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Archive for June, 2012

131-1 vote for transparency and accountability on EZ incentives: but that one vote–Piyush’s veto–prevails

Posted in Auditor, Business, Economy, Exemptions, Incentives, Governor's Office, Legislature, Legislators on June 13, 2012| 1 Comment »

Ninety-five of her fellow House members agreed with Rep. Katrina Jackson (D-Monroe).

Her HB 1104 that would have required state agencies which administer tax credits, exemptions and rebates to report certain information needed by the Legislative Auditor’s Office in determining whether each tax credit, exemption or rebate was “effectuating the purpose they were enacted to achieve” passed 96-0 in the House and by a 35-0 vote in the Senate.

In the end, it appears that Gov. Piyush Jindal had the only vote that counted and he voted no in vetoing the bill, proclaiming that safeguards against abuses were already in place.

Never mind that over the past four years, Louisiana has given away $18 billion in corporate tax exemptions, plus about $300 million per year lost by the repeal of the Stelly Plan.

Almost lost in all of this is an April 25 Legislative Auditor’s report which says in effect that those safeguards Jindal alluded to don’t really work.

The Louisiana Department of Economic Development’s Enterprise Zone program “does not meet the statutory purpose of the program, which is to stimulate business and industrial growth in enterprise zones,” the 17-page audit report says.

The state’s EZ, program is a jobs incentive program that provides Louisiana income and franchise tax credits to businesses hiring at least 35 percent of net, new jobs from one of four targeted groups:

• Residency;

• New employees who heretofore were receiving some form of public assistance;

• New employees below the ninth grade proficiency in reading, writing or math;

• New employees who are unemployable by traditional standards.

Enterprise zones are areas with high unemployment, low income or a high percentage of residents receiving some form of public assistance. A business must create permanent net, new jobs at the EZ site.

Such jobs must be created upon the start date of the project or of construction and either increase current workforce by 10 percent within the first 12 months or create a minimum of five net, new jobs within the first 24 months.

When the state’s Enterprise Zone, or EZ, program was created in 1981, it was designated to stimulate growth in enterprise zones by providing tax incentives to businesses that locate to and operate in those areas. Act 977 of 1999, however, eliminated the requirement that businesses must locate to or operate in an enterprise zone to qualify for EZ incentives, the report noted.

Benefits to the employer include the following:
• A one-time $2,500 credit per new job;

• Rebates of 4 percent of sales taxes on materials, machinery, furniture or equipment;

• The earning of a 1.5 percent refundable investment tax credit.

Businesses may receive EZ incentives for creating part-time jobs, jobs that provide a smaller economic impact and which provide no employee benefits such as health care or retirement plans. This means a business creating a single 20-hour part-time minimum wage ($7.25 per hour) job with an economic impact of $7,450 receives the same EZ incentive as a business creating a single 35-hour full-time minimum wage job with an economic impact of $13,195, plus benefits, the report said.

Moreover, a business is not even required to be located in an EZ and does not have to invest money—only create additional jobs—to qualify.

Louisiana also approves retail businesses, where jobs easily transfer or shift from one business to another with no real gain in the number of jobs, to receive EZ program incentives.

Finally, Louisiana law prohibits the disclosure of the amount of incentives received by businesses and in so doing, denies the public of its right to know how its tax money is spent.

The audit says that during calendar years 2008 (Jindal’s first year in office) through 2010:

• 632 of 930 businesses (68 percent) receiving EZ program incentives were located outside a designated enterprise zone;

• Those 632 businesses received approximately 123.9 million (61 percent) of the $203.1 million in total EZ program incentives granted;

• Approximately $3.9 billion (60 percent) of the $6.5 billion in capital investment by the 930 businesses receiving incentives was located outside a designated EZ;

• Approximately 12,570 (75 percent) of the 16,760 net new jobs created by the 930 businesses were located outside an EZ.

The number and dollar amounts of EZ incentives have increased dramatically since Jindal took office in January of 2008. In 2007, the year before he took office, there were $25.4 million in EZ program incentives approved. In his first two years in office, 2008 and 2009, the amount was about $60 million for each year and in 2010, the amount jumped to $109.6 million, according to information provided by the Louisiana Department of Revenue.

