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Archive for the ‘Revenue’ Category

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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Bobby Jindal has promised to find money to address the funding crisis facing Louisiana’s public colleges and universities but besides the obvious dire financial straits in which the state currently finds itself, two important obstacles must be overcome by our absentee governor: the American Legislative Exchange Council (ALEC) and Grover Norquist.

The odds of appeasing just one in efforts to raise needed funding for higher education will be difficult enough, given Jindal’s allegiance to the two. Obtaining the blessings of both while simultaneously distracted by the siren’s call of the Republican presidential nomination will be virtually impossible.

Higher education, already hit with repeated cuts by the Jindal administration, is facing additional cuts of up to $600 million, or 82 percent of its current budget, according to news coming out of the House Appropriations Committee earlier this month. http://www.nola.com/politics/index.ssf/2015/04/louisianas_higher_education_bu.html

Such a fiscal scenario could result in the closure of some schools and across the board discontinuation of programs.

Moody’s, the bond-rating service, has warned that Louisiana higher education cannot absorb any further cuts. http://www.treasury.state.la.us/Lists/SiteArticlesByCat/DispForm_Single.aspx?List=c023d63e%2Dac65%2D439d%2Daf97%2Dda71d8688dff&ID=884

Louisiana has already cut per student spending by 42 percent since fiscal year 2008 (compared to the national average of 6 percent), fourth highest in the nation behind Arizona, New Hampshire and Oregon. The actual cut in dollars, $4,715 per student, is second only to the $4,775 per student cut by New Mexico. To help offset those cuts, Louisiana colleges and universities have bumped tuition by 38 percent, 10th highest in the nation but still a shade less than half the 78.4 percent increase for Arizona students. http://www.cbpp.org/research/recent-deep-state-higher-education-cuts-may-harm-students-and-the-economy-for-years-to-come?fa=view&id=3927

But that’s all part of the game plan for ALEC, the “model legislation” alliance of state legislators heavily funded by the Koch brothers which has as its overall objective the privatization of nearly all public services now taken for granted: prisons, pension plans, medical insurance, and education, to name but a few. http://www.cbpp.org/research/alec-tax-and-budget-proposals-would-slash-public-services-and-jeopardize-economic-growth?fa=view&id=3901

Jindal has already incorporated some of ALEC’s privatization proposals, namely state employee medical insurance and elementary and secondary education. He met with less success in attempts to initiate prison privatization and state retirement reform.

ALEC also proposes abolishing state income taxes, another proposal floated and then quickly abandoned by Jindal but pushed successfully by Kansas Gov. Brownback. http://www.washingtonpost.com/blogs/wonkblog/wp/2015/04/21/vwelfap/

And then there is Norquist, the anti-tax Republican operative who founded Americans for Tax Reform and who somehow survived the Jack Abramoff scandal and thrived. http://en.wikipedia.org/wiki/Jack_Abramoff_Indian_lobbying_scandal

What strange hold does he have over Jindal?

The pledge.

Jindal, as did a couple dozen Louisiana legislators, signed onto Norquist’s “no-tax” pledge—a promise not to raise taxes under any circumstances. The pledge even prompted Jindal to veto a 4-cent cigarette tax renewal in 2011 because in his twisted logic, it was somehow a new tax. The legislature had to adopt a last-minute constitutional amendment to make the tax permanent.

Undeterred, Jindal, through communications director Mike Reed, has said he would support a cigarette tax increase this year only if it is offset with a tax cut elsewhere. This despite estimates that a higher tax would not only generate needed income for the state, but would, by encouraging smokes to quit and teens to not start smoking, create long-term health care savings for the state. His veto also flew in the face of a 1997 article that Jindal authored while secretary of the Louisiana Department of Health and Hospitals in which he said, “Society must recover those costs which could have been avoided had the individual not chosen the risky behavior only to prevent others from having to bear the costs.” http://theadvocate.com/news/11930951-123/lawmaker-proposes-154-state-cigarette

Not to be confused with the “no-go” zones of Jindal’s vivid imagination, the “no-tax” pledge apparently is a good thing for Republicans and tea partiers and is considered sacrosanct to those who have taken the oath even if it locks politicians into the impossible situation of trying to resolve a $1.6 billion budgetary crisis while not increasing revenue.

