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Archive for the ‘Exemptions, Incentives’ Category

Jindal’s economic yo-yo has perpetual ups and downs; is Louisiana better than the worst or worse than the best?

Posted in Economy, Education, Exemptions, Incentives, Governor's Office, Higher Education, Prison, Privatization, Revenue, Taxes, tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , on May 8, 2012| 4 Comments »

If you feel you’ve been getting mixed signals about the need for more state revenue vs. the need for more tax cuts, there’s good reason.

If you’re a bit confused about the fiscal health of the State of Louisiana, you’re certainly not alone.

If you think you can call for budget cuts, college tuition fee increases, and spending freezes in-state and then run around the country and crow to Sean Hannity about how good things are in Louisiana, then you’re Gov. Piyush Jindal.

Only Piyush would insist on having it both ways.

If you have your head out of the sand and are not fooled for one nano-second by his Protestant church appearances and pseudo-reform measures, then you’re a Louisiana voter with at least a modicum of intelligence.

For your edification and in no particular order, we offer the following condensed news items about Louisiana’s economy that have appeared over the past several months. The lone exception to that time frame is the first story that appeared four years ago and which set the stage for those to follow:

• May 2008: Gov. Jindal repeals the Stelly Plan, estimated to cost the state as much as $300 million per year. Jindal said the repeal could save single tax filers as much as $500 per year and joint filers up to $1,000. What he did not say was that single filers would need to make as much as $90,000 and joint filers $150,000 per year to realize the maximum savings.

• July 2011: Louisiana earns a no. 1 ranking for economic development for the third consecutive year from the Southern Business and Development magazine. The Lake Charles American Press said, “Much of that credit belongs to Gov. Bobby Jindal.”

• April 2012: The state’s Revenue Estimating Conference projected a drop in $210 million in revenue for the remainder of the current fiscal year and another $304 million for the 2012-2013 fiscal year. “The problem is the economy, lamented Greg Albrecht, chief economist for the Legislative Fiscal Office.

• October 2011: President Obama should take a cue from Louisiana on job creation, Jindal tells Faux newsman Sean Hannity. “Every year I have been governor, our employment rate has been below the southern and national averages,” he said. “We’ve added 45,000 jobs in economic developments and $10 billion in private capital investments, three years in a row.”

• May 2012: Louisiana’s full-time college students may be forced to pay an extra $300 per semester in new fees to help cover massive budgetary cutbacks by colleges and universities. College tuition costs in Louisiana have increased 30 percent since Jindal took office in 2008.

• April 2012: Even with the state’s budget problems piling up and income projections plummeting, Jindal continues to see his administration through rose-colored glasses. “More people are working in Louisiana than ever before,” he said, citing 44,000 imaginary jobs added over the past year. Sen. Ed Murray, keeping it real, asked, perhaps somewhat rhetorically, “When is our state going to see the positive impact (of the alleged jobs)? We keep having to have budget cuts because revenues are down.”

• June 2011: a reporter writing in the Detroit Free Press noted that Louisiana jumped to No. 1 in Site Selection magazine’s 2011 overall competitiveness ranking in terms of attracting corporate investment. He said Louisiana and Jindal were doing “a lot of smart things to turn (the economy) around.” Comparing Louisiana to Michigan, the reporter said, “If Louisiana could rebound during the downturn of 2008-09, there’s hope here, too.”

• March 2012: Jindal issues Executive Order No. BJ 2012-3 initiating a spending freeze for state agencies pursuant to projected budgetary shortfalls. The spending freeze augments a hiring freeze ordered in July of 2011.

• April 2012: In an email to supporters, Jindal touts a number of industrial expansions in the state. “The bottom line is that Louisiana is on the move,” he said. “Our state is climbing up in the rankings and securing economic development wins that build momentum for a better and more prosperous Louisiana. There’s still work to be done, but we’re making tremendous progress.” Jindal called for continued tax cuts, revamping workforce training programs and “transformative education reforms.” He said Louisiana is taking steps “that signal to the business community that our state is the best place in the world for companies to invest and create jobs.”

