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Archive for the ‘Budget’ Category

J. Ryan Hudson and Time magazine had it right

Posted in Budget, Campaign Contributions, Economy, Governor's Office, House, Senate, Legislature, Legislators, Public Records, Taxes, Transparency on October 21, 2010| 1 Comment »

J. Ryan Hudson made the most of his 15 minutes.

Just in case you haven’t been paying attention lately, J. Ryan Hudson is the LSU Student Body president who wrote the now-famous op-ed letter to the Keene (New Hampshire) Sentinel in which he opined that Gov. Bobby Jindal “is spending more time in your state than the one he was elected to represent.”

As class sizes at LSU have grown, higher education has undergone $280 million in budget cuts over the past two years and is facing another $290 million in cutbacks, prompting Hudson to write that Jindal should pay more attention to state budget shortfalls than spending time campaigning for Republican candidates in other states.

“On behalf of the students whose hopes for a brighter future will soon be crushed, I beg you to return to Louisiana and fix your state’s serious problems,” Hudson said. “You’ve neglected your constituents long enough.

“You’ll have a much better chance of becoming president if you save, instead of destroy, Louisiana’s universities,” he said, implying that Jindal may have a not-so-secret agenda aimed at seeking higher office.

To be sure, Hudson’s letter was brash, maybe a little rude, and certainly timely.

And, sadly, all too accurate.

Jindal, rather than anchoring himself to the Capitol’s fourth floor office, chooses to globetrot on behalf of Republican candidates most in Louisiana have never heard of while refusing to endorse Republican candidates in Louisiana. One can understand his reluctance to speak out in favor of David Vitter in his Senate race against Charlie Melancon given Vitter’s political baggage, but Secretary of State Jay Dardenne can’t wrangle an endorsement from Jindal even though Dardenne’s TV spots stress his wish to work with Jindal in promoting the governor’s programs.

Even more difficult to comprehend is Jindal’s reluctance to tackle state finances head-on. After all, hasn’t he been telling us over and over that he has the job he wants? If that’s true, then he should stay home and do that job.

Oh, sure, he pays lip service to reducing, or streamlining, state government. But as the state budget turns an ever-darkening shade of red, he stands adamant in his refusal to address a tax increase in the wake of dwindling state revenues.

Tax increases are never pleasant, especially with statewide elections only a year away, but neither is the prospect of a state becoming insolvent. That’s a very real prospect.

And Jindal, along with an out-of-control legislature, must shoulder the blame. The state had money, but the legislature, drunk with one-time revenue, went spend-crazy this year and Jindal wouldn’t—or couldn’t—summon the courage to rein in the insanity with his line item veto power.

Time magazine describes half the states as having joined the federal government “in the fiscal sick ward” as high unemployment and the recession combined with drastically reduced income to deliver a weakened economy that appears at times to be spiraling out of control.

Barely into its new fiscal year, Louisiana is already facing a $100 million deficit, thanks to depressed oil prices and reduced tax revenues, the magazine said. To deal with the crisis, the state has frozen hiring, deferred maintenance on state buildings and canceled $500,000 in new equipment. Legislators, meanwhile, are talking tax increases. “We’ve run out of windfall from Washington,” the state budget director lamented. “We’ve run out of exotic tax measures. Our economy has run out of gas, and in Louisiana, when you run out of gas, you run out of money.”

Sound familiar? The by now all too familiar theme should resonate with anyone who follows Louisiana politics.

But that story actually ran in Time on Nov. 8, 1982—almost exactly 28 ominously prophetic years ago when Ralph Perlman was budget director and Dave Treen was governor. Louisiana has held seven elections and has chosen five new governors since then. The more things change, it seems, the more they stay the same.

Today, nearly three decades after that story, Louisiana is wrestling with a $108 million budget deficit less than four months into the 2011 fiscal year than began on July 1. Even worse, the administration is anticipating a staggering projected shortfall of up to $2 billion next year.

It’s not as if the administration and legislators were not forewarned: Greg Albrecht, the chief economist for the Legislative Fiscal Office, said in May that he didn’t expect state income tax revenue to meet earlier forecasts.