Jindal routinely runs proposed legislation by Norquist for his blessings, according to Jindal spokesperson Reed who admitted as much. http://www.nola.com/opinions/index.ssf/2015/03/in_jindals_world_tax_is_a_tax.html

Even U.S. Sen. David Vitter signed the pledge but has assured voters it won’t be binding on him as governor—a dubious promise that would make him unique among signers. After all, a pledge is a pledge and when one signs it, so what difference would it make which office he holds?

So, how does all this figure into the budget crisis for higher education in Louisiana?

In a word, privatization. Or, taking the “state” out of “state universities.”

While neither Jindal nor any legislator has dared breathe the word privatization as it regards the state’s colleges and universities, at least one Jindal appointee, Board of Regents Chairman Roy Martin of Alexandria, has broached the subject, speaking he said, strictly as an individual. http://theadvocate.com/news/11716059-123/regents-look-at-privatizing-public

The slashing of higher education budgets appears to be a pattern as governors attempt to wean colleges and universities from dependence on state funding, transitioning their status from state-supported to state-assisted to state-located. http://www.usnews.com/news/articles/2015/02/27/scott-walker-bobby-jindal-aim-to-slash-higher-ed-funding

Privatization of state colleges and universities would, of course, push tuition rates even higher, making a college education cost prohibitive for many. But that dovetails nicely with the ALEC agenda as income disparity continues to widen with ever more generous tax laws that benefit the super-rich while placing growing burdens on lower-income taxpayers. By winnowing out those who can least afford college, privatization necessarily enhances the selection process to serve the elite and at the same time, opens up additional revenue opportunities for those in position to take advantage of privatized services such as book stores, printing, food services, and general maintenance. http://gse.buffalo.edu/FAS/Johnston/privatization.html

There is already a backlog of nearly $2 billion in maintenance projects on state college and university campuses just waiting for some lucky entrepreneur with the right connections.

http://theadvocate.com/home/5997316-125/backlog-of-maintenance

States like Louisiana, by such actions as simply increasing our cigarette tax (third lowest in the nation) and being less generous with corporate tax breaks and initiatives, could have reduced the size of the spending cuts or avoided them altogether. Sadly, that was not done and those looking at someone to blame cannot point the finger only at Jindal; legislators have been complicit from the beginning and must shoulder the responsibility for the present mess.

As a result, state colleges and universities have already cut staff and eliminated entire programs to such a degree that Louisiana’s high school seniors already are considering options out of state and other states are obliging. https://lahigheredconfessions.wordpress.com/

Should the legislature adopt any measures to raise revenue for higher education, such measures likely would be vetoed by Jindal if he gets the message from Norquist to do so.

If that occurs, his palpable disregard for the welfare of this state as evidenced by his growing absence will be dwarfed by the affront of taking his cue of governance from a Washington, D.C. lobbyist as opposed to listening to his constituents who want real solutions and not political grandstanding.

But that certainly would be nothing new for Bobby Jindal.

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By Stephen Winham (Special to LouisianaVoice)

I became the state budget director in 1988.  Because we had consistently spent more than we had taken in since 1984, we faced a $1 Billion dollar budget and cash flow hole in a budget less than half the size of today’s.  We literally did not have the money to pay our day-to-day bills and, like too many of our citizens, had to hold off paying them until we had the cash.  We were flat busted.

In an effort to ensure this never happened again, we enacted a comprehensive package of budget reforms, including establishing  an official revenue forecast; prohibiting the use of one-time money for recurring expenses; requiring a balanced budget from initial presentation through enactment  and to be maintained throughout the year; providing that any interfund borrowing (the mechanism that enabled us to go totally broke in 1988) had to be repaid by the end of the year in which it was borrowed, and many others.

To address the immediate emergency, we took the unprecedented step of creating a special taxing district that issued bonds we paid back over 10 years by dedicating one cent of our sales tax to debt service.

We began to diversify our economic revenue base.  For example, we went from a 40% reliance on mineral revenues to a less than 10% reliance on them today.  We raised other taxes, including, most notably, sales taxes.

We took full advantage of a federal Medicaid program paying high rates to facilities serving a disproportionate share of poor people (we made an annual “profit” of $700 million from this program during its peak).

We enacted the lottery, riverboat, and land-based casino gambling.

All of these kept us going until 1995 when our economy finally began to perform really well and did so through 1998.  Our economy slowed down in 1999 and it was necessary to pass more taxes.

In 2002, the legislature passed, and the state’s voters approved a plan by Representative Vic Stelly that substituted increases in income taxes for 4 cents of sales taxes on food and utilities and placed these exemptions, along with those on pharmaceuticals, in the state constitution.  The reason:  Because sales taxes are regressive and because income taxes generally respond better to our economy than sales taxes.  In my opinion, and that of many others, the Stelly Plan was the best fiscal legislation passed in our history.