• April 2012: Since 2008, the year Jindal took office, Louisiana’s per capita income ranking has soared from 29th in the nation to 28th. The per capita income of $38,578 for the state in 2011 compares to the national average of $41,663. But we are ahead of Mississippi, Alabama and Arkansas. We do rank near the top in violent crime, however. While we’re way down at 33rd in rapes, we’re 18th in robbery, 14th in auto theft, 9th in burglary, 4th in assault and—drum roll, please—first in murder. Overall, Louisiana ranks third in violent crime.

• May 2012: Chief Executive magazine announces that CEOs nationwide rank Louisiana as the most improved state for business in the U.S., going from 27th in 2011 to 13th this year. “Since we took office in 2008, we’ve worked tirelessly to create a business environment where companies want to invest and create jobs for our people. We’ve reined in government spending, eliminated job-killing taxes on business, created customized workforce training programs and overhauled our governmental ethics laws.”

• November 2011: The U.S. Census Bureau, in noting that poverty has been on the rise since the 2008 recession, release statistics that show the poverty rate for Louisiana to be 18.8 percent, which is 3.5 percent higher than the national average of 15.3 percent.

• April 2012: Area Development magazine ranks Louisiana No. 6 among the Top States for Doing Business in 2011. Business Facilities magazine named the Louisiana Office of Economic Development’s (LED) FastStart the nation’s best state workforce training program in both 2010 and 2011, calling the Louisiana program “the gold standard for workforce training solutions.”

• May 2012: Legislators are considering whether to use Louisiana’s “rainy day” fund to help offset a $211 million shortfall projected by the Revenue Estimating Conference. “I don’t know that there are a whole lot of options left at this point in time,” said House Speaker Chuck Kleckley (R-Lake Charles). Jindal’s office indicated that the governor would consider using the rainy day money. “We’re prepared to make reductions, but we’re open to different ideas from legislators that part of a balanced budget that doesn’t raise taxes and protects critical services,” said Jindal spokesman Kyle Plotkin.

• April 2012: Pollina Corporate Real Estate names Louisiana the most-improved state in the nation in its ranking of business-friendly states. “We have noticed an increase in the number of companies that are considering a move to the state or want to have the state evaluated as a potential location,” the report said.

• February 2012: Gov. Jindal proposes a $25.5 billion state operating budget that would close prisons, eliminate more than 6,000 state jobs, cut rates for health-care providers who treat the poor and freeze, for a fourth consecutive year, per-public basic state aid to public schools. Commissioner of Administration Paul Rainwater said a projected $895 million shortfall would mean “holding the line on certain anticipated cost increases.”

• April 2012: Southern Business & Development magazine named Louisiana as the 2011 State of the Year for the third consecutive year. Louisiana earned the highest project score per capita in the magazine’s history.

• April 2012: Rep. John Schroder (R-Covington), questioned the lack of accountability in allowing LED to offer increased tax breaks for payroll, relocation costs and corporate income and franchise taxes for businesses the state wants to attract. “It looks like we just give sort of a blank check to the Department of Economic Development, and it doesn’t come from their money. It comes from the treasury,” he said. The various state tax exemptions have cost Louisiana more than $18 billion over the past four years.

Incentives already offered by LED include Enterprise Zone, Quality Jobs, Restoration Tax Abatement, Industrial Tax Exemption, Research and Development Tax Credit, Sound Recording Investor Tax Credit, Digital Medial Incentive, Motion Picture Investor Tax Credit, Live Performance Tax Credit, Louisiana FastStart, Technology Commercialization Credit and Jobs Program, Modernization Tax Credit, Small Business Loan Program, Micro Loan Program, Bonding Assistance Program, Veteran Initiative and Mentor-Protégé Tax Credit.

