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Archive for the ‘Budget’ Category

Bobby Jindal, the Rhode Scholar who rode into town on the crest of a billion-dollar surplus nine years ago this month, rode out 12 months ago leaving the state wallowing in red ink and now it is learned that he inflicted even more fiscal carnage on his way out the door.

And knowing the way in which he and his final Commissioner of Administration, Kristy Nichols, juggled the books, it’s not at all unreasonable to think that Jindal’s final example of fiscal irresponsibility may well have been an intentional act of political chicanery carried out to buy him time so that his successor would be left with the mess to clean up. (Of course, Kristy didn’t become commissioner until Paul Rainwater left in 2012, but that does not change the fact that a lot of dollars were moved around—swept—before and after she was promoted.)

Hey! It’s not that far-fetched. He did it with the Office of Group Benefits. He did it with higher education. He did it with the LSU Hospital System. Boy, did he do it with the hospital system—with a contract containing 50 blank pages, yet!

By the time Jindal left office, virtually the only state agency left with a shred of credibility and integrity was the office of the Legislative Auditor—and that’s largely because the office has complete autonomy and is independent from outside political pressure, particularly from the governor’s office.

And now, coincidentally, it is that same Legislative Auditor who has issued a damning AUDIT REPORT that reveals a major SNAFU (if that’s truly what it was) in which the Jindal administration “misclassified” a $34.6 million default payment made by Northrop Grumman Ship Systems made in 2011.

The payment was made to Louisiana Economic Development after the shipyard failed to meet required hiring quotas but instead of using the money to pay off equipment the state had financed for Northrop Grumman, the audit says the Division of Administration “swept” the money when it was balancing the budget. As a result, the state has already paid some $2 million in interest and administrative costs on the equipment, and is potentially on the hook for some $6.2 million more.

Bobby and Kristy loved the process of “sweeping” agencies of excess funds lying around in order to try and plug gaping holes in the state budget that dogged Jindal every single year he was governor. “Sweeping” for funds is something like picking up crumbs off the floor in an attempt to gather enough to make a bundt cake.

“Since the debt could not be immediately defeased (a provision that voids a bond or loan) because of the limited prepayment options, the funds should have been segregated into a sinking account for defeasement of the debt, not a statutorily dedicated fund account that could be swept by legislative action,” the audit report says.

But the Louisiana Office of Economic Development (LED), then headed by $300,000-a-year Director Stephen Moret, failed to do that and, presto! The funds got swept by the Jindal Housecleaning Service and as a result, the state “will continue to incur additional interest and administrative costs until the debt (on the equipment) is defeased,” the audit reads. “If not defeased before the Oct. 2022 … the state will incur more than $6.2 million in additional interest and administrative costs.”

LED entered into a Cooperative Endeavor Agreement with Northrop Grumman in the early 2000s. The company had acquired Avondale Shipyard in Jefferson Parish and Northrop Grumman, under the terms of the deal, agreed to maintain employment levels of some 3,500 jobs a year with an economic impact of $1 billion. In return, the state agreed, among other things, to issue bonds to finance more than $34 million worth of cranes and equipment that would modernize the shipyard.

But dreams and schemes are made of fragile things. Northrop Grumman fell short of its job requirements and LED notified the company in early 2011 that it wasn’t living up to its employment obligations. Northrop Grumman agreed to settle with the state for $34.6 million, which represented the acquisition cost of the equipment. It wired the money to LED in March 2011, the report says.

But the state didn’t use the money to pay off the debt on the equipment, nor did it set the funds aside in an escrow account to pay it off in the future. Instead, it “swept” the money into the Louisiana Medical Assistance Trust Fund, was enacted during the 2011 session to help supplement the state’s Medicaid program.

But don’t worry, folks. It’s just another example of the superb financial management of the state’s resources about which Jindal would boast—in Iowa, certainly not Louisiana—during his comical quest for the Republican presidential nomination in 2015, his final year I office.

