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Jindal goes bat guano crazy by entertaining Goldman Sachs, Citigroup proposals to sell LA. State Lottery for quick cash

Posted in Budget, Corruption, DOA, Economy, Education, Ethics, Finances, Fraud, Governor's Office, Legislature, Legislators, Office of Group Benefits, Politicians, Privatization, Revenue on March 19, 2015| 19 Comments »

 

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

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

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

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

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

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

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

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

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

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

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

Why do we tell you all this?

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

Wait. What? Sell the State Lottery?

Yup.

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

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

Citigroup Presentation – March 2015

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

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

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

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

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

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

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

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

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

Goldman Sachs:

Citigroup:

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

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

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

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

 

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Bobby Jindal finds another asset to sell: remaining tobacco settlement but Kennedy vows to fight junkie’s need for a fix

Posted in Attorney General, Budget, Courts, DHH, DOA, Education, Finances, Governor's Office, Health Care, Higher Education, Legislature, Legislators, OGB, Office of Group Benefits, Revenue on March 13, 2015| 14 Comments »

There’s blood in the water and the sharks are starting to circle.

To clarify the analogy somewhat, the blood is $750 million in tobacco settlement money and the sharks would be 144 state legislators and the guy masquerading as Louisiana’s governor.

Bobby Jindal, the same guy who as Secretary of the Louisiana Department of Health and Hospitals (DHH) in 1996, opposed the state’s participation in the 46-state litigation against the nation’s four largest tobacco companies, now wants to sell off the remaining portion of the 1998 settlement of that suit to generate $750 million for the state treasury.

That’s the same Bobby Jindal who as DHH secretary, was well aware that the state was spending millions of dollars per year in treatment of indigent patients for tobacco-related illnesses at the state’s charity hospitals, but nevertheless signed affidavits along with his boss, then-Gov. Mike Foster, that argued that Attorney General Richard Ieyoub did not have the authority to sue on behalf of the state and DHH.

That’s also the same Bobby Jindal who as governor in absentia, successfully opposed the lawsuit by the Southeast Louisiana Flood Protection Authority-East (SLFPA-E) against 97 oil and gas companies in an effort to hold them accountable for damages to Louisiana’s coastal wetlands, claiming that SLFPA-E did not have authority to file suit on behalf of the state.

No matter. The tobacco litigation was settled for $365.5 billion in 1998 and the state was in line to receive $4.6 billion, or $141.2 million per year for 25 years and continued payments as long as tobacco products are sold within the state as its share of the settlement. http://kff.org/other/state-indicator/tobacco-settlement-payments/

But in 2001, the state, with the support of State Treasurer John Kennedy, sold 60 percent of its settlement income as a hedge against the possibility of bankruptcy by the tobacco companies. That money was placed in a trust fund that generates revenue for health care, education and the Taylor Opportunity Program for Students (TOPS), the program that provides college scholarships to Louisiana high school students to meet curriculum and grade criteria.

Now, though, Jindal is proposing selling off the remaining 40 percent, a move that Kennedy opposes, saying it represents the same disastrous fiscal policy that is responsible for the current $1.6 billion structural deficit in the state budget.

Commissioner of Administration Kristy Nichols, in her usual condescending manner, said Kennedy does not understand what the administration is trying to do.

“The only way we will consider this is if it creates recurring revenue for TOPS,” she said, adding that the money would not be spent all at one time.

But Nichols and Jindal only have a few months left in office and have no way of guaranteeing how the money will be used and Kennedy is more than a little skeptical of Jindal’s motives. “It’s just another gimmick to generate one-time money,” he said. “It’s just not a good idea to sell the family silver.”

He said the administration does not have the authority to dictate how the money is spent. “That will be the decision of the legislature and with the history of the legislature being what it is, you know they can’t wait to get their hands on this money,” he said.

Kennedy said the proposed sale is much like the manner in which the Office of Group Benefits (OGB) saw its reserve fund reduced from $500 million to only about $100 million and still dwindling.

“The administration reduced premiums for OGB members which on the surface, looked like a great thing for the members.” What the administration didn’t say is that the move also reduced the state’s corresponding obligation to match premiums, thus freeing up money the state would have paid into OGB for helping Jindal patch his budget holes. Meanwhile, because of reduction in income from premiums, OGB found itself paying out about $14 million more in benefits each month than it was taking in, thus creating a continuous drawdown on the reserve fund.