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The administration’s answer to revenue shortfalls caused by corporate tax exemptions? Why, more exemptions, of course

Posted in Budget, Exemptions, Incentives, Governor's Office, Revenue on April 25, 2012| 7 Comments »

It’s long past the time when the people of Louisiana should get their collective heads out of the sand and take an objective, educated look at the state’s budgetary crisis.

The Revenue Estimating Conference Tuesday announced that the state must slash expenses by another $210 million because of drops in anticipated revenue.

The Revenue Estimating Conference, comprised of LSU economist Jim Richardson, House Speaker Chuck Kleckley (R-Lake Charles), Commissioner of Administration Paul Rainwater and Senate President John Alario (R-Westwego), monitors state expenses and revenues on an ongoing basis.

On Tuesday, the four heard a presentation from Greg Albrecht, chief economist for the Legislative Fiscal Office. The news was bleak and the four officials dropped the revenue forecast for the coming year by $304 million.

But it’s not as if no one could see this train wreck coming.

Much like the tribulations currently being visited upon the New Orleans Saints, the state’s fiscal woes are 100 percent self-inflicted.

As the Ol’ Perfesser, former New York Yankees manager Casey Stengel, would say if he were still with us: “You can look it up.”

We did.

And while it come as a surprise to members of the House and Senate, the information from the Louisiana Department of Revenue is right there in a little known but readily available publication entitled Tax Exemption Budget 2011-2012.

The real puzzle is why no one else has bothered to ferret out this data. Why go to the expense and bother to publish it if no one in a decision-making position is even going to bother to read it?

But before we get into that report, let’s take a quick look back to May of 2008, four months after Gov. Bobby Jindal took office.

The state at that time was flush with money, thanks to federal funds dumped into the state to aid in the recovery from the devastation of hurricanes Katrina and Rita.

Never content to grapple with fiscal prudency, legislative leaders and Jindal conducted a series of backroom discussions—as usual, out of eyesight and earshot of the public. Jindal emerged, beaming, to announce the good news: the highly regarded Stelly Tax Plan was being scrapped.

The bill, Senate Bill 87 by Sen. B.L. “Buddy” Shaw (R-Shreveport), rolled state income tax rates back to 2002 levels in January of 2009.

Jindal trumpeted that the bill would save single filers as much as $500 a year and joint filers $1,000.

What the governor did not say—but Albrecht did—was that single filers would have to make as much as $90,000 per year to reap the $500 savings and joint filers would have to make more than $150,000 to save the maximum $1,000.

With a median household income of $43,733 in Louisiana in 2008, the Stelly repeal, while obviously a welcome break for the wealthy, was of no benefit whatever to middle- and low-income Louisianans.

Albrecht also said the total cost to the state treasury would be about $300 million per year, beginning in the 2009-2010 budget cycle.

Perhaps at this point it’s worth reiterating the most recent loss of revenue as projected by the Revenue Estimating Conference: $304 million.

Now to the Revenue Department’s Tax Exemption Budget.

The document is a mind-numbing 409 pages but one does not have to examine every page to see what has happened in Louisiana over the past few years.

In fact, pages 6 and 17 pretty much tell the story.

Page 17 provides a year-by-year summary of revenue losses from various tax exemptions granted by the state. The exemptions include corporate and individual income taxes, sales taxes and severance taxes, among others.

The combined four-year total for all tax exemptions shows that the state has lost a little more than $18 billion since the 2008-2009 fiscal year, which began on July 1, 2008, six months after Jindal took office.

Much has been made by the administration of the unfunded accrued liability (UAL) of the state’s four retirement plans.

That combined UAL? $18.3 billion.

The breakdown shows a four-year loss of $5.6 billion in corporate income tax exemptions and another $5.6 billion in sales tax exemptions. Individual income tax exemptions account for an additional $4.2 billion and severance tax exemptions were another $1.5 billion.