And now the state finds itself hanging out to dry while trying to come up with that long gone $34.6 million, plus about $2 million in interest and administrative costs.

In a written response to the audit’s findings, Commissioner of Administration Jay Dardenne pointed out that Jindal’s actions, while ill-advised, were nonetheless legal. “The (Jindal) administration’s decision to use the funds for other purposes was not prohibited by the terms of the (agreement) with Northrop Grumman,” he says, noting that the Legislature approved of the financial maneuver.

Perhaps, but we all know the definitions of the legal thing and the right thing are sometimes poles apart. In this case, those responsible knew what that $34.6 million was for and they chose to do what was legal but not what was right.

The question now is does the Office of Risk Management carry excess coverage that would allow the State to make a claim for recovery of the money on the basis of stupidity? Should Jindal, Nichols, and Moret be asked to dig deep into their pockets to come up with the money?

Nah. It’ll never happen.

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Attention State Civil Service employees:

·       There’s no money available for your pay raises for what now, the fifth straight year? The sixth? I’ve lost count.

·       The Office of Group Benefits, by the way, will be increasing your monthly health premiums again.

Attention State Troopers:

·       Gov. John Bel Edwards has signed the necessary documents clearing the way for pay increases as much as 8 percent for you—this in addition to last year’s two pay increasing totaling some 30 percent.

·       And by the way, Gov. Edwards’ signature also clears the way for annual guaranteed pay increases of 4 percent per year for State Police.

The State Police Commission (LSPC) will meet on Thursday (Oct. 13) to make it official.

Attention Department of Public Safety police officers:

·       You are not included.

·       Meanwhile, State Police Superintendent Col. Mike Edmonson’s hunt continues to identify the DPS malcontents who have the audacity to complain about being repeatedly left out in pay raises. Keep your heads down, guys.

The commission also will consider stripping away some of the duties of the commission executive director, according to the commission agenda published on its Web page. This is an obvious effort for Edmonson to seize more power through his puppet, Commission President/State Trooper T.J. Doss. http://laspc.dps.louisiana.gov/laspc.nsf/b713f7b7dd3871ee86257b9b004f9321/0449c2895409d86986258027004fff12/$FILE/10.12.16%20Revised%20Agenda%20(October%2013,%202016).pdf

LouisianaVoice also has learned that the Louisiana State Troopers Association (LSTA) is actively considering amending its by-laws to give it authority to purge its rolls of certain of its members, namely a couple of state police retirees who have questioned certain association activities.

And why not? Obviously pumped by the sham “investigation” of the association leadership’s decision (in open violation of state law) to contribute to political campaigns, including those of former Gov. Bobby Jindal and current Gov. Edwards, the LSTA is feeling pretty confident that it can do whatever the hell it wants with complete impunity.

The commission, you will recall, hired Natchitoches attorney Taylor Townsend, a former legislator, to conduct an in-depth investigation into the decision of certain LSTA leaders to become actively involved in political campaigns by having the LSTA executive director make the contributions in his name and then reimbursing him for his “expenses.” The action, nothing other than money laundering, was cleared by Townsend after he apparently got his marching orders from Edwards who didn’t want any embarrassment after reappointing Edmonson after becoming governor.

Townsend, a major supporter of Edwards and who helped head his transition team after he was elected, subsequent to his quiet recommendation of “no action” regarding the LSTA campaign contributions, was rewarded with appointment to the legal team pursuing legal action against the oil industry to force it to restore the state’s wetlands damaged by drilling. http://www.theadvocate.com/baton_rouge/news/politics/article_354f2c5c-8cc9-11e6-8564-5bb2846bb2e6.html

Townsend, instead of submitting a written report as most investigations require, simply told the commission he recommended “no action,” and the commission complied with no comment. Townsend even admitted he did not admit a recording of an LSTA chapter meeting in which is was admitted that the LSTA violated the law into evidence.

