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Archive for the ‘Governor’s Office’ Category

The rise of Jane Smith from defeated senate candidate to Secretary of Revenue–and her bizarre mission statement

Posted in Governor's Office, Legislature, Legislators, Revenue, Uncategorized on June 18, 2012| 9 Comments »

A few more facts emerged about the sudden rise of former State Rep. Jane Smith (R-Bossier City) from defeated state senate candidate to undersecretary of the Department of Revenue and finally, to the secretary’s office itself.

For those who have been riveted to the NBA playoffs, the College World Series or the reprise of Dallas on network television, what transpired over the past few days was that Gov. Piyush Jindal was alerted to a possible fiscal disaster over a bill he signed into law back in 2009 and decided something had to be done.

Of course, whenever anything occurs in this state that reflects badly on Jindal, it is always someone else who pays the price. That’s just the way the petulant little man does things—like a spoiled toddler pitching a tantrum in Wal-Mart.

As directed by the act signed by Jindal pursuant, incidentally, to a bill authored by Smith herself, Revenue Secretary Cynthia Bridges issued an emergency ruling listing vehicles eligible for tax rebates of up to $3,000 on the purchase of alternative fuel vehicles.

The Legislative Fiscal Office initially projected a five-year cost of $900,000 but upon the introduction of flex fuel vehicles following passage of the act, that estimate soared right into the stratosphere, to $100 million.

The most obvious reaction to this situation was widespread panic which in turn resulted in the only logical solution: throw someone under the bus.
That someone, of course, was Bridges, who has served three different governors over her 12 years as the head of Revenue.

But here’s the real kicker and some really bizarre irony.

Jindal almost immediately named Smith as her successor.

What are Smith’s qualifications for the position? Good question.

She lost her senate race last fall despite a $2,500 contribution from Jindal.

Almost immediately, she was offered the position of deputy secretary of an office for which she had zero background.

And when Bridges “resigned” last Friday, Jindal moved at warp speed in naming Smith to the post, a pretty good indication that she was being groomed to replace Bridges at the first convenient opportunity. The alternative fuel tax credit fiasco gave Jindal that opportunity. The ink was still wet on Jindal’s announcement of Smith’s appointment when Bridges stepped down, no doubt given a hard shove on her way out the door.

Jindal said those who have already received their tax credits will not be penalized but for those whose amended returns are still pending, the jury is still out. One must wonder why there would be any question since the amendments were filed at a time when the law was still on the books.

But back to that appointment of Smith to the $107,500 per year deputy secretary’s post in January, an appointment that rivals several other questionable appointments—most notably that of former State Rep. Noble Ellington (R-Winnsboro) to the second in command position at the Department of Insurance at a salary of $150,000 per year. Even as he was being appointed, Ellington admitted he had no experience or background in insurance.

No matter. Both Smith and Ellington were members in good standing of the American Legislative Exchange Council (ALEC) and Ellington had just completed a year as national president of the model legislation-writing organization. Last August, Ellington hosted ALEC’s national convention in New Orleans at which time the organization awarded Jindal with its coveted Thomas Jefferson Freedom Award for outstanding public service.

After that heady experience, what else could Jindal do but put the two up for fat positions at six-figure salaries while he simultaneously tried to gut retirement benefits for rank and file, in-the-trenches state employees?

Even Smith, it seems, was baffled at her good fortune.

Following her January appointment as deputy secretary of Revenue (remember, it’s Revenue, not Education), she promptly showed up at an education meeting. It wasn’t enough that she presented herself at a function at which her new position had no real authority, but she proceeded to prattle on and on about her lack of qualification and her willingness to help the governor.

“The governor’s office called me back in November and told me a position had opened up in Revenue,” she told bystanders who were understandably aghast.

“I told them I didn’t know a thing about revenue, or taxation, or nothing like that but they said not to worry about that, to come on by and discuss it anyway,” she bubbled.

“I’m standing there thinking, ‘Lady, you need to shut up,'” one observer who witnessed her gushing said.

“So they offered me the job even though I don’t know a thing about revenue,” Smith continued. “So I’m just doing everything I can to assist the governor promote his agenda and that’s why I’m here (at an education meeting) today—to help the governor with his agenda.”

And that apparently is her mission as Secretary of Revenue: to help the governor with his agenda.

And that apparently is also the way things are done in this administration.

They should be very happy together.

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Notable Quotables (in their own words)

Posted in Governor's Office, Notable Quotables, Revenue, Taxes on June 16, 2012| 3 Comments »

“It will be determined through the process of the proper procedure of rule-making.”

