back on offering medical benefits for its employees and last March, the EEOC filed a an age and disability discrimination lawsuit against Wal-Mart stores in Texas.

In this case, the total five-year payroll for the 65 new jobs created by the new Wal-Mart was $2.78 million, or about $8,550 per year per employee. The federal poverty level for a single person is $11,670 per year and $19,790 for a family of three. That means the typical Wal-Mart employee in Louisiana is eligible for food stamps and Medicare/Medicaid–at state expense. The 2014 That salary for a family of three produces a state income tax of $21 ($41 for a married person with no children or $61 for a single employee claiming only him/herself).

The total taxes owed, depending on marital status and number of dependents, would range from $1,365 to $3,965 for all 65 employees, or between $6,825 and $19,825 for the five years of the Enterprise Zone tax credit—a far cry from the $152,000 tax credit awarded Wal-Mart.

In 2013 alone, Entergy, the electric-utility holding company with total assets of $43.4 billion and which provides electricity throughout south Louisiana and parts of Arkansas, Mississippi and Texas, received 21 separate 10-year property tax exemptions totaling $115 million while creating….not a single new job.

Entergy CEO J. Wayne Leonard received $27.3 million in compensation in 2009 and that same year, Entergy directors awarded him an additional $15,871 to pay part of his 2008 federal income taxes. The question here might be: how many Entergy employees did the directors help with their federal income taxes?

All this from a company that, after independent audits of charges, had to refund nearly $3.4 million to the New Orleans Sewer and Water Board in 1992 ($1 million), the City of New Orleans in 1993 and 1994 ($2.2 million), the New Orleans Superdome Mall ($70,000) and LSU ($90,000).

While state income taxes are not the only barometer in calculating the impact of corporate tax breaks (state and local sales taxes paid by those employed as a result of the incentives, for example, would add to the equation), but just taking state income taxes for a typical family of three or four, this what LouisianaVoice found:

  • The state gave 10-year Quality Job payroll rebates of an estimated $40.85 million in 2013 against projects creating 1,357 new jobs with a combined new 10-year payroll of $680.85 million. That comes out to an average salary of $49,700 per year. For an employee married, filing jointly and with 3 exemptions (including him/herself) that comes to an average state income tax of $1,008 per year—or a 10-year total of $13.7 million total for all 1,357 employees. So, the state collects somewhere between $13.7 million and $20.6 million (depending on marital status and dependents) against payroll rebates of $40.85 million over 10 years—a net loss to the state of about $20 million.
  • The state gave five-year Enterprise Zone tax credits totaling $19.6 million during 2013 for projects producing 4,857 new jobs with a combined five-year, new job payroll of $658.3 million, an annual average salary of only $26,900—an average state income tax liability of $400 per employee which, over a five-year period, produces about $9.7 million to $10 million in state income taxes—against tax credits of $19.6 million, or a net loss of $9.6 million to $9.9 million to the state over the five year life of the tax credit.
  • But the real kicker is the 10-year property tax exemption of $790 million in 2013. For that, 3,696 new jobs were created with a new 10-year payroll of $1.84 billion, or about $184 million per year, which comes out to $49,780 per new employee per year. That salary would produce an average state income tax liability of about $1,200 per year per new employee, or about $44.4 million over 10 years, a loss to the state of more than $750 million over 10 years. By these calculations, it would take something like 17.5 years of state income taxes from these 3,696 employees to make up for the $790 million in lost property taxes.

These three programs combined for a net loss to the state of about $80 million per year just in state income and property taxes. And that doesn’t even include the movie and TV credits or tax abatements, the inventory tax rebates, and the other incentives. So, since Jindal has been in office, the state has given away well over $5 billion dollars in Enterprise Zone, Quality Jobs, and 10-year property tax exemption programs without coming anywhere near recovering that amount in individual taxes paid by employees of those corporations who nevertheless are called upon to shoulder a disproportionate share of the cost of government not borne by their employers.

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At long last we have only three more days of those annoying—as in wanting to throw a brick through that expensive flat screen—TV campaign ads in which a leering U.S. Rep. Bill Cassidy and a weary appearing incumbent U.S. Sen. Mary Landrieu trade insults, barbs and outright lies about each other.

But there is another race to be decided Saturday that has flown under the radar of all but the residents in Public Service Commission (PSC) District 1, which encompasses all or parts of Orleans, Jefferson, Ascension, St. Bernard, Plaquemine, St. Charles, and the Florida parishes of Livingston, Tangipahoa, Washington, St. Helena and St. Tammany.

Even in those parishes, the tawdry Landrieu-Cassidy contest to determine the least undesirable candidate has overshadowed the runoff between PSC Chairman Eric Skrmetta and challenger Forest Bradley Wright, both Republicans.