So now that the LSTA has survived that mini-scandal, it wants to rid its membership of retirees who dared question the association’s activities.

One of those retirees, Bucky Millet of Lake Arthur, has become a real burr under the commission’s and the LSTA’s saddles and the LSTA officers desperately want him out. He has attended every commission meeting for nearly a year now and is scheduled to attend Thursday’s meeting. Even worse than attending the meetings, he asks questions and that’s something the State Police hierarchy doesn’t particularly like. 

If the LSPC follows form, it will retreat into yet another executive session where it can discuss a course of action out of earshot of the public.

LouisianaVoice will be there.

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It was only last Nov. 20 that a joint meeting of the House Committee on Appropriations and the Senate Committee on Finance was told that the Office of Group Benefits (OGB) was in improved financial condition.

By April 21 of this year, however, serious discussion had begun about a premium increase for state employees and retirees even as state workers have been told they will not get merit pay raises for the sixth straight year.

OGB Executive Director testified before the joint committee last November that the agency’s fund balance, nearly depleted by the reckless fiscal policies of Bobby Jindal, had recovered to $122 million at the end of the 2015 fiscal year (June 30, 2015) and was projected to be $146 million by the end of the current fiscal year. http://house.louisiana.gov/H_Video/VideoArchivePlayer.aspx?v=house/2015/Nov/1120_15_AP_SenFinance

Neither amount, of course, is anywhere close to the $500 million fund balance accrued by former OGB Executive Director Tommy Teague before he was teagued in April 2011. (for those who may have forgotten, the term coined by a reader for those who dared disagree with Jindal who were quickly fired or demoted).

It is, however, a significant increase from the low balance that came perilously close to double digits in 2014.

Jim Fannin (R-Jonesboro), at the time a member of the House and chairman of the House Appropriations Committee though he had already been elected to the Senate, asked West what the OGB “burn rate” (the amount paid out monthly in benefits in excess of premiums) was.

“It was $16.3 million,” West replied. “It’s now $7 million. Changes that were made have had a positive impact on the fund balance.”

She said OGB has held no public hearings “because there are no planned benefit changes for 2016.”

But wait. Her testimony does not quite jibe with the April presentation of OGB consulting actuary Arthur J. Gallagher & Co. in that OGB ESTIMATING CONFERENCE

At that estimating conference, Gallagher said a 7 percent rate increase would increase the fund balance to $156.9 million by the end of fiscal year 2017 (June 30, 2017), which it said was “within the target range” of $130 million to $240 million.

Gallagher recommended that the new rate increase go into effect in January 2017 “for ease of communication and administration due to annual enrollment timing.”

Gov. John Bel Edwards, then a state representative, openly opposed the 2014 OGB rate increase plan proposed by West and then Commissioner of Administration Kristy Nichols.

https://louisianavoice.com/2014/08/25/louisianavoice-learns-of-jindal-plan-to-force-state-retirees-out-of-ogb-by-raising-members-premiums-cutting-benefits/

Edwards even went so far as to request an attorney general’s opinion on the method by which Nichols and West were attempting to implement the new premium increase and when the Jindal administration learned in advance that the AG’s opinion would be detrimental to its premium increase plan, Nichols quickly shifted gears in saying that the state would go through the required rule-making process spelled out in the Administrative Procedure Act (APA).

That move only served to further invoke Edwards’ ire because, he said, the changes had already been implemented without the required public hearing. https://louisianavoice.com/2014/09/23/smackdown-attorney-general-opinion-on-ogb-proposals-hands-jindal-administration-another-stinging-legal-setback/

Now Edwards finds himself in the ticklish position of having to either uphold his original position of opposing a rate increase, which originally brought him to the attention of state employees as their White Knight, or backing his OGB Executive Director.

As our late friend C.B. Forgotston was so fond of saying: You can’t make this stuff up.