Page 6, however, was the most revealing in that it illustrates the disparity between the corporate income taxes paid and the sales and income taxes paid by individuals in Louisiana in Fiscal Year 2010-2011.

• Corporate income taxes—$198 million;

• Estimated corporate income tax exemptions—$1.46 billion;

• Total potential collections—$1.58 billion;

• Percentage of corporate income tax loss—88.1 percent.

The state was not nearly so generous with individuals.

• Total sales tax collections—$2.67 billion;

• Estimated sales tax exemptions—$1.39 billion;

• Total potential sales tax collections—$4.06 billion;

• Percentage of sales tax loss—34.3 percent.

Sales taxes, of course, are paid by everyone. Even the poorest of the poor pay the same sales tax rates as the most wealthy, making sales taxes one of the most unfair.

Individual income tax collections were no kinder.

• Total individual income tax collections—$2.39 billion;

• Total individual income tax exemptions—$1.13 billion;

• Total potential individual income tax collections—$3.52 billion;

• Percentage of individual income tax loss—32.1 percent.

To recap, the state collects only 11.9 percent of the potential corporate income taxes while exempting the remainder.

With sales and individual income tax, however, collections were 65.7 percent and 67.9 percent, respectively.

With this administration, the solution such an uneven playing field is obvious: more corporate tax breaks.

Jindal is pushing a package of bills that will award new tax breaks to businesses that are considering relocating or expanding into Louisiana.

And of course, the House overwhelming approved all three bills even though the Legislative Fiscal Office estimated the state could lose millions of dollars in tax income.

But Rep. Joel Robideaux (R-Lafayette) said the cuts would generate more tax dollars for Louisiana than the breaks will cost the state in lost revenue.

One bill, approved by a vote of 86-9 will give a payroll tax cut of between 6 percent and 15 percent for creating high-paying jobs with health care benefits. The question that was never asked was, where are the lower-paying jobs?

A 25 percent rebate over five years on relocation costs for companies moving corporate headquarters to Louisiana was approved by a vote of 81-13.

Finally, a bill calling for a different way to calculate state corporate income and franchise taxes, thereby lessening tax payments for participants, passed unanimously, 100-0.

So, while Jindal’s Deputy Chief of Staff Kristy Nichols testifies in favor of gutting retirement benefits for state employees, lamenting, “We’re drowning in debt,” her boss keeps on keeping on with lucrative tax breaks for his corporate friends, many of them campaign donors.

The rest of you?

May 15 is the deadline for paying your “fair share” in state income taxes.

Don’t be late. The state needs the revenue.

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‘Honey, I shrunk the state revenues’: corporate sales & income tax exemptions skyrocket on Jindal’s watch

Posted in Exemptions, Incentives, Governor's Office, Revenue, Taxes on February 19, 2012| 5 Comments »

Gov. Bobby Jindal loves to use looming budget deficits as justification for cutting jobs, shredding state retirement, and privatizing state agencies as ways to bring the state budget into balance and to make state government more efficient and accountable.

But if you examine the state tax exemptions that have become the norm since Jindal took office, you would have to conclude that the state’s financial plight is of his own doing.

The state did not have to fight off a threatened $1 billion deficit last year nor was it really necessary to look for ways to avoid a $900 million deficit this year, a likelihood of which he has already warned legislators.

The question is, did he intentionally create the state’s fiscal crisis in order to justify dumping off the Office of Group Benefits, state prisons, Medicaid, and public education and placing thousands of state workers on unemployment and costing them medical benefits in the process? Is he exploiting a deliberately engineered fiscal crisis in order to revamp the state retirement system?

As incredible as that might sound, consider his veto last year of a 4-cent-a-pack cigarette tax because he didn’t want to impose any new taxes. Forget for the moment that the cigarette tax was a renewal, not a new tax. And forget, if you will, that he was not opposed to an increase in college tuition because, in his words, it was not a tax but a fee.

