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“Given how salient the issue of health care is to national Republicans, privatizing the Office of Group Benefits (OGB) would further the national viability of Gov. Bobby Jindal in a number of ways. It would be difficult for Gov. Jindal to continue his strident attacks on President Obama’s ‘government-run health care program’ while leaving untouched a state-run health insurance program right under his nose.

“Therefore, given the idelogical thrust of both the governor’s rhetoric and his policies, coupled with the political timing of the proposed privatization of OGB, it is hard to escape the conclusion that the privatization of OGB is politically motivated.”

–Albert L. Samuel, Ph.D., Chairman of the Department of Political Science at Southern University, discussing Gov. Piyush Jindal’s incessant ongoing audition for the Republican vice-president nomination and his obsession with privatizing OGB.

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A Baton Rouge attorney has filed papers in opposition to the privatization of the Office of Group Benefits (OGB) for Wednesday’s Civil Service hearing but in the process he could get two university professors teagued by Gov. Piyush Jindal.

Attorney J. Arthur Smith filed his lengthy objection on behalf of 177 OGB employees who stand to lose their jobs if the proposed takeover by Blue Cross/Blue Shield (BCBS) goes through. He reminded the Civil Service Commission that the fundamental purpose of the Civil Service system “is to prevent permanent classified employees from being subjected to adverse personnel actions based on political influence.”

Political influence on the part of the Jindal administration is precisely what he is claiming—along with offering evidence that privatization has not proven to be the panacea claimed by governmental entities that have boldly gone where Piyush is attempting to go now.

BCBS was recently announced as the winner of the state contract to take over the OGB Preferred Provider Organization (PPO) which serves some 60,000 state employees, retirees and dependents.

But two political science professors at LSU and Southern University were sharply critical of the administration’s motives for privatizing OGB and challenged the administration’s fiscal arguments in written reports.

The State Civil Service Commission will hear presentations by the administration and by opponents of the privatization proposal on Wednesday at 9 a.m. in the appropriately named Louisiana Purchase Room of the Claiborne Building on North Third Street in Baton Rouge.

Smith cited a court case—New Orleans Civil Service Commission v. City of New Orleans—in which the Louisiana Supreme Court ruled that the mayor and city council “do not have the unfettered discretion to potentially decimate the civil service system by eliminating all civil service positions to privatization, and, therefore, we find that checks on that discretion are necessary and authorized by the Constitution.”

That ruling also said that the city must turn over all documents and other evidence which enable the Commission to determine (1) whether and civil service employees will be involuntarily displaced from the Civil Service; and, if so, (2) whether the contract was entered into for reasons of efficiency and economy and not for politically motivated reasons.”

The Jindal administration has been conspicuously reluctant in providing “all documents and other evidence,” to the legislature as well as the media. The reason for non-disclosure, which has become almost a cliché, is the often-cited “deliberative process,” an obscure provision behind which the governor consistently hides. He pushed through the deliberative process provision shortly after becoming governor and since has boasted non-stop to the nation that he has made state government more responsive, accountable and transparent.

Smith cited several examples in which privatization has run into problems, including cost overruns, little or no cost savings, inferior service, and a lack of accountability. In many of those cases, he said, governmental entities have on occasion been forced to bring outsourced services back in-house. That has already happened with OGB once before.

He also cited what he considered to be conflicts of interest regarding BCBS. He cited contributions to Jindal of $43,500 by BCBS; $12,500 by Louisiana Health & Indemnity (BCBS’s parent company), and at least $100,000 by BCBS to the Supriya Jindal Foundation. The foundation is run by Jindal’s wife, Supriya Jindal.

Moreover, Smith said the State of Louisiana “essentially donated in excess of $1 million to Louisiana Health & Indemnity to expand and upgrade its headquarters building.” That subsidy, which produced only 22 new jobs, was approved in 2009 as an Enterprise Zone project.

Smith also said the Jindal administration has failed to prove that the proposed OGB privatization would result in increased efficiency.

He cited former OGB Director Tommy Teague as saying in March of 2010 that if OGB is dismantled, the PPO provider network, most of the agency’s extensive expertise in claims, provider services, customer service and information technology would be lost. Also lost, he said, would be the capacity to reinstate the existing self-administered PPO plan structure. Teague pointed out that OGB, in addition to providing “excellent customer service,” also holds down costs by self-administering the PPO plan.