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Editor’s note: The following is a guest column written by James Finney, Ph.D., of Baton Rouge. This was first posted on his blog, Methodical, Musical Mathematician’s Musings, and we felt it was an important essay that addressed issues with the state’s flawed school voucher program. Rather than simply publishing a link to his post, Dr. Finney was gracious enough to allow us to re-post it in its entirety on LouisianaVoice. Dr. Finney is a math teacher with an interest in transparent and effective government.  He grew up in South Dakota but has lived in Baton Rouge for more than 20 years.

His observations should not be interpreted as a criticism of the Catholic Church but rather an objective look at how the state’s voucher program has been mismanaged and vouchers paid in disproportionate amounts to church-affiliated schools by the Louisiana Department of Education.

 

By James Finney, Ph.D.

Did the headline get your attention?  If so, that’s good. When I saw the details of voucher funding for 2014-15, I was startled at how much of the nearly $40 million in spending went to Catholic schools.

The total amount sent to the 131 voucher schools participating in the Student Scholarships for Educational Excellence program in 2014-15 was $39,486,798.20. This figure is reported in a spreadsheet I received from the Department of Education in response to a public record request.  Of that, approximately two-thirds ($26,819,434.44) went to the 76 participating schools that are affiliated with the New Orleans Archdiocese and the Dioceses of Shreveport, Alexandria, Baton Rouge, Houma-Thibodaux, Lafayette, and Lake Charles.

A defender of the voucher program might suggest that most of the private schools in the state are Catholic, so it makes sense that most of the vouchers would be used in Catholic schools. The evidence says otherwise. There are 412 nonpublic schools listed in the state’s 2015-16 School Directory (which I received incidental to another public record request). Of those, 190 are identified by the state as being Catholic. So the Catholic schools are fewer than half the nonpublic schools, but they account for two-thirds of the vouchers. There is no easy way to compare total enrollment (Catholic vs. non-Catholic private schools) since the state does not appear to collect or report private-school enrollment data.

As mentioned earlier, 76 of the 131 voucher schools are Catholic. Of the remaining 55, nearly half (25) have a school name containing the word “Christian” and nine have a name containing “Lutheran”, “Living Word”, “Bishop”, “Baptist”, “Adventist” or “Bible”. And there’s Jewish Community Day School.  So that leaves roughly 20 of the voucher schools that might be secular.  So much for the separation of Church and State.

It’s interesting to rank the voucher schools by total amount paid in 2014-15:  The top six schools account for more than $10 million, and the next 14 for more than another $10 million:

  • St. Mary’s Academy (Girls) (C), Orleans (417): $2,606,160
  • Hosanna Christian Academy (AG), EBR (390): $2,265,944
  • Resurrection of Our Lord School (C), Orleans (466): $2,103,286
  • Our Lady of Prompt Succor (C), Jefferson (208): $1,045,417
  • St. Louis King of France School (C), EBR (182): $1,021,094
  • 506087 Leo the Great School (C), Orleans (191): $1,016,667

Five of the most expensive voucher schools, and 17 of the top 20, are Catholic.  The non-Catholic schools among the top 20 are Hosanna Christian Academy (No. 2 above), Evangel Christian Academy in Caddo Parish (No. 16) and Riverside Academy in St. John the Baptist Parish (No. 20).

One of the voucher schools appears to be a public school: Park Vista Elementary School in Opelousas (St. Landry Parish). It would be interesting to know the story on that school’s participation in the program, and where the students are coming from. The state sent the Parish an average of somewhere around $7,760 each for 19 students, contributing $150,000 to the local system’s bottom line.  Compare that to the $5,570 that the state sent to St. Landry Parish Schools in Minimum Foundation Program (MFP) funding for each student who actually lived in St. Landry Parish.