The Department of Revenue could only provide date by fiscal year whereas all other data were from calendar years, thus the difference between the $229.8 million reported by Revenue for the three years of 2008-2010 as opposed to the $203.1 million reported by the Louisiana Department of Economic Development.

Using Revenue’s numbers, the $229.8 million approved during Jindal’s first three years in office eclipsed the previous seven fiscal years’ combined total of $202 million.

“We also determined how Louisiana’s EZ program differs from those in other competing neighboring states—Alabama, Arkansas, Mississippi and Texas,” the audit report said.

Some of the differences included:

• Alabama and Mississippi require businesses to be located in an enterprise zone in order to receive EZ program incentives;

• All four neighboring states exclude retail industries from EZ incentive program qualification;

• None of the four allows businesses to include part-time employees;

• Alabama, Arkansas and Texas require companies to prove the creation of net new jobs before receiving any EZ program incentives. In Louisiana, businesses have up to two years to create the required minimum number of net new jobs;

• Texas requires that the names of businesses that participate in its EZ program and the amounts of incentives each business receives be made public. Louisiana law prohibits the disclosure of the amount of incentives received by each business.

The report suggested that these shortcomings be remedied by corrective legislation.

That, in essence, is what Rep. Jackson attempted to do with her HB 1004 that was approved unanimously in both chambers.

But Gov. Piyush Jindal would have none of it.

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Phil Collins or Cyndi Lauper? Take your pick but we can see Jindal’s ‘True Colors’ with vivid clarity in four vetoed bills

Posted in Exemptions, Incentives, Governor's Office, Legislature, Legislators, Uncategorized, Veto, tagged , , on June 10, 2012| 10 Comments »

But I see your true colors
Shining through;
I see your true colors…
—True Colors (Lyrics by Billy Steinberg, Tom Kelly)

Whether you prefer the Cyndi Lauper or Phil Collins version, nothing more aptly—or more shamelessly—describes the sinister motives of Gov. Piyush Jindal in vetoing four legislative bills than the first three lines of this song.

It seems rather curious that Jindal, such an avowed advocate of openness, would veto SB 629 by Sen. Ronnie Johns (R-Lake Charles) that would have required increased accountability from the state’s Bayou Health and Behavioral Health Partnership programs.

Of course, it might be more easily understood when we learn that Bayou Health contributed $10,000 to Jindal’s gubernatorial campaigns – $5,000 in 2003 and another $5,000 in 2009.

It would also appear rather disingenuous for the governor to veto a bill calling for the convening of a task force to study wage disparities between men and women in the public sector.

But it is simply unconscionable for a governor who purports to support transparency and accountability to veto HB 1104 that would have done just that.

It likewise is two-faced, duplicitous and smacks of a blatant double standard for Jindal to veto HB 1106. The bill, after all, provided for tax rebates, something we thought equated to an economic Holy Grail in the eyes of this governor.

But I see your true colors
Shining through;
I see your true colors…

Both HB 1104 and HB 1106 were authored by State Rep. Katrina Jackson (D-Monroe).

Both bills, by themselves, did far more for transparency, accountability and even-handedness than everything Jindal has done in his entire four-plus years in office.

Both bills were passed unanimously by the House, both by votes of 96-0 with nine absences.

Not voting on HB 1104 were Speaker Chuck Kleckley (R-Lake Charles), Jerry Gisclair (D-Larose), Hunter Greene (R-Baton Rouge), Bob Hensgens (R-Abbeville), Bernard LeBas (D-Ville Platte), Joseph Lopinto, III (R-Metairie), Harold Ritchie (D-Bogalusa), Joel Robideaux (R-Lafayette) and Patricia Smith (D-Baton Rouge).

Those absent for the vote on HB 1106 were Jared Brossett (D-New Orleans), Gordon Dove (R-Houma), Brett Geymann (R-Lake Charles), Gisclair, James Morris (R-Oil City), Kevin Pearson (R-Slidell), John Schroder (R-Covington), Scott Simon (R-Abita Springs) and Kirk Talbot (R-River Ridge).