His arguments notwithstanding, Smith’s aces are two political scientists who have weighed in on the side of OGB employees with comprehensive reports that take issue with the administration stand that privatization would be best for OGB and the state.

Albert L. Samuel, chairman of the Political Science Department at Southern University, was critical of the fiscal irresponsibility of the administration and legislature in the aftermath of Hurricanes Katrina and Rita which he said led to the current fiscal crisis.

“Due to federal recovery dollars as a result of the 2005 hurricanes and historically high oil prices, the (Jindal) administration inherited a budget surplus of nearly $2 billion. During its first year in office, the administration and its legislative allies swiftly passed a series of large tax cuts and spent millions of dollars in one-time money on road projects, deferred maintenance at state colleges and universities, levee improvements, coastal restoration projects and upgrades to Pennington Biomedical Center,” he said. “Perhaps most notably, Gov. Jindal signed a repeal of the Stelly Tax Plan which provided a substantial tax savings for upper-income Louisianians.”

When the 2008 financial crisis struck, however, Samuel noted that rather than reconsidering the deep tax cuts that were enacted in previous years, Jindal “held steadfastly to (his) conservative ideals.” Jindal, he said, “adamantly opposed every attempt on the part of legislators to deal with the financial crisis through tax increases.”

“Consistent with that Naomi Klein calls ‘The Shock Doctrine,’ the governor capitalized on the financial crisis of the state to advance an agenda that called into the question the rationale for government to perform basic services on a wide range of issues.”

Samuel concluded his 21-page report by saying that political motivations “are driving the Jindal administration’s push to privatize the Office of Group Benefits.

“It locates Gov. Jindal squarely on the cutting edge of a national Republican party, determined to pursue this course without making a clear and convincing case that OGB, as currently constituted, has failed to provide quality service and coverage to its plan members at reasonable costs to taxpayers.

“The proposed privatization cuts to the heart of the fundamental rationales for having a civil service system in the first place—the idea of protecting state government workers from dismissal driven by politics.”

LSU political science professor Belinda Creel Davis cited from Shrinking the State: The Political Underpinnings of Privatization, a book by Harvey Feigenbaum, Jeffrey Henig and Chris Hamnett who said that privatization “is a political tool having the end goal of realigning institutions and decision-making in order to privilege the goals of one group over another.”

Davis cited the privatization of Louisiana’s Medicaid program as “an excellent example” of the difficulty in evaluating the effectiveness of privatization, specifically citing Jindal’s reluctance to approve legislative oversight of privatization programs.

“The Louisiana Legislature has passed bills in the 2011 and 2012 sessions that were designed to give legislators more information on the way the Jindal administration is implementing health care programs for the poor via private health care firms.

“For the second year in a row, Gov. Jindal has vetoed the bills, claiming they were unnecessary and duplicative since the Department of Health and Hospitals (DHH) issues extensive evaluations.

“It is interesting to note that his veto message does not claim that the report issued by DHH provides all or even most of the information sought by legislators. In the 2012 session, Senate Bill 569, seeking greater transparency on this matter passed unanimously in the House and Senate. Legislators seeking transparency regarding implementation must find the reports lacking if they have sought additional information, but they are unable to access the information they seek—resulting in a more difficult accountability process under privatization than you would see under government provision of the service.

“This is exactly the type of consequence systemic privatization predicts,” she said.

“In my opinion, as a scholar of public policy and government, privatization is an inherently political process. The evidence from both national and state studies supports this view. I believe the case before you is a clear case of politically motivated privatization.”

Those are the kinds of statements, bold and insightful as they may be, that seem to get people teagued these days.

Teagueing, after all, is the one activity in which this administration is abundantly transparent and open.

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Those worried about the future of Southeast Louisiana Hospital in Mandeville might be less concerned about the possible residential development of the remaining 300 acres of the 1900-acre tract than its becoming yet another step in Gov. Piyush Jindal’s methodical march toward privatization.

The administration released a quiet announcement late last Friday that it would begin phasing out the 348-bed facility in October, in the process eliminating some 300 positions while terminating treatment for mental illness and depression in an area serving about a quarter-million residents.