Now, Gov. Bobby Jindal finds himself trying to find a way to cut state budgets yet another 35 percent—when he’s in the state, which is becoming more and more infrequent. Some legislators said they see the present fiscal malaise as a chance to downsize government in lieu of falling back on the usual accounting tricks to balance the budget.

Sen. John Alario, D-Westwego, called the situation “a grand opportunity for us to scale back government.” Alario, the legislator primarily responsible for the often-criticized state’s $22 million purchase of the financially troubled Players Tournament Club golf facility in Marrero, said downsizing “could never be done if you didn’t have to be faced with this situation.”

Jindal, in lieu of raising taxes, seems intent on slashing higher education and health care. Meanwhile, he keeps popping up in Florida, New Hampshire, New York, Missouri, Georgia, California, Ohio, and Minnesota to campaign for GOP candidates.

Legislators say the anticipated budgets will close hospitals for the poor and cripple higher education while college presidents call the proposed cuts “catastrophic.” Former Gov. Kathleen Blanco says a 35 percent cut would effectively shut down government services and that education would undergo a “meltdown to mediocrity.”

Jindal says spending cuts are preferable to higher taxes and that additional privatization may be in store as a means to save the state money.

He missed his chance to cut spending at the end of the last regular legislative session when he could have exercised his line item veto power to bring the Capital Outlay bill more into line. He had the opportunity to veto more than $450 million in Priority One spending but chose to veto only $9.4 million—all in Priority Two, or second year spending. Among the Priority One appropriations in the Capital Outlay Bill that were allowed to stand were:

• $800,000 for land acquisition for the proposed Allen Parish Reservoir;
• $1.4 million for the proposed Bayou Dechene Reservoir in Caldwell Parish;
• $2.6 million for the Washington Parish Reservoir Commission Feasibility study;
• $17.2 million for Bayou Segnette Festival Park land acquisition and sports complex improvements;
• $28 million for modifications to the Performing Arts Center in Jefferson Parish;
• $2 million for construction of a playground Basketball Gym in Orleans Parish;
• $1.8 million for construction of the Little Theatre of Shreveport;
• $2.6 million for a new Westbank YMCA in Algiers;
• $2 million for the New Orleans Music Hall of Fame;
• $6 million for construction of a new courthouse in Baton Rouge;
• $2.8 million for the Dryades YMCA in New Orleans;
• $5.4 million for the Red River Waterway Commission;
• $7.7 million for the renovation of the Acadiana Center for the Arts in Lafayette;
• $2.5 million for improvements to the Coteau Water System in St. Martin and Iberia parishes;
• $2.4 million for the Union Parish Law Enforcement District;
• $1.8 million for construction for the Robinson Film Center in Caddo Parish;
• $12 million for construction of a convention center complex in Shreveport;
• $3.8 million for a new tennis center in Orleans Parish;
• $4.7 million for construction of the Louisiana Artist Guild Arts Incubator in New Orleans;
• $26.5 million for expansion and construction of the National World War II Museum in New Orleans;

Millions more were spent on construction projects that included recreational facilities, councils on aging, courthouses, sheriffs’ offices, jails, drainage projects, work on parish and municipal road and street construction projects, community centers, and water systems.

As if that were not enough, when legislators found extra money lying around, as they always seem to do during each legislative session, the House quickly pushed HB 76 through, appropriating an additional $33 million in local pork projects. Some of those expenditures:

• $150,000 for the Louisiana Political Hall of Fame in Winnfield;
• $500,000 for the Louisiana Endowment for the Humanities;
• $500,000 to “organizations which assist small towns and rural areas with their water and wastewater systems;”
• $250,000 for construction of an animal shelter in St. Charles Parish;
• $1 million to the Lafayette Parish Consolidated Government for infrastructure construction;

Of that $33 million, Jindal vetoed only 32 projects totaling less than $2.5 million.

That’s a sign of a weak governor—one who lacks the singular courage to scale back reckless spending by legislators when the very future of the state depends on it, demands it. As a result, higher education and health care will continue to suffer while golf courses, community centers, baseball parks, sheriffs’ offices, ground water reservoirs, and other local projects will flourish while legislators take the credit and bask in the gratitude of constituents back home.