Forget, too, that his veto of the cigarette tax was in effect turning his back on $50 million a year in badly-need revenue—$12 million directly from tax revenue and an additional $38 million in federal matching funds.

And finally, don’t remind him of his bumbling, stumbling, fumbling of two federal grants totaling $140 million. Those included $60 million in funding for early childhood education and $80 million to fund broadband internet connection to 21 rural parishes.

And the reason there is a crisis in the state retirement systems is because the Legislature and Jindal simply reneged on the state’s contribution requirements.

So clearly, the administration won’t consider new sources of revenue—like maybe eliminating some of the exemptions. Instead, the obvious solution is to require state workers to chip in an extra 3 percent to their retirement contributions.

It would be one thing if that 3 percent went to actually fund their retirements or even to pay down the UAL. Instead, it’s to be used to bail Jindal and the Legislature out of the consequences of their moronic tax policies.

While Jindal has never met a tax he liked, all the corporate tax exemptions that have gone into effect on his watch should raise a few eyebrows. Going into his fifth year in office, there have been at least 113 bills filed that deal with tax exemptions of one description or another. Some of those were duplicates and not all of them passed, of course.

Nor did all of them call for corporate tax breaks, but most did.

Figures provided by the Louisiana Department of Revenue reveal that for Fiscal Year 2006-07, the year before Jindal took office, corporate income taxes were $721 million against exemptions of $972 million.

For FY 2009-10, the last year for which figures were available—and three years into his first term—corporate income taxes dropped by more than half to $435 million while exemptions surged to $1.3 billion.

In some cases, there was not even an accounting of money lost to corporate income tax exemptions. Take the Louisiana Superdome and Zephyr Field, for example, both managed by SMG, Inc.

The Department of Revenue Report on Corporation Income Tax, under the heading “Exemption for Events, Activities, or Enterprises Conducted in Domed-stadium or Certain Baseball Facilities,” made the following observation:

“Any event, activity or enterprise conducted in certain domed-stadium (that would be the Louisiana Superdome) or any open baseball site owned and operated by the state (Zephyr Field), or any of its agencies, boards or commissions, with a seating capacity of at least 10,000 and has a professional sports franchise that participates in Class Triple A professional baseball is exempt from all state and local taxes. The purpose of this exemption is to promote use of the domed stadium.”

Under the heading “Beneficiaries,” was the explanation that “The increased use of the dome-stadium facilities benefits the state and its residents.”

Under the heading “Estimated Fiscal Effect,” the explanation was even more ambiguous. “We are unable to estimate the fiscal effect; there is no reporting requirement for the data.”

This is an exemption that went into effect on May 23, 1985, more than 26 years ago and there is no way to estimate the fiscal impact? There is no reporting requirement for the data?

Well, neither was any data as to the fiscal impact of the sales tax exemption for “state-owned domed stadiums” or sales by “certainly publicly-owned facilities.” Neither was there any explanation as to why state-owned domed stadium was pluralized.

At the same time, sales tax collections for 2006-07 totaled $2.8 billion while exemptions came to $688 million. By 2009-10, sales tax collections had dropped to less than $2.5 billion while exemptions had leaped fivefold to $3.9 billion.

The Stelly Plan that had eliminated sales taxes on food, drugs and household utilities and replaced them with income taxes was repealed under Jindal. That contributed to a decrease in individual income tax collections from $3.1 billion to $2.2 billion while exemptions more than doubled, from $519,000 to $1.1 billion.

The year-to-year total tax revenue losses from all exemptions are as follows:

$1.07 billion in FY 2004-05; $1.13 billion in FY 2005-06, and $2.55 billion in FY 2006-07.

The projected revenue loss for FY 2007-08 was $2.57 billion and $2.8 billion for FY 2008-09, according to the Department of Revenue report for FY 2006-07, former Gov. Kathleen Blanco’s last year in office.