Kennedy said the revenue from the sale of the tobacco settlement cannot be used to plug budget holes because it would have to be used for TOPS and higher education. But by dedicating the money for TOPS, it would allow the administration to take the money it would normally use for those two purposes and redirect it to the state budget.

Kennedy said the administration has taken on all the characteristics of a junkie in search of a fix.

He said Jindal’s chronic use of one-time money to fill budget holes has included selling state property, raiding the Medicaid Trust Fund for the Elderly, indirectly taking funds from the OGB reserve fund. “When you get hooked badly enough, you will sell your shoes for a fix,” Kennedy said. “Any farmer knows it’s a bad idea to sell your seed corn because then you don’t have anything to plant next year’s crop.”

Noting that Moody’s and Standard & Poor’s bond rating agencies have already put Louisiana on negative credit watch, he said the rating agencies will take a dim view of the state’s selloff of the remainder of the tobacco settlement which is currently generating about $50 million a year for the state.

Nichols said the proposal to sell the remaining 40 percent of the settlement would have to be approved by the Tobacco Settlement Financing Corp. Board, the Legislature and the State Bond Commission. The board is scheduled to meet Tuesday at 10:30 a.m. in House Committee Room 1 in the State Capitol.

Approval by the board is expected to be a mere formality since the board members are Jindal appointees.

“My fear is that all $750 million of this money will be spent,” Kennedy said. “Everyone will want a piece of the pie. That will only add to our structural deficit and what will we do next once the money is gone? We’ve got to stop thinking about the next election and begin thinking about the next generation. Don’t hold this fire sale.”

If the board does approve it and it goes before the Legislature, “we are going to do everything we can to oppose the sale,” Kennedy said.

The practice of Bobby Jindal’s selling off everything in sight to raise money is reminiscent of a 2011 comment by former State Sen. Butch Gautreaux (D-Morgan City) who, in criticizing Jindal’s practice of selling state property, suggested acerbically that perhaps the administration should consider selling the 24-story State Capitol building because “it would make a great waterslide.” https://louisianavoice.com/2011/04/29/of-water-slides-and-comparisons-between-2-state-health-plans/

 

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Irony of ironies for pro-business Gov. Bobby, Louisiana hits rock bottom in survey of best and worst states for business

Posted in Business, Economy, Education, Governor's Office, Health Care, Higher Education, Incentives, Jobs, Office of Risk Management, OGB, Office of Group Benefits, Privatization on February 27, 2015| 12 Comments »

In the seven-plus years of his administration, Gov. Bobby has pretty much had his way with the legislature in passing his so-called reform programs. The lone exception is his aborted effort to abolish the state income tax a couple of years ago.

Everything else—education reform, state employee retirement reform, privatization of the Office of Risk Management, the Office of Group Benefits, the state’s charity hospital system, rejection of Medicaid expansion, cutting funding for higher education, the sell-off of state property, and of course, all those generous corporate tax exemptions, credits and incentives for—sailed through the legislature, to borrow a phrase from my formative years, like crap through a goose.

Only the courts were able to restore some degree of sanity to the education and retirement changes.

So how has all that change worked out for the state?

Well, according to Marsha Shuler, writing in today’s Baton Rouge Advocate, the OGB reserve fund, which was already largely depleted since the privatization of that agency, has now fallen below that financial advisers believe to be a “safe” level. Those reserve funds, which were more than $500 million before Gov. Bobby’s meddling, are now at a dismal $102.8 million and at a burn rate (paying out more than it’s taking in) of $14.9 million a month (spending $1.14 for every dollar in revenue), the fund is on a trajectory of hitting less than $30 million by June 30. http://theadvocate.com/news/11705445-123/group-benefits-reserves-continue-to

The privatization of the state’s charity hospital system has resulted in a $190 million state liability to Medicaid even after the privatization deal was approved in part by the Centers for Medicare and Medicaid Services. http://www.thenewsstar.com/story/news/local/2015/01/11/hospital-decision-good-jindal-less-others/21538739/

The ripple effect of the hospital privatization has also resulted in the decision by Baton Rouge General Mid-City to close its emergency room facilities next month because of operating losses generated by the closure of Earl K. Long Medical Center which served the poor community of Baton Rouge.