In all, about 500 acres of the original tract still are owned by the state. The hospital facilities occupy about half of that area with the remainder currently under lease to the parish as a park.

An indication of the direction the administration plans to take with the facility might be determined by observing the comings and goings of one Alan Levine around the State Capitol and the Department of Health and Hospitals, according to a Tulane University psychiatrist.

Levine, of Tallahassee, Florida, was appointed secretary of the Department of Health and Human Services (DHH) in January of 2008 by then Gov.-elect Jindal only days before he took the oath of office for his first term. He resigned in August of 2010 and was immediately replaced by current DHH secretary Bruce Greenstein.

Levine, upon his resignation two years ago, returned to Florida where he serves as the Division 3 President of Health Management Associates. His responsibilities include the administration of for-profit hospitals in Florida, Georgia, Oklahoma, Kentucky and West Virginia.

Though he has no official responsibility for Louisiana hospitals, there have been reports that he has been frequenting the Louisiana Capitol and DHH recently.

Campaign finance reports show that he also made two contributions of $1,000 each to Jindal’s re-election campaign fund in February and July of last year.

Tulane psychiatrist Mordecai Potash believes that is no coincidence. And he does not believe the $651 million cut over two years in the state’s federal matching share of Medicaid (FMAP) funds was really the result of “some financial typo made by the federal government (in hurricane recovery fund allocations) that put Louisiana in a sudden pickle.”

The $651 million expands to $860 million when the state match is included.

Potash emphasized that his views were his own and do not represent either the Tulane Psychiatry Department or Tulane University. “My views are mine alone,” he said. “Tulane represents a diverse group of interests and opinions and I am not part of the structure of the university authorized to make statements about the official views of any organization within the university.”

He nevertheless said he believes the sudden fiscal crisis “is part of a sustained campaign by specific politicians and for-profit healthcare companies to close down state hospitals and re-open some of them as privately-run, for-profit hospitals.”

He laid the blame for the loss of the $651 million at the feet of Jindal and Commissioner of Administration Paul Rainwater.

“All that needed to happen was for the Jindal administration to contact the Speaker of the House (John Boehner (R-Ohio) and confirm that they wanted the funding restored,” he said. “All that was required to restore the lost $651 million was minimal participation—simple tacit approval—from the Jindal administration. If that had happened, the cutbacks in LSU’s budget, the closure of Southeast Louisiana Hospital, and other cuts would not (have) happened.

“Their silence on this issue, despite implorations from Louisiana’s Democratic and Republican politicians alike, (was) deafening,” he said.

U.S. Sen. Mary Landrieu appeared to confirm Potash’s contention in a July 16 story in the Baton Rouge Advocate. In that story, she said her office pressed Jindal, through Rainwater and Louisiana’s Republican delegation in Congress, to intervene with the Republican House leadership.

Landrieu said she had 15 conversations with Rainwater—all to no avail.

Jindal, as has been his practice as governor, refused requests for interviews or to respond to questions about whether he ever attempted to contact Boehner or House Majority Leader Eric Cantor (R-VA.). Instead of a simple yes or no answer to that query, Jindal trotted out spokesman Kyle Plotkin to say that the administration was in contact with the Louisiana congressional delegation.

“Why wouldn’t the Jindal administration want money restored?” Potash asked. “Why not have more federal dollars sent to the state? Isn’t that what politicians are lauded for, bringing home the bacon from Washington?

“Well, if your priority project is the outsourcing of state healthcare resources from the public sector to private, for-profit, healthcare companies, then bringing home federal bacon would be the last thing you would want to do.

“Instead, you would want to promote or manufacture every healthcare funding crisis you could possibly find, whether it is a mid-year crisis, end-of-the-year crisis or Ides-of-March crisis. [A] crisis would give you license to close state facilities and outsource contracts to for-profit healthcare companies—especially those that you already have ties to and (which) already contribute money and resources to your political campaigns.”

Levine’s two contributions were not the only healthcare-related contributions to Jindal.

Blue Cross/Blue Shield (BCBS) last Friday was named the winner of the contract to take over the administration of the Office of Group Benefit’s Preferred Provider Organization (PPO) and Health Maintenance Organization (HMO) at a cost of $37 million.

BCBS contributed $2,500 to Jindal’s 2007 gubernatorial campaign and BCBS parent company Louisiana Health Service & Indemnity Co., contributed $5,000 in 2003.