Instead, the actual revenue lost to exemptions for 2007-08 was $6.7 billion, $4.1 million more than the projections. It was more of the same for 2008-09, when lost revenue was $7.2 billion, more than double the estimate. For FY 2009-10 tax exemptions accounted for revenue losses of $7.1 billion and were projected to drop slightly to $6.68 billion for the fiscal year ended last June 30 and back up slightly to $6.8 by June 30 of this year.

While all these figures admittedly are mind-numbing, it is nevertheless important to know that the five-year (FY 2004-05 through FY 2008-09) loss of revenue to the state treasury comes to $18.7 billion.

The combined unfunded accrued liability (UAL) of the state’s four retirement systems?

$18.3 billion.

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WikiLeaks reveals Jindal’s ambitious plans for second term

Posted in Campaign Contributions, Charters, Contract, Contracts, Economy, Exemptions, Incentives, Governor's Office, Higher Education, House, Senate, Layoffs, Legislature, Legislators, Privatization, Supriya Jinda Foundation, Taxes on April 1, 2011| 10 Comments »

Gov. Bobby Jindal has outlined an ambitious program for his second term of office, including the privatization of the Louisiana Legislature, state colleges and universities, the sale of all state roads and highways and bridges to private concerns, and rapid expansion of the state’s charter school system, all to be controlled by private entities.

His plans for the state, which he calls the “Piyush Push,” were revealed by WikiLeaks which published a series of emails between Jindal and corporate campaign supporters who have contributed millions of dollars to Jindal’s wife’s charity, the Supriya Jindal Foundation for Louisiana’s Children. Upon learning of the WikiLeaks report, the governor called a press conference to explain his programs.

The privatization plan calls for the takeover of the Louisiana Legislature by a corporate board made up of the CEOs of Louisiana’s larger corporations and Wall Street bankers, including AT&T and Goldman Sachs.

The operating boards of state colleges and universities would be merged into a single governing board with board members serving at Jindal’s pleasure. An obscure clause in his plan would allow him to retain control of appointments even after he leaves office. The so-called super board would be comprised of major contributors who would purchase stock shares in the universities. Board members would be allowed to send their elementary- and high school-age children and grandchildren to state charter schools.

“We are not going to raise taxes on the people of Louisiana,” Jindal said at the hastily called press conference attended only by reporters from the Baton Rouge Business Report. “We are going to run these universities like a business. Tuition will be adjusted to a level comparable to that of our nation’s finest institutions, the Ivy League schools, of which I am an alumnus. The board members will not draw per diem or salaries for their services but we anticipate they will profit from their sacrifice and hard work through stock ownership and lucrative stock options in the universities,” the governor said.

“Again, I want to reiterate that we are not going to increase taxes but the new owners of state roads, highways, and bridges will certainly be free to charge a modest usage fee for travel on their byways and bridges,” Jindal said. “People who drive cars should understand that use of roads and bridges is a privilege, not a right and that a usage fee is not the same as a tax; it’s a fee. We believe that these usage fees will offset the need for any increase in gasoline taxes.”

As for the future of the legislature, Jindal said it will be downsized from the current membership of 144 to 12 white males who will inherit all current campaign contributions remaining and accruing to the 144 outgoing legislators. The only way an African-American would be appointed would be in the event of a class action lawsuit by representatives of minority groups. “It almost worked with the Board of Regents,” the governor said in defending his legislative plan.

A few legislators voiced reservations with the manner in which Jindal is moving to privatize their institution, but after having gone along with the governor in other privatization endeavors, most indicated they would not resist the new austerity moves by the governor. Nor was there any immediate indication that legislators would attempt to invoke the separation of powers doctrine under which the legislature has heretofore been largely independent of the governor’s office.

Sen. Carl Spackler of Bushwood, however, was one who vowed he will not vote in favor of privatization of the legislature. “I believe the legislative branch of government is protected in the Constitution somewhere and I’m going to read up on that,” Spackler said. “If I’m correct, I’m not going to sit still for him putting me out of a job. Who does Jindal think we are, state employees? I worked hard for my GED.”