We were doing pretty well until 2005 when Katrina struck.  Ironically, recovery from Katrina fueled our economy to the point that by the time Governor Jindal took office in 2007, we had a $1.1 Billion surplus.  Governor Blanco’s last proposed budget was $29.2 billion, of which over $8.0 billion was disaster relief money.  The legislature enacted a $32 Billion budget that year, including the $8.0 billion in non-recurring money.

So, what happened?

Well, remember those laws we passed to ensure we engaged in sound budgetary practices?  We began to ignore them and we spent the $1.1 Billion surplus and every other pot of one-time money we could find.  We repealed HALF, NOT ALL, of Stelly – the income tax increases that would be generating about what we lose in the sales tax exemptions still on the books today -about $700 million.

We cut corporate taxes in half – by a cool Billion.

We pretended we had a balanced budget every year, but using common sense and the letter of the laws we enacted, it is clear we, in fact, DID NOT.  And, although cuts were made – state funding to higher education, as one example, has been cut by $500 million – we NEVER made the cuts necessary to balance recurring spending with recurring revenue.  Why?  According to Kristy Nichols, Commissioner of Administration, as quoted in 2013, doing so would result in “needless reductions to critical services.”  WHAT?  Are you saying you didn’t cut the budget because you couldn’t?  Or, are you for cutting the budget, but you really don’t want to do so?

Governor Jindal continues to be widely quoted, to this day, saying we need to live within our means.  If that is true, why does he not present budgets that do so?  As long as projected revenues from reliable, stable sources do not equal projected necessary expenditures, we will NEVER have a balanced budget.

Could anything possibly be simpler, or make more sense, than balancing what you plan to spend with what is coming in so you don’t dig a hole for yourself?

It is certainly easy to understand why it is difficult to make hard cuts when cash is, or even may be available, but willfully allowing gross fiscal instability to continue indefinitely is a violation of the public trust and ultimately leads to wasteful spending and the inability to see true inefficiencies because the fiscal house is always on fire.  It is beyond time we were presented with an honest budget on which to make honest decisions.

So, you might rightly ask, “How would you fill the $1.6 Billion hole we read about every day in the papers?”

There are an almost infinite number of ways to do so.  Here’s one:

$1.600 reported gap

($0.160): Don’t Fund Inflation and other continuation costs. We rarely do, anyhow.

($0.180): Make cuts pursuant to consultant “efficiency” recommendations. We ought to get something for the $7 million we blew on this contract.

($0.100): Increase tobacco tax to the southern average

($0.700): Restore the income tax provisions of the Stelly Plan

($0.149): Eliminate the refundable tax credits proposed by the governor, except the inventory credit.

($0.100): Cap film tax credits at $150 million

($0.200): Eliminate exemption from severance taxes on horizontal wells. This was new technology when the exemption was granted. It certainly isn’t now, so no incentive is needed.

($0.011): A rounding figure, based on the Executive Budget. Or do $11 million of the $415 million in strategic cuts recommended by the governor – or, dozens of other possibilities.

$0.000 Remaining Problem.

Too simple, right?   And, perhaps, other holes could be poked in my scenario as well, but it proves it is possible to take a pragmatic approach, combining cuts with a limited number of revenue measures for a relatively simple solution.  We often make things a lot more complicated than they are.  I am convinced our government leaders often make simple things complicated in hope citizens won’t know and question what’s going on.

Regardless of what happens we must have an honest budget. If balancing recurring expenses with recurring revenues means making draconian cuts, so be it. Because they have been misled repeatedly, the bulk of our citizens will never believe we have a problem (or one that can’t simply be solved with cuts) until they experience the reality of a true “reform” budget that raises no revenues and cuts services to achieve balance. I sincerely hope it doesn’t come to that, but it may be the only path to real reform.

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prevaricator

[pri-var-i-key-ter] /prɪˈvær ɪˌkeɪ tər/

noun

  1. a person who speaks falsely; liar.
  2. a person who speaks so as to avoid the precise truth; quibbler; equivocator.

Bobby Jindal loves to throw around the “L-word.”

So much so that we at LouisianaVoice are beginning to let it creep into our vocabulary when writing about Bobby.

Of course, his “L-word” and our “L-word” have completely different meanings.

For him, it’s invoked when reacting to the “Liberal” media’s calling him out on his claims of being the savior for Louisiana’s health care, education, economy, ethics and general well-being.