The name of that 1982 Time magazine article that chronicled economic hard times for state governments?

“Living Beyond Their Means.”

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State slow in revealing purchase of $9 million golf course

Posted in Budget, Contract, Contracts, Golf Courses, Governor's Office, Public Records, Transparency, tagged on October 12, 2010| 3 Comments »

When the State of Louisiana purchased the assets of financially troubled Tournament Players Club (TPC) golf club in Marrero in Jefferson Parish on September 10, 2009, it’s no wonder the Division of Administration did not inform the State Land Office for a full year.

State Land Office (SLO) Administrator Charles St. Romain said his office is responsible for the identification, administration and management of state public lands and waterbottoms, but that he was unaware that the state had purchased the TPC facilities until September of this year.

The Act of Sale, dated September 10, 2009, was signed by then-Commissioner of Administration Angele Davis. The purchase price was $9,150,000. Davis resigned in August of this year.

Marrero Land and Improvement Association, headed by real estate developer Buckner Barkley, a financial backer of the Louisiana Republican Party and Gov. Bobby Jindal, donated about 250 acres of land in 2001—during the administration of then-Gov. Murphy Foster. The state in turn spent about $12.8 million to pay for the cost of building the course which hosts the Zurich Classic PGA Tournament each year.

The state then leased the property to TPC and Foster agreed to a deal whereby the state guaranteed a minimum number of rounds of golf at the facility each year. The rounds were to be purchased through hotel concierges in New Orleans but the hotel industry was not informed of the deal initially and the state found itself shelling out $5.1 million in the club’s very first year.

The club continued to lose money and in 2009, the state purchased the facility. The Division of Administration in November of 2008, more than nine months before the execution of the sales agreement, entered into an agreement with the Louisiana Stadium and Exposition District (LSED) to administer the club. LSED also manages the Louisiana Superdome.

LSED in turn executed a “golf facility management agreement” with TPC Louisiana under which TPC would manage the club for 30 years for a minimum of $100,000 per year, plus an incentive management fee of 2.5 percent of gross revenues and 10 percent of net revenues not to exceed $150,000 per year with annual increases not to exceed 3 percent per annum. That agreement was dated September 10, 2009, the same date as the sales agreement between TPC and the state.

No explanation was given as to why the state bailed out a failing facility for nearly $9.2 million and immediately turned the operation of that facility back over to the company that had been running it at a financial loss.

Even more puzzling is why the state saw the need to invest in a golf course in the first place. Or in the case of the Louisiana Legislature, four golf courses. The state is also financing the construction of courses in Lake Charles and Alexandria and it assumed operation of Black Bear Golf Course at Poverty Point in 2006. Since 1997, the state has spent in excess of $141 million on golf courses—all at a time when the state budget is hemorrhaging red ink and designer golf courses are on the decline in popularity and shutting down all over the country.

The Louisiana Municipal Police Employee Retirement System (MPERS) in October 2009 lost its $24 million investment in the Hal Sutton designed Boot Ranch Development golf club in Fredericksburg, Texas. That would be bad enough if that were the only such loss by MPERS, but it’s not. The retirement system has also dropped $12.1 million on Olde Oaks Golf Club in Haughton (and still losing $500,000 a year) and $3.1 million on The Club at Stonebridge, also in Bossier Parish. MPERS also lost an additional $15.7 million on its purchase of and improvements to the development of Olde Oaks properties, bringing its total losses just on golf courses to more than $39 million.

Golf courses that have recently closed in Louisiana include:

• The Bluffs Country Club in St. Francisville, designed by Arnold Palmer and which opened in 1988, closed in March of 2009;
• Sherwood Forest Country Club, Fairwood Country Club, and Shenandoah Country Club in Baton Rouge;
• Santa Maria Golf Course in Baton Rouge, designed by Robert Trent Jones (closed for a year before being re-opened by East Baton Rouge Parish);
• Carter Plantation Golf Club in Springfield in Livingston Parish, designed by David Toms, while not closed, has not performed up to expectations and is currently mired in litigation;
• Belle Terre Golf and Country Club in LaPlace in St. John the Baptist Parish (closed in August of this year).