But never one to pass up an opportunity to put a positive spin on bad decisions, Gov. Bobby, while taking pot shots at the Obama administration for everything from Obamacare to his Mideast policies to the threat of an imminent Islamic coup in Europe, keeps telling us (on those rare occasions when he is in the state) how wonderful things are and how Louisiana continues to outpace the rest of the nation in economic growth and business climate. http://gov.louisiana.gov/index.cfm?md=newsroom&tmp=detail&articleID=4156

His head cheerleader, Rolfe McCollister is right behind him, lending the influence of his publication, the Baton Rouge Business Report, to augment Gov. Bobby’s rosy proclamations.

http://www.businessreport.com/business/columns/la-makes-biggest-leap-in-forbes-rankings

But one should keep uppermost in mind that McCollister was treasurer of Gov. Bobby’s re-election campaign and as Bobby’s appointee to the LSU Board of Stuporvisors, was instrumental in securing the Pete Maravich Assembly Center for that prayer rally attended by about 3,500 people in the spacious 18,000-seat arena.

But let’s look at the latest survey, one which Gov. Bobby undoubtedly will ignore as he traipses about Iowa, New Hampshire and South Carolina in search of enough commitments to get him to even register in polls of likely Republican presidential contenders.

24/7 Wall St. is a corporation which runs a financial news and opinion company. The company publishes up to 30 articles per day which are published throughout the world.

Its latest survey, issued today (Feb. 27) puts Louisiana at the very bottom of its list of the Best and Worst States for Business. http://247wallst.com/special-report/2015/02/26/the-best-and-worst-states-for-business/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_content=FEB272015A&utm_campaign=DailyNewsletter

That’s right, Mississippi no longer owns the anchor spot in 24/7 Wall St.’s multitudinous surveys of things good and bad. This one belongs to Louisiana.

Here’s what the survey says about Louisiana:

  • No state fared worse on 24/7 Wall St.’s business climate Index than Louisiana. The state is not the worst place to run all businesses, however. The manufacturing sector accounted for more than 20% of Louisiana’s economic output in 2013, the fourth highest such contribution in the country. Despite the strong sector, Louisiana generally provides poor conditions for business.
  • Nearly one in five residents lived in poverty in 2013 — nearly the worst rate in the nation — contributing to both the low quality of the labor force as well as a low quality of life in the state. The working-age population was projected to decline by 3.2% from 2010 through 2020, one of the worst declines in the nation. While nearly 30% of Americans had at least a bachelor’s degree as of 2013, only 22.5% of Louisiana adults had at least such a degree, also nearly the lowest rate. Poor education contributed to poor scores in innovation. The state was one of only a handful of states where the average venture capital investment was less than $1 million.

There were several factors that went into the evaluation of the state’s lowly status as a place to do business:

  • The state’s gross domestic product growth of 1.3 percent was 17th lowest in the nation;
  • Average wages and salaries of $44,828 were 23rd lowest;
  • The percentage of adults with bachelor’s degrees was 5th lowest at 22.5 percent;
  • The 395 patents issued to residents were 13th lowest;
  • The negative 3.2 percent projected working-age population growth was 13th lowest.

The survey also noted that Louisiana ranked:

  • 47th in infrastructure;
  • 48th in the quality of life (the lack of adequate health care for many could be a factor in that statistic);
  • 49th in labor and human capital

Mississippi? As far as Louisiana and Gov. Bobby are concerned, that state is up there in the stratosphere at only the 4th worst in the nation.

Rounding out the bottom five were West Virginia (49th), Kentucky (48th), and Alabama (46th).

The five best, in order, were Utah, Massachusetts, Wyoming, South Dakota and Delaware, according to the survey.

Iowa and New Hampshire ranked 12th and 14th, respectively, which may help explain why Gov. Bobby spends so much time in those places instead of the state that he was elected to govern.

Nah.

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Higher ed leaders plead with Gov. Bobby in effort to mitigate budget cuts in a way he would love for GOP to pander to him

Posted in Budget, Education, Exemptions, Incentives, Governor's Office, Higher Education, Legislature, Legislators, LSU, Politicians on February 26, 2015| 7 Comments »

“They’re still negotiating with the terrorists.”