For us, the “L-word” denotes Liar, as pathological Liar.

A pathological liar is defined as an abnormally habitual liar, or a person who lies to the point that it is considered a disease or condition. That would be Bobby Jindal, the man who took ideas from medical experts when he headed up the Department of Health and Hospitals, implemented those ideas and called them his own.

Before you get the wrong idea, we don’t reside in a dream world where the sun is always shining and the grass is always green. We know politicians lie. Former Gov. Edwin Edwards once said it went with his job.

We understand that just as we can predict that in the upcoming gubernatorial election, one of the candidates is certain to stretch the truth a bit by claiming that then-State Rep. David Vitter’s vote against tabling House Bill 1013 way back in 1993 was because he supported gay rights. http://louisianavoice.com/

Anyone who knows Vitter knows better than that (maybe hooker rights, but that’s another story for another day). His voting not to table the bill that would have made it illegal for employers or insurers to discriminate based on sexual orientation was merely an effort to keep the bill alive for full floor debate where it was certain to have been defeated.

But Bobby Jindal elevates lying to an art form At least he tries to, but his prevarications are so disingenuous as to appear laughable—except the joke is on us.

Take that letter that Jindal recently wrote to the New York Times http://www.nola.com/politics/index.ssf/2015/03/bobby_jindal_defends_his_recor.html#incart_river  in response to the paper’s editorial about governors being unable to hide from their records http://www.nytimes.com/2015/03/01/opinion/sunday/governors-can-run-but-they-cant-hide.html?_r=0 and the column about the Jindal implosion http://www.nytimes.com/2015/03/23/opinion/charles-blow-gov-jindals-implosion.html by  Times writer Charles Blow who just happens to be from the north Louisiana town of Gibsland and who was a Grambling State University honor graduate.

In that letter, Jindal repeated the claim that he had cut the state payroll by “30,000 workers.”

Liar.

The Louisiana Office of Civil Services issues monthly layoff reports and contained in that monthly report is a year-by-year accounting of the number of civil service positions eliminated and the number of employees laid off. February 2015 Layoff Report

Since Fiscal Year 2008, which began six months prior to Jindal’s taking office in January of 2008, through the end February 2015, there have been a grand total of 13,577 positions eliminated and 8,396 employees laid off. The difference is apparently 5,181 eliminated positions were already vacant and simply not filled. Taking either number, you have far fewer than half the 30,000 claimed by Jindal.

“This fiscal responsibility resulted in eight straight upgrades by the major credit agencies,” he said in his letter, while neglecting to mention that two major rating agencies, Moody’s and Stand & Poor’s recently moved the state’s credit outlook from stable to negative while threatening the more severe action of a downgrade. http://louisianavoice.com/2015/02/14/two-major-investment-rating-firms-downgrade-louisiana-to-negative-state-is-now-officially-at-the-financial-end-game/

“And what did lower taxes do for our economy? They spurred growth,” he said. “Louisiana now has higher incomes…”

Liar.

The state’s per capita income while increasing 1.1 percent from 2012 to 2013, has actually decreased overall since 2008 and continues to lag nearly $3,500 behind the national average while the median family income decreased by more than $2,500 and trailed the national median family income by more than $8,000. http://www.deptofnumbers.com/income/louisiana/

http://www.nola.com/politics/index.ssf/2012/09/louisiana_ranks_poorly_on_late.html

Were it not for Mississippi and the District of Columbia, Louisiana’s poverty rate (by household income) of 18.3 percent would be the highest in the nation. (Mississippi’s poverty rate is 20.1 percent and D.C. has a poverty rate of 20.7 percent.) http://en.wikipedia.org/wiki/List_of_U.S._states_by_poverty_rate

Moreover, our already stratospheric poverty rate is continuing to rise. http://www.labudget.org/lbp/2013/09/poverty-on-the-rise-in-louisiana/

“…more jobs…”

Liar.

The February unemployment rate for Louisiana (the latest figures available) was 6.7 percent, compared to 5.5 percent for the rest of the country. The rate was 4 percent when Jindal took office but three years into his first term, the rate had risen to 8 percent before dropping below 6 percent in 2014 and spiking again this year. http://www.deptofnumbers.com/unemployment/louisiana/

“…and more people than we’ve ever had in the history of our state.”

Perhaps, but when those who were evacuated to other states in the aftermath of hurricanes Katrina and Rita return, that does not signify population growth. That’s just folks coming home after a hiatus of a few years.