Additionally, BCBS was listed as a “Gold Member” of the Supriya Jindal Foundation on the foundation’s website. A “Gold Member” was described as one that contributed a minimum of $50,000 to the foundation. Some sources put the BCBS contribution at $100,000.

Potash, however, said he expects Southeast Louisiana Hospital to be sold for residential development while Central Louisiana State Hospital in Pineville and East Louisiana State Hospital in Jackson might be targeted for privatization just prior to the next round of “unfortunate and unforeseen” DHH cutbacks.

“A final motivating reason to privatize is that it shrinks the number of state workers, weakening the power of civil service advocates. The importance of this cannot be overstated,” he said. “Any opportunity to reduce the state rolls of civil service employees…enhances some politicians’ abilities to push legislation through.”

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True to form, Gov. Piyush Jindal waited until a Friday, considered one of the slower news days of the week, to make the long-anticipated announcement that Blue Cross/Blue Shield (BCBS) had been selected to administer the Preferred Provider Organization (PPO) for the Office of Group Benefits, a move that will eliminate 177 positions in the office.

Jindal was considerate enough to release the announcement through his favorite publication, the Baton Rouge Business Report, which ran the story on its web page. The OGB web page also carried the announcement.

The administration likewise waited until Friday to make the announcement that the 348-bed Southeast Louisiana Hospital in Mandeville will begin closing down operations, effective, Oct. 1, costing another 300 employees their jobs.

St. Tammany Parish has the highest suicide rate in the state and the move leaves up to a quarter-million people with no facility for treatment of depression or suicide prevention.

The move with Southeast Louisiana Hospital came as a major surprise considering some of Jindal’s strongest support has historically come from legislators in St. Tammany.

Both events might be considered as part of what Capitol Bureau reporter Marsha Shuler described in Friday’s Baton Rouge Advocate as Jindal’s health care “train wreck.”

The administration on Friday sent separate letters to BCBS, Humana and United Healthcare. The letters to Humana and United Healthcare informed them that their proposals were not accepted while the one to BCBS announced it had won the contract to be OGB’s third party administrator (TPA) for both the state’s HBO and PPO, which the administration said will save the state $20 million per year.

BCBS has already been serving as the TPA for the HMO and effective Jan. 1, will be assuming administration of both.

The privatization of OGB’s PPO has been controversial since first being proposed by Jindal more than a year ago. The root of that controversy lies in the fact that the OGB employees paid claims with a turnaround time of less than three days, much to the satisfaction of the 62,000 state employees, retirees and their dependents.

Moreover, the PPO had gone from a $60 million deficit to a $500 million surplus in the five years during which it was run by former director Tommy Teague. Teague was fired on April 15, 2011, when he didn’t sign on to the privatization plan quickly enough to please Jindal.

His successor, Scott Kipper, lasted only six weeks after testifying before a legislative committee that were it left up to him to decide, he would not lay off any of the OGB employees. That remark, made in response to a direct question from a committee member, appeared to irritate his boss, Commissioner of Administration Paul Rainwater who, only moments before, had indicated a need to downsize the agency by 149 positions.

The quick turnaround of claim payments combined with the agency’s $500 million surplus seems to be in stark contrast to Rainwater’s statement on Friday: “The selection of a third-party administrator is an important step toward providing quality care and service to plan members in the most cost-effective way.”

Former State Sen. D.A. “Butch” Gautreaux (D-Morgan City), who served as chairman of the Senate Retirement Committee and as a member of the OGB board of directors before being term-limited last year, fought the governor’s privatization efforts every step of the way.

Contacted Friday, Gautreaux was typically critical of the move. “Sometimes it just isn’t satisfying to be right,” he said.

“It was told to me confidentially well over a year ago and re-stated by in a Senate Retirement Committee hearing that the PPO was going to Blue Cross/Blue Shield.

“I hope Bobby Jindal leaves soon but I feel sorry for his successor. The cost of employee and retiree health insurance will be rising once we get over the one-year hump.” He was referring to a one-year moratorium on premium increases promised by the administration. Gautreaux said the information about premium increases was shared with him by the same source.