That gem, said in a private email to LouisianaVoice, came from a blogger who is relative new on the scene but who is very perceptive about what the Bobby administration is trying to do to higher education. https://lahigheredconfessions.wordpress.com/2015/02/27/open-letter-to-higher-education-leaders-the-time-for-negotiating-is-over/

A two-page letter today (Feb. 26) from five higher education leaders lobbed fluffy white marshmallows at Gov. Bobby and an anticipated $400 million (or more) cut to the state’s public colleges and universities. Joint Higher Education Letter 2-26-15

The letter was signed by LSU President F. King Alexander, Southern University System President Ronald Mason, Jr., Louisiana Community & Technical College System President Monty Sullivan, University of Louisiana System President Sandra K. Woodley, and Commissioner of Higher Education Joseph Rallo.

Rather than digging their collective heels in and shouting “Enough!” the higher education officials attempted to appeal to Gov. Bobby’s well concealed humanitarian instincts which has about as much chance as the proverbial snowball.

The letter comes about as close as possible to the prediction of one of our readers who said the college presidents in the end would thank Gov. Bobby for not cutting them more.

The letter began, predictably, with the education officials thanking Gov. Bobby “for your support during last year’s legislative session and the creation of the Workforce and Innovation for a Stronger Economy (WISE) Fund,” calling it an “unprecedented statewide collaboration across higher education.”

The pandering continued when the letter practically pleaded with Gov. Bobby to not lose “the momentum that began last year to raise the level of educational attainment in Louisiana.”

Have these educational leaders lost their collective minds? Have they forgotten that this governor’s policies of lavishing tax exemptions and incentives on corporations like Wal-Mart, chicken plucking plants and other corporations that offer little in the way of gainful employment are directly responsible for the fiscal mess we find ourselves in today?

And while Gov. Bobby did eventually support the move, it was the legislature that repealed the Stelly Plan, one of the most progressive tax programs in the history of this state, so we’re not giving lawmakers a pass on this.

“The need for college graduates, particularly in high demand fields such as engineering, computer science, business and industrial trades, is fundamental to meeting workforce goals and ensuring Louisiana graduates are prepared to reap the economic benefits Louisiana has realized,” the shameless communication said.

“Economic benefits Louisiana has realized”? Give us a freaking break! The only economic benefits realized by this state has been realized by Gov. Bobby’s campaign contributors. Why don’t these higher education officials just go on and kiss Gov. Bobby’s ring (yeah, we cleaned that up) and get it over with?

“Commissioner (of Administration) Kristy Nichols has informed us of the impending budget shortfall and the funding impacts on higher education,” the letter continued. “We want to partner with you and our legislative leaders to craft both a short-term approach to address the immediate budget shortfall and offer long-term recommendations that fundamentally change the higher education funding model. In both instances, budget stability is the overarching goal,” it said.

First of all, the use of the word “partner” scares the hell out of us. The last time “partner” was used by this administration, it gave away an entire system of public hospitals that resulted in such an overbearing spillover to Baton Rouge General Mid-City that it is closing its emergency room, thus making it even more difficult for the poor in north Baton Rouge to obtain needed medical care.

“In the long term, higher education is requesting budget stability and increasing state supported investments in higher education,” the letter said.

“The economic stability of Louisiana hinges on our collective ability to find both a short-term solution in the budget for next year and a long-term solution to sustain and increase investments in Louisiana’s higher education system.”

If the economic stability of Louisiana hinges on the ability of this administration, we’re in for a long, hard winter of economic—and intellectual—instability.

In addition to sending the letter to Gov. Bobby, copies also were sent to Gov. Bobby’s various lap dogs in the House and Senate where it will be promptly ignored as legislators turn their attention to getting re-elected while dealing with a $1.6 billion distraction.

To paraphrase H. Ross Perot, “That giant sucking sound you hear is Louisiana college-bound students headed out of state.”