But no matter. Jindal long ago staked out his position on immigration reform. http://www.ontheissues.org/Governor/Bobby_Jindal_Immigration.htm

But while he is claiming “more people than we’ve ever had in the history of our state,” he may wish to take a closer look at what the numbers mean.

Yes, it’s true that the state’s population grew by 64,396 (an increase of 1.44 percent from 2000 to 2010). But the state actually lost 20,426 (-.47 percent) in the number of residents “not Hispanic or Latino origin” while registering a gain of 84,822 (78.7 percent increase) in the number of people of “Hispanic or Latino origin.” http://censusviewer.com/state/LA

How’re you gonna square those numbers with your stand on immigration reform, Bobby? You can’t very well boast of population growth and decry the influx of Hispanics in the face of those facts.

“A larger gross domestic product…”

Shoot, on this we don’t even beat Mississippi. Of the 12 states in the Southeast Region, our GDP ranks eighth and barely nudges out Virginia, Tennessee, Alabama and South Carolina. http://www.bea.gov/newsreleases/regional/gdp_state/2014/gspSE_glance.htm

Back in February, Jindal told a reporter for the Christian Science Monitor that Louisiana’s higher education budget “is actually a little bit, just slightly, higher than when I took office.” http://www.washingtonpost.com/blogs/fact-checker/wp/2015/02/11/jindals-claim-that-louisianas-higher-education-budget-is-slightly-higher/

“Wait. Wha…?

LIAR!

No, Bobby, that’s a DAMN LIE!

Anyone who can make that claim with a straight face has some serious mental issues of either being unable to separate face from fantasy or of just being unable to tell the truth—even in the face of overwhelming evidence to the contrary.

Even the Washington Post, for whom he often pens his op-ed pieces when not stumping for the Republican presidential nomination, called him out on that one. http://www.washingtonpost.com/blogs/fact-checker/wp/2015/02/11/jindals-claim-that-louisianas-higher-education-budget-is-slightly-higher/

Remember when Jindal promised that premiums for the Office of Group Benefits would not increase and benefits would not decrease under his privatization plan?

Liar.

And remember how he told us that health care for the state’s poor population would actually improve and the state would save millions by jettisoning those burdensome state hospitals?

Liar.

Team Jindal moves toward developing a medical corridor along Bluebonnet Boulevard and Essen Lane in South Baton Rouge while creating a medical wasteland north of Government Street (thereby protecting medical care for the affluent population but not so much for the poorer, largely black population of North Baton Rouge). Baton Rouge General Mid City (north of Government by a couple of blocks), as part of that plan, is being forced into closing its emergency room facilities next week and there’s good reason to expect similar crises at private hospitals in Lake Charles, Shreveport and Monroe. In fact, the problems are already starting in Shreveport. http://m.apnews.com/ap/db_268748/contentdetail.htm?contentguid=6CI2I0hA

And, of course, there was Jindal’s claim of the infamous “no-go” zones in England in the face of all those apologies by Fox News for initiating the story.

Liar.

It appears Bobby made that claim purely for the sake of political expediency, the worst reason of all. http://www.cnn.com/2015/01/19/politics/jindal-no-go-zones-london/

Jindal, of course, did that major flip-flop on Common Core and is somehow managing to link the Common Core to the radical teaching of American history at the cost of something called “American exceptionalism.”

Liar.

So you’ve changed your position on Common Core. But you overlooked (deliberately, we strongly suspect) one minor detail: Common Core deals only in math and English, not history. http://www.breitbart.com/big-government/2015/02/06/bobby-jindal-what-happens-when-we-stop-teaching-american-exceptionalism-to-our-students/

Finally, there is the biggest Lie of all:

“I have the job I want.”

LIAR!

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There’s nothing left to be said other than to say Bobby Jindal is bat guano crazy.

The Louisiana Office of Group Benefits (OGB) was cruising along in 2011, providing virtually complaint-free quick turnarounds on medical claims for state employees, retirees and their dependents.

But then Bobby Jindal saw a way to undercut premiums in his privatization scheme which allowed the state to be obligated for less in its share of matching premiums so that Jindal could rake in some extra cash to cover his backside, aka budget deficit.

The result, as just about everyone who follows this sham of an administration knows, was that the $500 million reserve fund was all but wiped out.

Bobby Jindal, after having first jerked $40 million in funding for state colleges and universities, reversed himself again by taking $30 million from a federal hurricane recovery fund.