Because the state paid no taxes on premium income and because there is no requirement for a profit as long as the PPO was administered by the state, skeptics fear the need for profit and the requirement to pay taxes on profits will necessitate a rate hike by a TPA.

“It really is a shame that we, the taxpayers of Louisiana, will have to face the real cost of Bobby’s ambition for a very long time,” he said.

St. Tammany has had 124 suicides since 2009 and many more reported attempted suicides during that same period.

“The department (Department of Health and Hospitals) is very aware and concerned about the suicide rate,” said DHH press secretary and director of the Bureau of Media and Communications. “Our commitment and ability to respond to patients who will need beds and treatment remains the same,” he said.

State Sen. Jack Donahue (R-Mandeville) said the announcement caught him off guard. “It was not discussed during this legislative session to my knowledge. I was told 15 minutes before the announcement was made.

Rep. Scott Simon (R-Abita Springs), chairman of the House Committee on Health and Welfare, was equally unaware and expressed his “shock” that Jindal would take such action.

To abruptly close down one of the largest employers in St. Tammany in a parish where Jindal has enjoyed some of this strongest support is bad enough. But to do so without even extending the courtesy of giving his legislative allies a heads-up to prepare them only compounds his insensitivity and boorish contempt for the citizens of St. Tammany in particular and citizens of the state in general.

While Jindal and GOP presumed presidential nominee have been accusing Pres. Barrack Obama of being “out of touch,” Shuler was quick to point out the governor’s own inconsistencies and what might appear to some as his deliberate moves to dismantle the state charity hospital system.

The Advocate reporter said Jindal, who is rarely in the state anymore, choosing instead to stump for Romney while auditioning for the vice presidential nomination, seems almost aloof to the financial straits Louisiana’s Medicaid health care program suddenly finds itself in.

A new federal law gutted more than $859 million from the state’s Medicaid funding but Jindal, Rainwater and DHH Secretary Bruce Greenstein say the state can overcome the cut by sacrificing services offered by the LSU hospital system’s care for the uninsured and physician training programs. Further cuts would come through reducing payments for uninsured care by rural hospitals.

As recently as late May, Greenstein and Jindal were united in predicting a doomsday scenario if a proposed $51 million cut was imposed on the LSU Med School. They predicted that some of LSU’s 10 public hospitals, which provide healthcare to the state’s indigent and which also train physicians, might have to shut down.

Now, however, since Jindal has rebuked Obama’s health care plan, the $859.2 million cut to the state’s Medicaid program is “doable,” they say, again in unison. Greenstein even called the cuts “an opportunity to reform and modernize.”

Greenstein and Rainwater, who foresaw widespread closures with a $51 million proposed cut, now say LSU can cut $300 million and still maintain health care for the poor and uninsured.

Now who’s out of touch?

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The Louisiana Department of Education could find itself mired in state and federal courtroom disputes for years to come, thanks to Gov. Bobby Jindal’s sweeping education reform legislation and to the confusing mishmash of educational bureaucracy in Orleans Parish.

Disregard for the time being the last week’s court ruling that could end up costing the Orleans Parish School Board upwards of a billion dollars for the wrongful firing of about 7,000 teachers in the aftermath of Hurricane Katrina in 2005. That lawsuit did not involve the state—just Orleans Parish.

But across the state, several parish school boards and teachers’ unions are lining up as plaintiffs in various lawsuits against Jindal, the Louisiana Department of Education and the Board of Elementary and Secondary Education (BESE) to contest Jindal’s reform package that is being hailed by media everywhere but in Louisiana as groundbreaking, innovative and progressive.

One interesting development at the local level occurred in Ruston when the Lincoln Parish School Board recently voted to join litigation against Jindal’s move to usurp Minimum Foundation Program funds and local tax revenue from local school boards and to use those monies to pay for vouchers, or scholarships, to other schools—even if those other schools were in a different parish.

The local boards contend that those funds are dedicated to the parishes and should not be taken away.

In the case of Lincoln Parish, board member Trot Hunt was the only dissenting vote when the board voted to join as a plaintiff against the administration. He said the board could well do with a little more budgetary restraint.

But did Hunt have an ulterior motive other than fiscal prudence?

Well, consider this: his firm, Hunt-Guillot and Associates, has a couple of mega-contracts with the state which total more than $18 million, according to state documents. The largest, for $17.6 million, calls for the firm to administer HUD grant management activities for infrastructure and other projects undertaken as a result of damages from hurricanes Katrina, Rita, Gustav and Ike.