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Moody’s warns that Louisiana higher education can’t absorb further cuts; Gov. Bobby taking the state out of state colleges

Posted in ALEC, American Legislative Exchange Council, Budget, Economy, Education, Exemptions, Golf Courses, Governor's Office, Health Care, Incentives, Legislators, Legislature, Privatization on February 23, 2015| 23 Comments »

As our friend and former State Budget Officer Stephen Winham recently said when Moody’s and Standard & Poor’s recently moved Louisiana’s credit outlook from stable to negative, the bond rating agencies are finally waking up to what the rest of us have seen coming for some time now.

Now Moody’s has gone on record as saying what Gov. Bobby refuses to acknowledge: Louisiana’s public universities are not equipped to absorb additional credit stress expected with an anticipated cuts of yet another $300 million.

State Treasurer John Kennedy agrees while Joseph Rallo, barely acclimated to his new office after being chosen last October as the state’s eighth commissioner of higher education, tried to remain optimistic in the face of the latest announcement by Moody’s that the state’s colleges and universities are now in danger of having their credit ratings reduced if the legislature does not finally grow a set and stand up to Gov. Bobby.

“Moody’s is putting us on notice that it will reduce the credit ratings…if the legislature continues to cut higher ed funding,” Kennedy said. “We’ve cut our college campuses by $700 million since 2008. We’ve made deeper cuts than any other state. Enough is enough.”

Rallo told LouisianaVoice that it is not a matter of not having the revenue available to fund higher education, but rather it is an issue of allocation of funding. He said Moody’s is holding off taking the step of actually downgrading high education’s credit rating until June in order to see what the legislature will do to resolve the funding problem.

The problem at this point is twofold: Gov. Bobby refuses to take steps to increase revenue and legislators lack sufficient backbone to face Bobby down for fear of losing precious projects in their districts by veto. The legislature always blinks first.

Therefore, if Bobby won’t take steps to increase funding (he’s a party to that no-tax pledge the tea partiers forced down the throats of legislators and congressmen who had no taste for facing up to real problems and finding real solutions when self-serving rhetoric and pandering could get them re-elected), then the only alternative is to cut and cut again and then cut some more.

What these tea partiers and their ilk, including Gov. Bobby, refuse to admit in their manic pursuit of free market economics, is that corporate welfare (read lucrative tax breaks) costs this country many times what individual welfare costs and corporate fraud costs the nation billions upon billions more than the roughly 1 percent in documented welfare fraud (see details of the 2008 Wall Street bailout for verification). Corporations and corporate executives pay far fewer taxes, percentage-wise, than do middle- and low-income taxpayers in this country. Those are the cold, indisputable hard facts. To claim otherwise is to throw up that same tired old argument that the middle- and low-income are a drag on the nation’s economy while the super-rich produce wealth and jobs, thank you very much.

But Gov. Bobby would much rather continue doling out tax breaks that cost the state billions of dollars with little or no return than to take the necessary steps to pull the state out of the financial quagmire in which it currently finds itself and thus allow college to be affordable to the middle class and for the working poor of this state to have access to health care.

And legislators are a party to the scheme and must share the blame. Let’s consider some projects in the districts of four key legislators from the 2014 legislative session:

  • Appropriations Committee Chairman Rep. Jim Fannin: $13 million in projects, including the Jackson Parish Riding Arena and Livestock Pavilion ($195,000 last year, $1.4 million in Priority 2 and $1.6 million in Priority 5 funding;
  • Senate President John Alario: $121 million in projects for Jefferson Parish;
  • House Speaker Chuck Kleckley: $107 million in projects in Calcasieu Parish;
  • Senate Finance Committee Chairman Jack Donahue: $60 million in projects in St. Tammany Parish.

And then there are these little projects we found in last year’s capital outlay bill:

  • City Parish Golf Complex improvements (Orleans)—$9.1 million;
  • Junior Golf Training Facilities (Caddo)—$445,000;
  • Golf Course Development (Calcasieu)—$1.6 million;
  • Zephyrs Baseball facilities repair (Jefferson)—$1.5 million;
  • Professional Sports facilities improvements (Jefferson, Orleans)—$18.4 million;
  • New Orleans Sports Arena improvements (Orleans)—$41.5 million;
  • Bayou Segnette Recreation Complex (Jefferson)—$5.5 million;
  • Improvements to New Orleans Superdome—$6 million;
  • Recreational complex (Iberia)—$100,000;
  • Baseball stadium improvements (East Baton Rouge)—$1.4 million (Baton Rouge has no baseball team);
  • Improvements to amusement area, tennis center improvements (Orleans)—$1.2 million;
  • Repairs to Strand Theatre (Caddo)—$950,000;
  • Various community centers (statewide)—$11 million;
  • Various hall of fame projects (statewide)—$15 million.