Bobby Jindal has shrunk the state’s rainy day fund from $730 million when he took office to $460 million and a $450 million fund to subsidize companies for investing in the state has evaporated as is the $800 million balance in the Medicaid Trust Fund for the Elderly.

And after giving away billions of dollars in tax breaks, incentives, rebates and exemptions for business and industry in an effort to spur economic development, we learned today (March 18) that Louisiana’s unemployment rate was third highest in the nation. http://www.politico.com/magazine/story/2015/02/bobby-jindal-campaigning-114948_Page2.html#.VQoeJ005Ccw

The one constant in all this is the Louisiana State Lottery, which since a 2004 Constitutional amendment has dedicated proceeds to the Minimum Foundation Formula (MFP) for public education.

Since the lottery’s approval by voters in 1990 and its implementation in 1991, the lottery, which is mandated to transfer 35 percent of proceeds to the state treasury, has contributed $2.8 billion to the state.

In 2014, sales were $450 million and $161 million of that was transferred to the state.

Also, 2014 marked the 13th consecutive year that the lottery has transferred more than $100 million to the state.

Why do we tell you all this?

Well, only because the administration of Bobby Jindal is currently entertaining the notion of selling bonds that guarantee future State Lottery profits in order to raise some $467.7 million in one-time money to help plug a $1.6 billion hole in the state budget.

Wait. What? Sell the State Lottery?

Yup.

State Treasurer John Kennedy tells LouisianaVoice that the administration is “seriously considering” two separate proposals to take over the lottery and to pay the state one time money.

The two proposals were from Wall Street banking firms Goldman Sachs and Citigroup. While Citigroup did not specify an amount, Goldman Sachs said, “Based on lottery revenue growth of at least 1.5 percent annually, the state could raise approximately $428 million and preserve a minimum contribution to the MFP of $160.2 million.” Goldman Sachs Presentation – March 2015

Citigroup Presentation – March 2015

With 13 consecutive years of receipts of more than $100 million and total receipts of $2.8 billion since 1992, $428 million in quick cash appears to be a terrible deal for the state—not that Bobby Jindal gives—or ever gave—a flying fig about this state.

Let’s first take a look back at the history of lotteries in Louisiana.

In 1868, the Louisiana Lottery Co. was authorized and granted a 25-year charter after a carpetbagger criminal syndicate from New York bribed the Legislature into approving the lottery and establishing the syndicate as the sole lottery provider.

Because it was an interstate venture, 90 percent of the syndicate’s revenue came from outside Louisiana. Because it was so profitable, when efforts were made to repeal the charger, bribes to legislators ensured the effort’s failure.

Ten years after it was approved, Louisiana had the only legal lottery remaining in the company. When Congress passed a prohibition against operating lotteries across state lines, the Louisiana Lottery was finally abolished in 1895. When it was disbanded, reports of ill-gotten gains and bribery surfaced. http://www.library.ca.gov/crb/97/03/chapt2.html

But even more worrisome are the histories of the two Wall Street banking firms who submitted proposals for taking over the Louisiana Lottery.

And even though Kennedy said Commissioner of Administration Kristy Nichols has said the lottery won’t be sold, the mere fact that two proposals for just that scenario have been simultaneously submitted by Goldman Sachs and Citigroup cannot be considered as coincidence. Both investment banking firms pointed that similar actions have been taken by Oregon, Florida, Arizona and West Virginia.

And what about the integrity and professional ethics of the two companies?

That’s a fair question, so let’s look at the records.

Goldman Sachs:

Citigroup:

So now the administration suddenly receives “unsolicited” proposals for the sale of the Louisiana State Lottery from two Wall Street banking firms with checkered backgrounds. (But admittedly, it would be difficult to find a Wall Street bank—or banker—these days that is not under a similar cloud.)

A Division of Administration (DOA) source said Bobby Jindal feels that, unlike his desire to sell the remainder of the tobacco settlement in yet another desperate effort to raise one-time revenue, he would not need legislative approval to sell the State Lottery. “We feel legislative approval would be required, but the governor apparently feels otherwise,” Kennedy said.

The State Treasurer added that he felt if Bobby Jindal does intend to sell the State Lottery, “he will wait until after the legislative session has adjourned and then direct the Lottery Corporation to take the action.”

The nine lottery corporation members are appointed to staggered terms by the governor. Kennedy serves as an ex-officio member. Three members, Christopher Carver ($2,000), Heather Doss ($1,000), and Lawrence Katz, combined to contribute $8,000 to various Jindal campaigns since 2003.

 

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