The other, a $900,000 contract, calls for the company to review applications for grant funds for the Department of Health and Hospitals.

Hunt-Guillot also contributed $4,750 to Jindal’s campaign in 2007 and Trot Hunt personally contributed $5,000 that same year.

If Hunt needed further incentive to vote against joining the lawsuit, there’s also the fact that his business partner, Jay Guillot, is a member of BESE, having been elected last fall thanks in part to strong support from Jindal that included a $5,000 contribution from Jindal’s own campaign. BESE, of course, overwhelmingly supported the Jindal reform package that calls for vouchers, the creation of charter schools and more teacher accountability.

And, of course, It’s pretty much a given that Hunt is keenly aware of what happens when anyone, be it an employee or legislator–or in this case, a contractor–crosses Piyush with a negative word or vote.

Can you say Teagued?

All that aside, there is yet another lawsuit brewing down in New Orleans, this one in the Eastern District of U.S. Federal Court.

If the Department of Education’s action earlier this month is any indication, it is taking this lawsuit quite seriously.

After eschewing Louisiana law firms and the Louisiana attorney general’s office, the department decided to enlist the powerful Washington, D.C. law firm of Hogan-Lovelis as its defense counsel. The initial contract was for $249,999, which is one dollar less than the $250,000 threshold at which the approval of BESE President Penny Dastugue would have been required.

But on May 30, it was decided to go for broke in defending this lawsuit when State Superintendent John White requested that Dastugue approve a $1.2 million amendment, bringing the contract to an eye-popping $1,449,000. Dastugue signed off on White’s request on June 6.

The lawsuit was filed by the Southern Poverty Law Center in October of 2010 on behalf of 10 lead plaintiffs and approximately 4,500 Orleans Parish students with learning and physical disabilities. It names former State Superintendent of Education Paul Pastorek, the State Department of Education and BESE as defendants.

The suit claims that 16 Orleans Parish schools fall under the parish school board, 23 are run by the Recovery School District (RSD) and 49 more are stand-alone charter schools. This arrangement, the lawsuit claims, results in the creation of 51 separate school districts, or local education agencies (LEA). Each charter school, it says, is an LEA.

This arrangement, the petition says, creates a confusing, impossible-to-navigate system for children with disabilities who, under the Individuals with Disabilities Education Improvement Act (IDEA), are entitled to “the appropriate resources, policies and procedures” to provide unfettered access to special education services—“from evaluations to related services and supports.”

Federal law prohibits public entities from discriminating against individuals with disabilities but, the lawsuit claims, students have been subjected to systemic violations that included:

• Discrimination and denial of access to educational services;

• Failure to develop and implement child find procedures are required by law;

• Failure to provide free appropriate public education;

• Failure to protect students’ procedural safeguards in the disciplinary process.

The petition cites a survey conducted by Educational Support Systems which said that schools “under-identify students with disabilities in an effort to escape their legal obligations under IDEA.

Some students referred to the RSD for initial evaluations “frequently must wait months before an evaluation occurs—losing valuable educational time during the wait,” the suit says.

“New Orleans is the only geographic region in the state in which students cannot receive child-find services until they are actually admitted and enrolled in a public school,” it added.

The lawsuit also claims that the RSD has an “abysmal” graduation and school completion rate for students with disabilities. “On average, across the state of Louisiana, 19.4 percent of all students with disabilities graduate with a diploma,” it says. In comparison, only 6.8 percent of RSD students with disabilities obtain a diploma, the petition says.

While he tries to put positive spin on the recent legislative session, there can be no denying that Jindal fell far short of getting what he wanted in terms of state employee retirement reform and the sale of state prisons.

Even though he appears to have been successful with his education reform, there are signs that his support in the legislature may be starting to crumble in that regard as well.

Legislators, already miffed at demotions within their ranks, the use of one-time funds for recurring expenses, the veto of a major commercial project in Livingston Parish, drastic cuts to higher education and the closure of a prison in central Louisiana, are also hearing from their local school boards and public school teachers.

And what they’re hearing may be causing them to entertain second thoughts about their having allowed the governor to rip funds from local school boards.

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