–Gov. Piyush Jindal mouthpiece Kyle Plotkin, trying to explain how the state will deal with pending tax credits for alternative fuel vehicles pursuant to a bill signed into law by Jindal in 2009. Instead of a $1 million cost to the state as originally anticipated, new projections indicate the cost could be as much as $100 million

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Excrement hits oscillating air circulation device in flap over alternative fuel tax credit: Revenue Secretary takes the fall

Posted in Exemptions, Incentives, Governor's Office, Legislature, Legislators, Revenue, Teague on June 16, 2012| 7 Comments »

The unlikely scenario reads like something out of a Woody Allen parody (for some reason, Sleeper comes to mind.):

State representative in 2009 introduces House Bill 110 that offers generous tax credits (up to $3,000) to those who purchase certain types of automobiles that operate on clean-burning alternative fuels.

Legislative Fiscal Office in its fiscal notes on the bill, project a total five-year cost to the state of $907,000.

Besides the original sponsor, 83 other House members sign on as co-sponsors of the bill. It passes the house, coincidentally, by a vote of 84-12. In the Senate, the vote is 34-0.

Governor, who never met a tax exemption he didn’t like, signs HB 110 into law as Act 469, creating the Alternative Fuel Tax Credit. Everyone is happy.

Fast forward two years to 2011: House member who authored HB 110 is term limited so she decides to seek a Senate seat, thus circumventing the term limitations law as so many others have done.

She loses her race despite an infusion of $2,500 from the governor himself.

The governor, nonetheless grateful for her no-taxes stance in her doomed Senate campaign, in January of 2012 awards her with a job as the second in command of the state’s Revenue and Taxation Department. This despite the fact that she has zero experience and/or qualifications in matters of revenue and taxation; her background is that of a school teacher who also once completed a course in “school principalship.”

Fast forward to April 30: Secretary of Revenue and Taxation and presumed boss of former representative-now-assistant-secretary-of-revenue-and-taxation issues Declaration of Emergency as a means to adopt a rule to administer the tax credit for conversion of vehicles to alternative fuel usage “as provided under R.S. 47:6035.”

R.S. 47:6035, of course, is the number of the state statute pursuant to the passage of HB 110 and its signing into law by the governor as Act 469 of 2009. The statute (R.S. 47:6035) says so. The statute also says in Section G: “The secretary of the Department of Revenue in consultation with the secretary of the Department of Natural Resources shall promulgate rules and regulations in accordance with the Administrative Procedure Act as are necessary to implement the provisions of this Section.”

So, on April 30, the secretary of Revenue issued her Declaration of Emergency in accordance with the statute, written by her under-secretary, passed by the legislature and signed by the governor. The declaration lists 112 models of cars and trucks that qualify, far more than originally anticipated, because of the emergence of “flex fuel” factory vehicles designed with the ability to burn ethanol.

Fast forward to mid-June: The anticipated cost to the state, originally estimated at $907,000 by the Legislative Fiscal Office is now 100 times that, or $100 million, according to the chairman of the House Appropriations Committee.

The Senate president, who voted for the measure three years before and who kept himself busy in his CPA firm filing tax amendments so his clients could claim the credit, was apparently unaware of the ramifications until after a fellow senator blew the whistle.

That senator, who also voted for the bill in 2009, says he alerted the secretary of the Department of Revenue and the commissioner of administration to the potential costs to the state if the bill were allowed to stand (after, of course, filing for his own $3,000 tax credit for a vehicle he had purchased). But neither informed the governor.

Neither did the chairman of the House Appropriations Committee–not even after he had filed for the $3,000 tax credit on each of the two vehicles he had purchased (does anyone see a trend here?).

As might be expected, the excrement hits the Westinghouse oscillating air circulation device and the governor’s office more closely resembles a chicken house invaded by an unwelcome possum than control central where cooler heads are expected to prevail. There is gnashing of hands and wringing of teeth (they can’t even seem to get that right) as everyone runs around wailing, “The sky is falling! What to do? What to do?”

Suddenly, someone came up with the obvious answer. Too bad the person has to remain anonymous because the solution was so obvious: fire the secretary of the Department of Revenue who was so brazen as to issue such an insane directive—or at least force her to resign—but don’t leave any marks; it must be a clean kill.