HB 1104 also passed unanimously in the Senate (35-0 with four absentees) and only four senators voted against HB 1106. Absent on the HB 1104 vote were Sens. Jack Donahue (R-Mandeville), Jean-Paul Morrell (D-New Orleans), Ben Nevers (D-Bogalusa) and Mike Walsworth (R-West Monroe).

Voting against HB 1106 in the Senate were Robert Adley (R-Benton), Conrad Appel (R-Metairie), Dan Claitor (R-Baton Rouge) and Donahue. Absent were Jody Amedee (R-Gonzales) and Barrow Peacock (R-Bossier City).

All four were good bills.

All four were vetoed by Piyush “I have the job I want” Jindal.

But I see your true colors
Shining through;
I see your true colors…

HB 1104 would have required that state agencies which administer tax credits, exemptions and rebates to report certain information needed by the Legislative Auditor’s Office in determining whether each tax credit, exemption or rebate was “effectuating the purpose they were enacted to achieve.”

“More than half of Louisiana’s (annual) revenue is expended to pay for these credits, rebates and exemption,” Jackson said after being informed of the vetoes. “It is important that we review them to determine whether the state is truly benefitting.”

Louisiana has granted more than $18 billion in corporate tax exemptions over the past four years, according to information obtained from state records. Jackson said she is attempting to ensure that the state is getting its money’s worth in jobs and economic development.

Jindal disagreed.

But I see your true colors
Shining through;
I see your true colors…

HB 1106 would have allowed taxpayers who donate to public schools to receive tax rebates.

“This bill supports public schools and has a $10 million statewide cap,” Jackson said of her bill.

After being amended in committee, the bill would have offered the following tax rebates for those who donated to public schools for the purpose of tutorial, curriculum, books, technology, Saturday school, etc.:

• 25 percent tax rebate for donations to a “C” school;

• 50 percent tax rebate for donations to a “D” school;

• 75 percent tax rebate for donations to an “F” school.

“The only bill that sits on the governor’s desk which truly helps our public schools to receive much-needed resources will not see the light of day,” Jackson said. “This is truly a blow to public education.”

The veto obviously discourages donations to public schools in favor of their non-public counterparts and comes on top of requirements that local school superintendents now must answer directly to Baton Rouge instead of their local school boards that hired them. It also is the equivalent to piling on in that local school funds under the state’s Minimum Foundation Program, a formula used to provide state funding to local school systems, can be diverted to benefit students transferring to charter schools—even if the charter schools are in another parish.

So, not only does Jindal’s American Legislative Exchange Council (ALEC)-inspired educational reform legislation dilute local financial support of public schools, any attempt by individuals or corporations to assist struggling public schools is now officially discouraged by this administration.

One reader wrote of HB 1106: “If anyone ever questioned that Gov. Jindal is placing non-public schools over public schools, and treating them inequitably, his punitive legislation during the session, followed by this veto, is the final straw.

“According to Jindal, rebates to non-public schools are o.k. as passed by the legislature but rebates to public schools are vetoed ‘because there’s no provision in state budget for rebates.’”

Apparently, however, when it comes to non-public schools, there is a provision in the state budget for rebates.

“Shame on our governor for such a petty, discriminatory, embarrassing action,” the reader wrote.

It remains to be seen if the legislature has the courage to override the vetoes of Jackson’s bills.

If history is any indication, it won’t happen. One need look no further back than 2011 when the legislature approved a renewal of the cigarette tax only to have Jindal veto it because he was opposed to “new” taxes. While it is still a mystery how he could consider a tax renewal as a “new” tax, the legislature cratered, folded like a cheap suit, in its attempt to override Piyush’s veto.

But I see your true colors
Shining through;
I see your true colors…

Senate Bill 577 by Sen. Karen Carter Peterson (D-New Orleans) would have established the Louisiana Equal Pay Task Force to study and make recommendations relating to equal pay for women in the public sector in Louisiana.

It, too, passed unanimously in the Senate with only six absences—Appel, Norby Chabert (R-Houma), Peacock, Jonathan Perry (R-Kaplan), Greg Tarver (D-Shreveport) and Walsworth.

SB 577 passed in the House by a 71-17 vote.