Two of the schools that received vouchers are not even on the state’s list of nonpublic schools:  Walford School of New Orleans received $17,717, and McKinney-Byrd Academy in Shreveport received $3,566. If they aren’t on the state’s list of nonpublic schools, why did they receive voucher payments? In 2015-16, the SIHAF K12 Learning Academy joined the ranks of voucher schools not on the list of nonpublic schools, and in 2016-17, Weatherford Academy in Westwego will be allowed to offer up to six vouchers and Children’s College in Slidell will be allowed to offer one or two vouchers. Go figure.

State Superintendent of Education John White would like us to believe that at an average of around $5,500 each the vouchers saves the state a lot of money. There’s a flaw in that argument. The average per child state share of the MFP in 2014-15 was only $5,185.  So there might be a savings to local school districts, if those local districts had to educate fewer students with the same amount of local tax revenue. Unfortunately, there’s a huge loophole in the voucher program that allows students who have never (and probably would never) have been enrolled in a public school to get their private educations funded by the state. Maybe that’s why I can’t get a meaningful response to my request to the Department of Education in which I seek the records of how many voucher students had actually “escaped” public schools.

As an example of the fallacy of the vouchers-as-a-bargain-for-the-state argument, consider East Baton Rouge Parish Schools. In 2014-15, the state share of MFP was $4,165 per student. Of the 20 voucher schools within the district’s boundaries, the only school with an average voucher amount below $4165 was St. Francis Xavier School at $4,103.  At least five voucher schools charged the state over $8,000 per student. For two schools, Most Blessed Sacrament and Country Day School of Baton Rouge, both the average tuition per student and the number of students each quarter were (illegally?) redacted from the records supplied by the state, so there’s no way to know how much each school charged the taxpayers per student.

The highest tuition rate ($9,000) was charged by Prevailing Faith Christian Academy in Ouachita Parish for its 31 voucher students. It appears that the schools get to set the rate the state pays for an education over which the state exercises no oversight, as long as there are at least a few families willing to pay that amount out of their own pockets. With no effective state oversight, there is no way to tell just how good (or more likely how bad) a bargain the state is getting by funding private education.

Meanwhile only 91 schools are accepting applications for new voucher students in 2016-17. Perhaps many of the private schools have realized that mixing public money and private education is a bad idea all around.

F 17 of February 20 (voucher school status for 2016-17, and Q1 enrollment for 2015-16)

11 of February 20 – 2014-15 SEE Enrollment and Funding (2014-15 voucher spending)

2014-15-circular-no-1156a—final-budget-letter—march-2015  (Look at “Table 3 Levels 1&2” tab, in columns AP and AT.)

 

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The timeliness of Tuesday’s observation about holding our public officials accountable has come into play less than 24 hours after the post went up.

Today’s (March30) Baton Rouge Advocate revealed that only two of Bobby Jindal’s nine public-private partnership hospital contracts will be funded in the next fiscal year, a move that is certain to adversely affect low-income residents seeking medical care. http://theadvocate.com/news/15333761-70/seven-out-nine-public-hospitals-unfunded-in-next-years-budget-including-baton-rouge-and-lafayette

As severe as the projected cuts are ($58.4 million to Our Lady of the Lake Medical Center in Baton Rouge and $51.2 million to Lafayette General Health Center alone), Gov. John Bel Edwards appointee Department of Health and Hospitals Secretary Dr. Rebekah Gee has been AWOL at hearings before the House Appropriations Committee and the Joint Legislative Committee on the Budget.

The latest crisis is, of course, directly attributable to the short-sightedness of Bobby Jindal and his obsession with privatizing everything in state government that moved—even to the extent of having his lap dog LSU Board of Supervisors approve a contract turning over medical facilities in Shreveport and Monroe to private concerns which contained 50 blank pages.

As things now stand, it appears the only hospitals to be spared the knife (if you will pardon a terrible pun) are the LSU Medical Centers in New Orleans and Shreveport and they survived only because they house LSU medical schools.

The fiscal year 2017 budget calls for a 10 percent funding cut for DHH. That comes to $283 million right off the top but the number escalates to $750 million when the loss of federal matching funds are factored into the equation.