Never mind the fact she has served three governors during her tenure and no matter that she was carrying out her job to the letter of the law: somebody’s gotta go and it may as well be her. The governor can then appoint the assistant secretary, his old political crony, to the post—just the way he planned to all along. Let the secretary take the fall. What could be better? Brilliant!

Of course all this leaves a few unanswered questions:

• Why did the senator not go to the governor with his concerns in the first place?

• If the secretary of the Department of Revenue has to go because of her failure to pass the word up the line to the governor, what about the commissioner of administration? Is he not equally complicit or derelict?

• What about all those high-salaried lackeys with whom the governor surrounds himself—his communications director, his chief of staff, his executive counsel? Don’t their jobs include the monitoring of pending legislation and its effects? Where were they when all this was going down?

• And the Senate president should have seen the writing on the wall with all those tax amendments he was filing on behalf of his clients—unless he was too preoccupied with making money from his fees.

• How about the governor himself? He signed the bill creating the law with which his revenue secretary was complying.

None of that matters, of course, in this bizarre script. The revenue secretary must be the scapegoat and fall on her sword.

After all, that’s the way this governor likes to do things.

Name one time he has admitted a mistake—from the ill-conceived berms, to the firing of good public servants (too many to name here as the toll keeps mounting), to the privatization of the Office of Risk Management (a fiasco in its own right), to attempts at public employee retirement reform, to issuing hundreds of vouchers to “schools” that are all but non-existent, to backing Rick Perry for president.

His is the finely-honed practice of accepting credit and assessing blame.

As a final twist to this plot, the governor now says that he can’t promise that any outstanding applications for credit on amended returns from 2009, 2010 and 2011 will be honored, leaving open the possibility of litigation by auto buyers who have filed or will file amendments in good faith in accordance with a law already on the books–that the governor signed.

Sorry, folks. Woody Allen just sent word that he has rejected the script as being far too improbable for any moviegoer to believe.

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131-1 vote for transparency and accountability on EZ incentives: but that one vote–Piyush’s veto–prevails

Posted in Auditor, Business, Economy, Exemptions, Incentives, Governor's Office, Legislature, Legislators on June 13, 2012| 1 Comment »

Ninety-five of her fellow House members agreed with Rep. Katrina Jackson (D-Monroe).

Her HB 1104 that would have required state agencies which administer tax credits, exemptions and rebates to report certain information needed by the Legislative Auditor’s Office in determining whether each tax credit, exemption or rebate was “effectuating the purpose they were enacted to achieve” passed 96-0 in the House and by a 35-0 vote in the Senate.

In the end, it appears that Gov. Piyush Jindal had the only vote that counted and he voted no in vetoing the bill, proclaiming that safeguards against abuses were already in place.

Never mind that over the past four years, Louisiana has given away $18 billion in corporate tax exemptions, plus about $300 million per year lost by the repeal of the Stelly Plan.

Almost lost in all of this is an April 25 Legislative Auditor’s report which says in effect that those safeguards Jindal alluded to don’t really work.

The Louisiana Department of Economic Development’s Enterprise Zone program “does not meet the statutory purpose of the program, which is to stimulate business and industrial growth in enterprise zones,” the 17-page audit report says.

The state’s EZ, program is a jobs incentive program that provides Louisiana income and franchise tax credits to businesses hiring at least 35 percent of net, new jobs from one of four targeted groups:

• Residency;

• New employees who heretofore were receiving some form of public assistance;

• New employees below the ninth grade proficiency in reading, writing or math;

• New employees who are unemployable by traditional standards.

Enterprise zones are areas with high unemployment, low income or a high percentage of residents receiving some form of public assistance. A business must create permanent net, new jobs at the EZ site.

Such jobs must be created upon the start date of the project or of construction and either increase current workforce by 10 percent within the first 12 months or create a minimum of five net, new jobs within the first 24 months.

When the state’s Enterprise Zone, or EZ, program was created in 1981, it was designated to stimulate growth in enterprise zones by providing tax incentives to businesses that locate to and operate in those areas. Act 977 of 1999, however, eliminated the requirement that businesses must locate to or operate in an enterprise zone to qualify for EZ incentives, the report noted.

Benefits to the employer include the following:
• A one-time $2,500 credit per new job;

• Rebates of 4 percent of sales taxes on materials, machinery, furniture or equipment;

• The earning of a 1.5 percent refundable investment tax credit.

Businesses may receive EZ incentives for creating part-time jobs, jobs that provide a smaller economic impact and which provide no employee benefits such as health care or retirement plans. This means a business creating a single 20-hour part-time minimum wage ($7.25 per hour) job with an economic impact of $7,450 receives the same EZ incentive as a business creating a single 35-hour full-time minimum wage job with an economic impact of $13,195, plus benefits, the report said.