The 17 voting against the measure in the House, all Republicans, included Reps. Stuart Bishop (R-Lafayette), Richard Burford (R-Stonewall), Raymond Garofalo, Jr. (R-Chalmette), Geymann, Greene, Kenneth Havard (R-Jackson), Lowell Hazel (R-Pineville), Cameron Henry (R-Metairie), Hensgens, Anthony Ligi, Jr. (R-Metairie), Lopinto, Nick Lorusso (R-New Orleans), John Morris (R-Monroe), James Morris, Steve Pylant (R-Winnsboro), Alan Seabaugh (R-Shreveport), and Talbot.

Which begs the question of why any female voter could, in good conscience, ever support Piyush Jindal or any of the Misogynistic Seventeen for even the most menial public office.

But I see your true colors
Shining through;
I see your true colors…

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Notable Quotables (in their own words)

Posted in Business, Economy, Governor's Office, Notable Quotables, Revenue, Taxes on June 6, 2012| 5 Comments »

“Over the last four and a half years, we have outperformed the national and southern economies, and in order to continue to attract business investment, we need to stay competitive with the rest of the country and the world.”

–Gov. Piyush Jindal, on signing into law two bills to “increase economic competitiveness” by creating a corporate headquarters relocation program.

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Another high negative for Louisiana: new report says state ranks third highest in disparity between rich and poor

Posted in Business, Economy, Governor's Office on June 6, 2012| 12 Comments »

Add another negative to the list for Louisiana.

While Gov. Piyush Jindal trots all over the country telling everyone who will listen about the state’s robust economy, the low unemployment rate and the incredibly favorable business climate, a national study has revealed that Louisiana has the third widest gap between rich and poor, roughly equivalent to some Third World countries.

The report, by 24/7 Wall Street, employs the widely accepted Gini coefficient which measures income inequality to arrive at its results. The Gini coefficient is a number between zero and one with zero representing perfect income equality and a place with a score of one would have only extremely wealthy and extremely poor people, with no middle class.

The state Gini coefficients range from .419 in Utah to .499 in New York, indicating that all 50 states have relatively high income inequality compared to the rest of the world.

The most alarming aspect of the latest results is the trend toward a widening gap, the report indicates. In 1967, the Gini coefficient for the U.S. was .397. Today, it is .469, evidence that America’s income divide has become greater.

The widening gap between rich and poor has been a growing issue between Republicans and Democrats on both the national and state levels.

Many of Jindal’s proposed programs, critics say, would do much toward widening that breach even further. The privatization of state agencies would result in layoffs of state employees and Jindal’s proposed retirement reforms would have sharply reduced state pensions. Cuts to higher education have resulted in further layoffs.

New York, with a Gini coefficient of .499, had the largest disparity between rich and poor despite having the sixth highest (7.4 percent) percentage of households earning $200,000 or more per year. At the same time, New York’s 14.1 percent of population living below the poverty line was 21st highest in the nation.

Louisiana, with a Gini coefficient of .475, was third behind Connecticut’s .486.

Even though the state’s unemployment rate was lower than the national average and the lowest on the list, Louisianans are limited in other areas that limit upward mobility, the report says. Only 82.5 percent of Louisiana residents older than 25 had a high school diploma and only 21.8 percent had a college degree.

And while the unemployment rate is comparatively low, 15.3 percent of the state’s residents received food stamps and the Louisiana median income is 10th lowest in the nation. The 17.7 percent of the state’s population living below the poverty line was fifth lowest in the U.S., the report shows.

Louisiana’s Gini coefficient of .475 is comparable to those of Ecuador (.469), Madagascar (.475), Nepal (.472) and Rwanda (.468), according to a worldwide ranking of Gini coefficients by the CIA.

Any comparison of Louisiana to those countries in misleading, however, because the Gini coefficient takes into account only the disparity between rich and poor and not median or household income.