In Georgia, the Fairways of Canton has closed, leaving that city on the hook for annual payments of $300,000. Other golf courses that have closed in Georgia include courses in Jones Creek, Tucker, and Roswell. In all, at least 15 golf courses in Georgia currently are on the market.

A quick internet check revealed clubs for sale all over the country, including three in Louisiana (Florien, Ethel, and Monroe). Others on the market in neighboring states include four each in Mississippi and Alabama, three in Arkansas, and a dozen in Texas.

It remains to be seen what, if anything, the state will realize on its investments in the four golf courses but should any or all of them fail, it’s pretty certain some hard questions will need to be asked—and answered.

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Gov. Jindal’s cost saving plan for Louisiana

Posted in Auditor, Budget, Contract, Contracts, Governor's Office, Legislature, Legislators on October 11, 2010| 2 Comments »

Once upon a time the State of Louisiana owned a vast scrap yard in the middle of nowhere.

The Legislature said, “Someone may steal from it at night.”

So they created a night watchman position and hired a person for the job.

Then the Commissioner of Administration said, “How does the watchman do his
job without instruction?”

So they created a planning department and hired two consultants, one person
to write the policy manual, and one to do time studies.

Then the governor said, “How will we know the night watchman is doing the tasks correctly?”

So they contracted with a Quality Control expert and hired two people:
one to do the studies and one to conduct motivational workshops.

Then the Legislative Fiscal Office said, “How are these people going to get paid?”

So they created two positions: an HR director and a payroll officer, then hired two clerks.

Then the Inspector General said, “Who will be accountable for all of these people?”

So they created an administrative section and hired three people: an
Administrative Officer, an Assistant Administrative Officer, and an in-house
Legal Counsel.

Then the Legislative Auditor said, “We’ve had this agency for one year
and we’re $918,000 over budget. We must cut back.”

So they laid off the night watchman.

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Who needs education or health care? We got golf.

Posted in Budget, Economy, Golf Courses, Governor's Office, Transparency on September 6, 2010| Leave a Comment »

As the Jindal administration considers even more budgetary cuts—as much as 35 percent—in an attempt to offset the effects of an anticipated fiscal free fall estimated to be as much as $2 billion next year, the sacrificial lambs of higher education and health care are once again being led to the altar for the ritualistic bloodletting.

Meanwhile, as is usually the case when the legislature is faced with budgetary shortfalls, many other spending programs by lawmakers go on unabated. As puzzling as it must be to taxpayers constantly bombarded with bad news out of Baton Rouge, the elected representatives and senators just can’t seem to bring themselves to exercise the fiduciary discipline to keep reckless spending in check.

They are, to use a time-worn metaphor, the foxes guarding the henhouse.

A good example of the leadership void can be found in the way the legislators spend unexpected financial windfalls. When agencies fail to spend all of their budgets during a fiscal year, the excess funding reverts back to the state treasury where lawmakers are waiting like so many vultures to pounce on it for local pork barrel spending.

Take this year’s HB-76, the so-called “ancillary appropriations bill.” As soon as the extra money was “found,” legislators, instead of allocating all the new money to education and health care, poured $33 million into local funding projects like convention centers, municipalities and parishes, arts councils, councils on aging, and museums.

As irresponsible as all this may seem, it pales in comparison to what the state has spent on golf courses, baseball parks, and other recreational complexes down through the years.

Because figures prior to 1997 are unavailable, this post will address only those expenditures dating back to that year. But those 14 years should be sufficient for even the casual reader to detect a disturbing trend in spending priorities in this state.

Since 1997, the state of Louisiana, through the legislative process, has deemed it necessary to spend $141 million on golf courses.

One doesn’t have to be a math wizard to see that that averages out to $10 million per year. And that doesn’t include various university golf courses. These are private golf courses, one and all.

Another $18.5 million was spent during that same time frame on baseball parks, including nearly $4 million on a baseball stadium in Baton Rouge, which has no baseball team.