But Jindal was emphatic about pushing for complete passage of his austerity package, saying there would be no compromise. “I want to emphasize that these moves are in keeping with my ‘more is less’ philosophy for all government,” he said. “For those who may question these actions, I would say to them, ‘Quit whining and work smarter.”

Neither is Jindal considering an increase in tobacco taxes. “Smoking is a private decision, an individual right, and smokers should not be penalized for exercising that right,” he said. “We are, however, imposing a significant surcharge for abortions to encourage the notion that life is sacred and women should not make such decisions too lightly. Again, I want to emphasize this is not a tax.”

He said he is also planning to sharply reduce the number of state employees. One example of his layoff plan would require every Louisiana citizen who is unwilling or unable to complete the process on-line to appear at a central location in Baton Rouge, Shreveport, Monroe, New Orleans, Alexandria, Lafayette, or Lake Charles for driver’s license applications and license renewals. “I don’t see why we can’t get by in each office with one or two persons,” he said. “How difficult can it be to issue a driver’s license?”

He also announced plans to double the size and the salaries of the state’s Homeland Security Office while at the same time saying he would cut staff at state hospitals to a single physician and nurse per specialty at each facility. “I believe with fewer doctors, people will find a way to stay healthier,” Jindal said.

“Again, I want to say we are not going to raise taxes,” he said. “That is not an option. We are, however, going to raise the annual deductible on medical care to $12,500 per year, increase co-payments to $50, and at the same time, we’re asking state workers to kick in another 75 percent on employee premiums on health care coverage and retirement benefits.”

Jindal used the press conference to take yet another swipe at big government in general and President Obama in particular. “The bloated federal government should take a look at Louisiana and say, “That’s how things should be done,” he said. “We’re proving in our open and transparent administration that our ethics are above reproach and we’re wiping out our deficit with good, open and honest government,” he said as the CEOs of AT&T, Northrop Grumman, Worley Catastrophe Response, and Blue Cross/Blue Shield stood behind him.

“I would once again call upon the Obama administration to repeal its drilling moratorium in the Gulf of Mexico so that our oil companies can make a decent living,” Jindal said.

Jindal said he would sell all public schools to private entities so that they could be converted to charter schools. He said the move would be a model of efficiency for the rest of the nation. “I believe the 25 percent loss in Detroit’s population over the past decade, for example, could be reversed simply by converting to my proposed system for Louisiana schools,” he said.

“I fully anticipate there will be a bidding war for acquisition of schools as public finance will guarantee a solid return for investors,” Jindal said. “Of course my administration will invest the funds derived from the sale so that cash flow will support scholarships to the schools or such other General Fund needs as might arise in the budget balancing process.”

He said those children unable to take advantage of the improved educational opportunities will be housed in dormitories near the Nucor Steel Mill in St. James Parish, the Tournament Players Club golf course in Jefferson Parish, and the Foster Farms chicken processing plant in Union Parish. “There, they will be given hands-on training to meet the plants’ needs,” he said. “If all else fails, they would certainly be qualified to become slag haulers, caddies at state-run golf clubs, or chicken pluckers.”

To insure that the schools will succeed and will demonstrate high test scores, students will be carefully pre-screened before being accepted for enrollment, Jindal said. The schools will be run by boards comprised of members selected by the owners. Owners and board members, along with the college and university Super Board members, will be given first choice of the available seats in the school for their children, as will those of select employees.

“I am fully aware that all this will require Constitutional amendments but I fully expect the voters of Louisiana to continue to support our programs. But just in case, beginning here and now, I am stepping up my schedule of visiting churches to garner popular support for my proposals. Beginning Sunday and continuing through Election Day, I will be visiting churches all over north Louisiana. My agenda will consist of three things: Sunday morning and Sunday evening services as well as Wednesday night prayer meetings.”