Besides OLOL in Baton Rouge and Lafayette General, other public-private hospitals impacted by the cuts include those in Alexandria, Monroe, Houma, Bogalusa and Lake Charles.

LSU Health Sciences Center Chancellor Dr. Larry Hollier testified that he was worried about the prospect of seeing the public-private arrangements go belly up. OLOL, he said, has 150 residents in training and Lafayette has 82. In all, LSU has about 800 residents scattered about the state.

State Rep. Ted James (D-Baton Rouge) noted that residents of north Baton Rouge, a predominantly black area, have lost both inner community hospitals when Earl K. Long was closed and later torn down and when Baton Rouge General-Mid City closed down its emergency room a year ago Thursday (March 31).

So with all this bad news swirling about, where was the DHH secretary?

Sure, DHH Undersecretary Jeff Reynolds testified but was unable to give clear cut answers to legislators’ questions about how funds saved from Medicaid expansion might be used to offset the DHH shortfall.

But Gee was still MIA. Reynolds said she was absent because of personal issues but that lame excuse was quickly shot down by DHH spokesperson Bob Johannessen told LSU’s Manship School News Service that Gee was spending spring break with her family.

Johannessen’s candor could get him in hot water. The boss never likes it when a subordinate reveals something that puts him or her in a bad light. And face it, this is a pretty bad light. He did recover some lost ground, however, when he added that legislators who were critical of her absence were “grandstanding.”

Well, yeah. That’s what politicians do. So why make it so easy for them?

Rep. Bob Hensgens (R-Abbeville) said he doesn’t recall seeing Gee at any Appropriations Committee or Joint Legislative Committee on the Budget meetings.

Rep. John Schroder (R-Covington) was even more critical. “It’s getting a little troublesome that the secretary doesn’t come,” he said. “The taxpayers want to hear from the boss when we start talking about these kinds of dollars.” http://www.thenewsstar.com/story/news/local/2016/03/29/millions-dollars-cut-state-hospitals/82402336/

Spring break? Whiskey Tango Foxtrot? (the new polite way of saying WTF?)

Edwards appointed Gee, a professor of health policy and management in obstetrics and gynecology at LSU, to head DHH in early January. http://new.dhh.louisiana.gov/index.cfm/page/7/n/55

We just had a DHH secretary (Kathy Kliebert) whose brother-in-law got into hot water with the Louisiana Board of Ethics (does anyone have any idea how difficult that is to do after Jindal revamped the ethics board in 2008?) because he failed to disclose his employment by state Medicaid contractor Magellan Health Services. http://www.theneworleansadvocate.com/news/11707352-123/brother-in-law-of-state-health-secretary

We just got rid of a governor who for eight years steadfastly refused to be held accountable for his action (or inaction, as the case may be).

Her appointment was described as “among the most important appointments Edwards will make in his new administration” by NOLA.com back in January.

At the time of the announcement of her appointment, she said, “I pledge to you I will use all of the skills I’ve used as a physician, a patient, a parent, and a policymaker to do everything I can to improve the lives and health of people in this great state.”

http://www.nola.com/politics/index.ssf/2016/01/john_bel_edwards_dhh_secretary.html

Dr. Gee, those noble words might mean a little more to the taxpayers of this state if you would take your position more seriously and appear at important committee hearings. A public face on an agency in crisis mode is more than important: it’s critical.

It’s all about accountability.

We’ve already had one agency head (Kristy Nichols) to duck out on a committee hearing to attend a boy band concert in New Orleans. We don’t need an encore of that performance. https://louisianavoice.com/2014/10/06/kristy-kreme-knows-one-direction-ducks-out-on-legislative-committee-for-boy-band-concert-at-n-o-smoothie-king-arena/

Going on spring break at a time when the low-income residents of this state are staring at having to overcome even greater hurdles to obtain decent health care sends the wrong message—a message that we’ve become all too familiar with over the past eight years.

And that message is arrogance.

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