The real irony in all this can be found in two 2007 appropriations for the city of Westlake, near Lake Charles. That year, $6.12 million was appropriated in Priority 1 funding for golf course planning and development. That same year, $100,000 in Priority 2 funding and $800,000 in Priority 5 funding was appropriated for planning and construction of a new emergency response center for Westlake, which was putting up $900,000 in local matching funds.

The difference in Priorities 1, 2, and 5? Priority 1 means that the fund are virtually a certainty. Priority 2 means next year. Maybe. Priority 5 means lots of luck, you may get the money and you may not.

Over the 14 years in question, the Westlake golf club received nine separate Priority 1 appropriations totaling $37.96 million.

Not to be outdone, the Tournament Players Club in Jefferson Parish got seven separate appropriations totaling $48.2 million. City Park Golf Complex in New Orleans, with seven Priority 1 appropriations, got $33.8 million.

Other golf course expenditures included:

• $16.1 million for the England (Airpark) Golf Course in Rapides Parish;
• $600,000 for the Bayou Segnette Golf Course in Jefferson parish;
• $2.7 million for development of a golf resort at Toledo Bend;
• $2 million to promote the Audubon Trail golf courses in efforts to promote more rounds;
• $16,000 for the Delhi Municipal Golf Course;
• $301,000 for the Black Bear Golf Club at Poverty Point (part of the Audubon Trail);
• $250,000 for the 2002 Compaq Golf Tournament in New Orleans;
• $550,000 for junior golf facilities and the Fore Kids Foundation golf tournament;
• $250,000 for promotion of the Classic Foundation golf tournament in New Orleans;
• $1.7 million for the Louisiana Junior Golf Commission.

The state also spent an additional $5.25 million on the LSU golf course, part of which was relocating four holes on the course, money some might suggest would come from the LSU athletic department.

Of course, golf is not the only interest of the legislature. It also has appropriated funding for such projects as the Hot Air Balloon Championship in Baton Rouge ($50,000), the RedFish Tour ($75,000), the National Baptist Convention in New Orleans ($75,000), and the Bayou Classic football game between Southern and Grambling universities ($100,000), the Zephyrs’ baseball stadium in Jefferson Parish ($4.68 million over four years), a baseball complex for Iberia Parish ($7.34 million over eight years), improvements to a Baton Rouge baseball stadium with no tenant ($3.95 million over three years), construction of baseball fields at Negreet and Killian high schools ($35,000), and construction of a baseball-softball complex in Rapides Parish $2.73 million).

The Black Bear Golf Course at Poverty Point was constructed on private property owned by the Poverty Point Development Corp. under the auspices of the Louisiana Department of Transportation and Development as part of a retirement community developed by State Sen. Francis Thompson and his brother, Mike Thompson. Once completed, the golf course was donated to the Louisiana Office of Culture and Tourism with the proviso that a “professional manager” be appointed to administer the day to day operations of Black Bear. The manager appointed was Mike Thompson.

The Tournament Players Club Louisiana Golf Course (TPC) has proved to be the real money pit for the state. Promoted by Sen. John Alario of Westwego and developer Buckner Barkley, Jr., TPC has been a money loser from the outset. The course was developed in an effort to pull a major PGA tournament into Jefferson Parish.

The state, during the administration of Gov. Mike Foster, entered into an agreement with TPC and Marrero Land and Improvement Association whereby the state guaranteed a minimum number of rounds played. The rounds were required to be booked through New Orleans hotel concierges promoting the course. The hotel industry initially was not informed of the agreement and was unable to meet booking quotas.

The annual Zurich Classic is played at TPC and the fear was that it would lose the tournament and should that have happened, the property, with no professional tournament facilitator, would revert to Marrero Land. To avert that occurrence, the Superdome Commission and commission chairman Doug Thornton negotiated a new deal whereby the state would pay off TPC’s $10 million indebtedness and take ownership of the property in exchange for a six-year commitment from the PGA to keep the Zurich Classic there.

While some legislators maintain the state should not be in the golf business, proponents of the arrangement insist it is the best option for the state, that it is good for the economy.

Likewise, supporters claim that the golf courses, such as Black Bear, are good for economic development and make the state’s investments a good idea.