And that’s the way it is on Friday, April 1, 2011.

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Former Louisiana Budget Director says little has changed: politics still wins out over pragmatism

Posted in Budget, Contract, Contracts, Education, Exemptions, Incentives, Governor's Office, Higher Education, House, Senate, Legislature, Legislators, Politicians, Taxes, Transparency on January 27, 2011| 1 Comment »

The former state budget director says little has changed in the Louisiana Legislature’s spending mentality in the decade since he retired.

Stephen R. Winham, who served as the state’s budget director from 1988 to 2000 and as a budget analyst for the Department of Corrections budget, is also a vocal critic of the proliferation of professional service contracts.

“Back when the State Budget Office actually had some clout, budget analysts did a common sense review of professional services contracts,” he said. “But then Governor (Dave) Treen decided that the budget office had too much power and that no one should be questioning things his cabinet appointees did.”

Winham said after that, central oversight of state agency expenditures began to decline “and now nobody routinely second-guesses the need for professional services contracts above the agency level.”

The State of Louisiana Annual Report for 2008-2009, the latest report available, shows that the state issued more than $5 billion in contracts, fully 20 percent of the state budget. That figure is somewhat misleading because 1,083 contracts for $2.9 billion, nearly 60 percent, were in the form of cooperative endeavor agreements with other public agencies; $213.4 million was for interagency contracts, and $79.4 million was for intergovernmental contracts.

Still, the report showed there were 1,275 consulting contracts in the amount of $1.4 billion; 1,292 professional contracts totaled $178 million, 160 personal contracts came to another $7.4 million, and 1,531 contracts for social services came to $288.9 million.

Winham said during his tenure, his office presented an annual budget to the Legislature that cut funding to programs “below the line” of available funds. He said that list was a best effort at a fair representation of what people want and need from state government. “Every year the program ranked dead last on our list was funded,” he said. The program consistently ranked last by his office was an appropriation of about $3,000 for CODOSPAN (the Council for the Development of Spanish). It was the Spanish equivalent of CODOFIL (the Council for the Development of French in Louisiana),” he said. “Always last on our priority list and always funded.”

He said there were other local subsidies (now called Non Governmental Organizations, or NGOs) that were always funded, like basketball tournaments and festivals.

He said his worst experience was coming to realization that “when it comes down to a choice of politics and what makes the most sense, politics always wins. In a political environment, you can’t avoid that but when politics always supersedes everything else, it’s always frustrating.” His best accomplishment, he said, was getting the budgetary process automated and available on line. “We made the budget more accessible to the citizens.”

Given a choice, he said he would make a different career choice. “I felt I was spinning my wheels,” he said. “I would not do it over. I felt I was accomplishing things early on but I became less and less effective. The Joint Legislative Committee on Appropriations just started ignoring my presentations. Everything was just a formality,” he said.

“They say all politics are local, and they’re right,” he said. “That’s why (Gov. Bobby) Jindal goes all over the state handing out those little checks to local governments. It’s the same reason legislators want to protect their turf with those local appropriations and it’s also the reason Jindal won’t veto any of those appropriations.

“Jindal is always thinking about the next thing,” Winham said. “We need a governor who will think about the now.”

He said government is not a business. “When a candidate says he is going to make government operate like business, it’s just rhetoric. Government and business do not exist for the same purpose; government exists to serve the people and business exists to make a profit.”

Still, he expressed concerned about the Legislature’s apparent inability to rein in pork spending. He said he agrees with State Treasurer John Kennedy’s assessment that until individual legislators, working together in large numbers, begin to take their responsibility seriously, funding decisions will remain irrational, irresponsible, and reckless.

Winham said former Gov. Buddy Roemer was a strong fiscal conservative but where he cut in some areas, he added in others, so he never got credit for any cuts.

“I was surprised once when I did an analysis and found the least budget growth occurred during one of Edwin Edwards’s terms, his third term, I believe,” he said.

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