Other states named as having income large gaps between rich and poor in the report, in order, include:

• Massachusetts (.475);
• Florida (.474);
• Alabama (.472);
• California (.471);
• Texas (.469);
• Georgia (.468);
• Mississippi (.468)

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Jindal campaign fund update: 1 bank board member says none were aware of contributions made in their names

Posted in Campaign Contributions, Ethics, Governor's Office, Uncategorized on June 5, 2012| 4 Comments »

At least one of the 11 board members of the failed Central Progressive Bank of Lacombe was unaware that a $5,000 campaign contribution had been made in his name to Gov. Bobby Jindal during his successful run for governor in 2007, LouisianaVoice has learned. He added that he was sure none of the other board members knew of the contributions made in their names as well.

Richard Blossman, Jr., of Lacombe is accused in a federal bill of information of funneling $55,000 through the Lacombe bank into Jindal’s campaign.

Central Progressive, after being designated as a “troubled bank” last year, was taken over in November by First NBC Bank of New Orleans.

The federal Bill of Information says that Blossman, while CEO of Central Progressive Bank, gave each of his 11 board members a $5,000 bonus. In reality none of the $5,000 bonus payments ever went to the board members, according to Raphael Goyeneche, president of the New Orleans Metropolitan Crime Commission.

“The defendant well knew the ‘bonus’ was to funnel illegal political contributions and was not a bonus, as he caused it to be inscribed in the board minutes,” prosecutors said.

“That is a felony,” Goyeneche said.

Immediately after the bonuses were announced by Blossman, federal prosecutors say 11 checks of $5,000 each were sent to Jindal’s campaign in the names of each of the individual board members.

The limit for political contributions is $5,000. But with all of the board members “donating” their $5,000 of Central Progressive Bank funds, the donation came to $55,000.

Additionally, the Louisiana Board of Ethics last month said Jindal received $40,000 in campaign contributions from River Birch, Inc. when the company formed six “straw man entities” to launder illegal donations to Jindal.

River Birch Landfill had its offices in Gretna raided by federal agents in September of 2010 after landing a controversial $160 million garbage disposal contract with Jefferson Parish in 2009.

Curiously, Timmy Teepell, who ran Jindal’s 2007 campaign, said the governor would not return any of the tainted $95,000.

“We accept every contribution in good faith and in accordance with the law,” he sniffed.

So, while there are laws against receiving stolen goods, and even as Louisiana legislators fret over the selling of art by Angola death row inmates, there apparently are no restrictions on politicians keeping laundered campaign money.

When asked if Blossman received anything in return for the donations, Teepell said, “No, absolutely not. Everybody who donates to our campaign gets the same thing and that is good government.”

When LouisianaVoice attempted to question the board members, no one answered phone calls at seven of the numbers called, two numbers had been disconnected and the first board member contacted, Raymond Fontaine of Slidell, said he had no comment.

At another, LouisianaVoice at first reached Douglas Ferrer, Sr., father of board member Douglas Ferrer, Jr. The elder Ferrer referred to Central Progressive as “that no-good bank” and added that his son was unaware of the contribution made in his name.

When contacted, Douglas Ferrer, Jr. of Lacombe at first explained that he had been involved in litigation against the bank and that the settlement agreement contained a non-disclosure clause that prohibited him from commenting. When told that his father had said he knew nothing of the campaign contribution, he then said, “My dad doesn’t lie. You can take that for what it’s worth.” Given the fact his father had already commented, the younger Ferrer finally said, “I think none of the others were aware of the contributions.”

Besides Fontaine, Ferrer and Blossman, the other eight board members who ostensibly made $5,000 campaign contributions to Jindal, all on April 6, 2007, according to Jindal’s campaign finance report, included Welton Brumfield, Jr., address unknown, Charles Law Ponder of Kentwood, Edward Amar, Jr., of Tickfaw, Brandon Faciane of Slidell, Ralph Menetre of Covington, Jim Venezia, Sr., of Pearl River, Henry Powell, Jr. of Lacombe and Mark Perrilloux of Ponchatoula.

The Louisiana Office of Financial Institutions, which provided the names of the board members pursuant to a public records request by CNS, noted that Menetre was elected to the board on January 29, 2007 and that Perrilloux left the board on December 10, 2007.

Jindal paid a $2,500 ethics fine less than a month after taking office in 2008 for campaign violations when his campaign failed to timely disclose more than $100,000 spent on his behalf by the state Republican Party.

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