Manufacturing plants, Wal-Marts, and job-intensive industry also make good economic sense. So why doesn’t the state just go out and buy a dozen or so Wal-Marts, open a few car dealerships and manufacturing plants and give people jobs instead of taking over golf courses and putting a legislator’s relative in charge?

Don’t be surprised when next Spring, one of those tiny Smart Cars pulls up in front of the State Capitol and 144 clowns, complete with orange wigs, big shoes, red noses, seltzer bottles, pies, and horns, pile out, run up the steps of the Capitol and into the Senate and House chambers to call the 2011 legislative session into disorder.

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Read the bill, Mr. Speaker, read the bill

Posted in Budget, Economy, Governor's Office, House, Senate, Legislature, Legislators, Transparency on September 5, 2010| 1 Comment »

At a meeting of the Joint Legislative Committee on the Budget during the legislative session earlier this year, House Speaker Jim Tucker popped in long enough to admonish fellow legislators (primarily state senators, it’s presumed) to “read the (state) Constitution.”

His remarks, however condescending they may or may not have been, were prompted by a running dispute he was having with Senate President Joel Chaisson in particular and the senate in general.

“Read the Constitution.” Terse, dramatic, patronizing. Exit left.

Now it turns out that Speaker Tucker might be advised to do some reading of his own.

Tucker, in a recent address in Monroe, blamed the Senate and Gov. Bobby Jindal for their failure to make deeper cuts in an attempt to mitigate next year’s anticipated $2 billion budgetary shortfall.

Speaking to the Monroe Chamber of Commerce on September 1, Tucker said of next year’s impending fiscal crisis, “We knew this was coming. We’ve been trying to manage this in the House for three years, but we were rebuffed by the Senate and the governor.

Tucker said the House had more significant cuts in the 2011 budget than the version ultimately approved after Jindal supported the Senate version, which, according to the House Speaker, used one-time money to postpone more severe cuts.

“So next year we’re going to deal with it as a crisis,” he said. “It’s not how I would have preferred to deal with it. I was disappointed, but we’ll deal with it as it comes.”

Perhaps Speaker Tucker should take his own advice and go back and read over HB 76 that passed the House by a vote of 88-0 and was signed by the governor as Act 41. HB 76, the ancillary appropriations bill, was the notorious bill that dumped some $33 million into local pork projects after additional funds were “found.”

Of that $33 million, Jindal managed to find 32 projects totaling less than $2.5 million that he could veto. Of the remaining $30 million-plus, $3.4 million was for local arts councils, $1.5 million was for local councils on aging, and another $12.8 million was appropriated for local parishes and municipalities, some of those with no explanation of how the money would be used. The City of Baton Rouge, for example, got two separate appropriations totaling $515,000 with no explanation of how the funds would be spent.

Of the appropriations for the councils on aging, $325,000 was for the Jefferson Council on Aging. Tucker is from Jefferson Parish.

The St. Landry School Board received $750,000 for “enhancements to public elementary and secondary education.”

The expenditures contained in HB 76, however, do not even approach the waste included in HB 1 (General Appropriations) and HB 2 (Capital Outlay).

Those two bills included, among other expenditures:

• $12 million for the Convention Center Complex in Shreveport;

• $6.1 million for the Baton Rouge Riverside Centroplex;

• $6.6 million for City Park Golf Complex in New Orleans;

• $6.12 million for golf course development in Westlake;

• $301,184 for Black Bear Golf Club at Poverty Point;

• $325,000 for promotion of the Audubon Golf Trail;

• $5,000 for the Delhi Municipal Golf Course;

• $200,000 for Junior Golf training facilities in Shreveport;

• $1.17 million for repairs to Zephyrs baseball facilities in Jefferson Parish;

• $17.5 million for professional sports facilities in Jefferson and Orleans parishes;

• $1 million for a recreational complex in Iberia Parish;

• $1.4 million for baseball stadium improvements in Baton Rouge.

Baton Rouge has no baseball team.

Is this House Speaker Jim Tucker’s idea of fiscal responsibility?

Read the bill, Mr. Speaker. Read the bill.

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