One can just follow the money to see why legislators become shrinking violets when Gov. Bobby is holding that veto pen. Sure, there will be all manner of posturing, bluster and harangue but in the end, they always end up going along with whatever the governor wants.

And the governor wants what the American Legislative Exchange Council (ALEC) wants and ALEC wants to take the state out of state universities.

And Louisiana isn’t alone.

If you don’t believe that, just take a look at what is going on in Wisconsin, Illinois, Arizona and Kansas. http://neatoday.org/2015/02/19/cuts-to-higher-education-taking-public-public-universities/

  • Louisiana: Tuition costs have increased 90 percent since Gov. Bobby took office;
  • Arizona: Tuition has more than tripled while state funding has decreased by $3,500 per student;
  • Wisconsin: Like Louisiana, $2 billion tax cuts have resulted in $300 million in cuts to higher education that could eliminate the schools of nursing, law, business, pharmacy and veterinary medicine at the University of Wisconsin-Madison even as Gov. Scott Walker lobbies for $220 million in public donations to the Milwaukee Bucks to build a new team arena;
  • Illinois is losing $2.1 billion in tax revenues because of lawmakers’ refusal to extend taxes that are expiring even as colleges are facing a $400 million cut;
  • Kansas is projecting a loss of $5 billion in revenues because of reckless tax cuts and higher education, not surprisingly, is on the chopping block.

It’s not a coincidence, it’s a pattern. And what would one suppose these five states have in common besides this disturbing trend in higher education funding?

Republican governors who feel they owe their allegiance not to the voters of their states, oddly enough, but to ALEC and the Koch brothers who insist on defunding state colleges and universities in the hopes they will be forced to become private universities.

That, of course, will drive tuition up even further, necessitating much larger student loans and greater profits to lending institutions and Wall Street. It also will make a college education assessable only to the wealthy while relegating the rest of society to low paying jobs in the service sector in the absence of manufacturing jobs that have all been moved offshore.

Louisiana, says Moody’s latest assessment, has had the steepest declines in state funding in the nation from 2009 through 2014.

“As the state tries to close its widening budget gap, Louisiana public universities will face additional reductions in state appropriations,” the assessment said. “After five years of the deepest cuts to public higher education in the nation and significant expense reductions, these universities are ill-equipped to face additional credit stress.”

Moody’s said the timing and magnitude of budget cuts, the ability of universities to quickly align expenses with revenue, and the degree of financial cushion to absorb operating volatility “will factor into our assessment of ratings and outlooks for individual universities.

“Currently, Louisiana public university credit quality is lower than the median A1 nationally, reflecting historically weak state funding, anemic operating performance and limited liquidity,” the report said.

So while legislators wring their hands and gnash their teeth over the hard decisions they’re going to have to make this year, just remember no one held a gun to their heads and made them drop those golf courses and baseball parks into the Capital Outlay bill last year. And the year before that. And the year before that.

And remember that Gov. Bobby and ALEC do not (boldface that: Do Not) have the survival of our universities as public institutions as a priority item. If they are ultimately forced to become private colleges, that will be perfectly fine with them.

With all due respect to Dr. Rallo, we shouldn’t expect too much from this governor in the way of meaningful solutions to a problem that has persisted since he became governor more than seven years ago—long before the latest decline in oil prices which he conveniently uses as a scapegoat for Louisiana’s fiscal ills.

The late Wiley Hilburn, who headed up the journalism program at Louisiana Tech University, once told us that Bobby visited the Ruston campus when he was Commissioner of Higher Education under former Gov. Mike Foster, ostensibly to get an overview of university operations. Instead he spent his entire visit in Hilburn’s office playing computer games.

Perhaps that’s what Louisiana’s public colleges and universities are to Gov. Bobby—a game with students serving only as action figures for his personal enjoyment.

It certainly appears that that’s all this state is to him.

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