But it is an election of which voters in District 1 should certainly be aware.

In the November 4 primary, Wright polled 99,515 votes (38.44 percent) to Skrmetta’s 95,742 (36.98 percent), with Republican Allen Leone playing the spoiler role with 63,622 votes (24.58 percent) to force Saturday’s showdown.

For this race, LouisianaVoice has chosen to take a closer look at Skrmetta, by resurrecting a video of his bizarre, and certainly unwarranted behavior two years ago during the testimony before the PSC of a spokesman for the Louisiana Conference of Catholic Bishops.

A smug Skrmetta displayed unprecedented contempt for Robert Tasman who, through frequent interruptions and challenges from the chairman, attempted to read a statement on behalf of the conference which called upon the PSC to reduce exorbitant telephone rates for prison inmates.

Skrmetta claimed that he was told by an archbishop for the church that the church’s position was simply that rates not be increased. The exchange between Skrmetta and Tasman escalated to Skrmetta’s suggesting that Tasman should attend confession, presumably for attempting to mislead the commission. http://joule-energy.us5.list-manage.com/track/click?u=c2265593d29be2a1d4f35bf12&id=9bacfdbffc&e=25b6a2fa99

Skrmetta’s rude behavior got so bad at one point that it provoked a challenge by fellow PSC member Foster Campbell who admonished the chairman, suggesting that he keep quiet until Tasman completed his testimony.

That only served to spark a heated verbal exchange between Campbell and Skrmetta.

The commission eventually worked out a compromise that even Skrmetta voted for. Regulators agreed to cut the rates by 25 percent for prisoner calls to family, clergy, and government officials. http://theadvocate.com/home/4666375-125/psc-rolls-back-prison-phone

So, what moved Skrmetta to such passion that he would challenge the veracity of an official of the Catholic Church?

Well, for openers, try $29,500.

That’s how much he has received in campaign contributions since 2009 from six companies and executives of two of the companies that provide inmate telephone services. Two of those, Securus Technologies of Dallas, and City TeleCoin Co. of Bossier City, combined to contribute $12,000 to Skrmetta’s campaign in separate contributions in December of 2013, nine months after the companies were cited by the PSC for charging extra fees in violation of the amended rates of December of 2012.

Global Connections of America of Norcross, Georgia, which contributed $5,000, was also in violation but was not cited.


Other inmate telephone service companies that contributed to Skrmetta included:

  • Network Communications of Longview, Texas ($5,000);
  • William Pope, President of Network Communications ($2,500);
  • Gerald Juneau and his wife, Rosalyn, owners of City TeleCoin ($5,000 each);
  • ATN, Inc. of St. Mary, Georgia ($2,500);
  • Ally Telecom Group of Metairie ($2,500).

Taking campaign contributions from regulated industries, while posing the obvious risk of conflicts of interest and even influence-buying, is not at all unusual. Utilities and trucking companies which are regulated by the PSC contributed to commission members just as insurance-related companies contributed to campaigns for Louisiana Insurance Commissioner in a practice some equate to little more than not-so-subtle bribery.

Skrmetta, however, has taken the practice to art form status; he has received substantially more campaign money from regulated industries than any other member of the PSC.

In all, he has received a whopping $482,800 in individual contributions of $500 or more from regulated industries, attorneys and PSC contractors just since 2009. That was a year after he was first elected to the PSC. Only two campaign contributions totaling $1,200 are listed on his campaign reports prior to 2009.

Scores of representatives of Entergy contributed at least $30,800 since 2009 and the New Orleans law firm Stone-Pigman and several of its attorneys chipped in another $29,750—$17,000 on the same day that Skrmetta made the motion during a PSC meeting to approve an additional $220,000 in consultant fees and expenses for the firm’s defense of litigation filed against the commission by Occidental Chemical Corp.

Skrmetta, it should be noted, opposed the ban on fundraisers within 72-hours of PSC meetings—understandable in hindsight. A 72-hour ban be damned; he took the money on the same day of the commission’s meeting and its approval of the amendment which bumped the law firm’s contract up to $468,000 in fees and $39,600 in expenses.

Wright, Skrmetta’s opponent in Saturday’s runoff election was critical of Skrmetta’s taking the contributions from Stone-Pigman on the same day as the PSC meeting—and on the same day as the contract amendment.

“The issue is integrity, which is undermined when a public service commissioner takes a cut off the top from the contracts they authorize in the form of campaign contributions,” he said. “We pay the price from these bad dealings, not only in dollars but also in the erosion of trust that happens all too frequently when elected leaders put themselves and their own power before the interest of the public.”

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