Moreover, a business is not even required to be located in an EZ and does not have to invest money—only create additional jobs—to qualify.

Louisiana also approves retail businesses, where jobs easily transfer or shift from one business to another with no real gain in the number of jobs, to receive EZ program incentives.

Finally, Louisiana law prohibits the disclosure of the amount of incentives received by businesses and in so doing, denies the public of its right to know how its tax money is spent.

The audit says that during calendar years 2008 (Jindal’s first year in office) through 2010:

• 632 of 930 businesses (68 percent) receiving EZ program incentives were located outside a designated enterprise zone;

• Those 632 businesses received approximately 123.9 million (61 percent) of the $203.1 million in total EZ program incentives granted;

• Approximately $3.9 billion (60 percent) of the $6.5 billion in capital investment by the 930 businesses receiving incentives was located outside a designated EZ;

• Approximately 12,570 (75 percent) of the 16,760 net new jobs created by the 930 businesses were located outside an EZ.

The number and dollar amounts of EZ incentives have increased dramatically since Jindal took office in January of 2008. In 2007, the year before he took office, there were $25.4 million in EZ program incentives approved. In his first two years in office, 2008 and 2009, the amount was about $60 million for each year and in 2010, the amount jumped to $109.6 million, according to information provided by the Louisiana Department of Revenue.

The Department of Revenue could only provide date by fiscal year whereas all other data were from calendar years, thus the difference between the $229.8 million reported by Revenue for the three years of 2008-2010 as opposed to the $203.1 million reported by the Louisiana Department of Economic Development.

Using Revenue’s numbers, the $229.8 million approved during Jindal’s first three years in office eclipsed the previous seven fiscal years’ combined total of $202 million.

“We also determined how Louisiana’s EZ program differs from those in other competing neighboring states—Alabama, Arkansas, Mississippi and Texas,” the audit report said.

Some of the differences included:

• Alabama and Mississippi require businesses to be located in an enterprise zone in order to receive EZ program incentives;

• All four neighboring states exclude retail industries from EZ incentive program qualification;

• None of the four allows businesses to include part-time employees;

• Alabama, Arkansas and Texas require companies to prove the creation of net new jobs before receiving any EZ program incentives. In Louisiana, businesses have up to two years to create the required minimum number of net new jobs;

• Texas requires that the names of businesses that participate in its EZ program and the amounts of incentives each business receives be made public. Louisiana law prohibits the disclosure of the amount of incentives received by each business.

The report suggested that these shortcomings be remedied by corrective legislation.

That, in essence, is what Rep. Jackson attempted to do with her HB 1004 that was approved unanimously in both chambers.

But Gov. Piyush Jindal would have none of it.

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Phil Collins or Cyndi Lauper? Take your pick but we can see Jindal’s ‘True Colors’ with vivid clarity in four vetoed bills

Posted in Exemptions, Incentives, Governor's Office, Legislature, Legislators, Uncategorized, Veto, tagged , , on June 10, 2012| 10 Comments »

But I see your true colors
Shining through;
I see your true colors…
—True Colors (Lyrics by Billy Steinberg, Tom Kelly)

Whether you prefer the Cyndi Lauper or Phil Collins version, nothing more aptly—or more shamelessly—describes the sinister motives of Gov. Piyush Jindal in vetoing four legislative bills than the first three lines of this song.

It seems rather curious that Jindal, such an avowed advocate of openness, would veto SB 629 by Sen. Ronnie Johns (R-Lake Charles) that would have required increased accountability from the state’s Bayou Health and Behavioral Health Partnership programs.

Of course, it might be more easily understood when we learn that Bayou Health contributed $10,000 to Jindal’s gubernatorial campaigns – $5,000 in 2003 and another $5,000 in 2009.

It would also appear rather disingenuous for the governor to veto a bill calling for the convening of a task force to study wage disparities between men and women in the public sector.

But it is simply unconscionable for a governor who purports to support transparency and accountability to veto HB 1104 that would have done just that.

It likewise is two-faced, duplicitous and smacks of a blatant double standard for Jindal to veto HB 1106. The bill, after all, provided for tax rebates, something we thought equated to an economic Holy Grail in the eyes of this governor.

But I see your true colors
Shining through;
I see your true colors…

Both HB 1104 and HB 1106 were authored by State Rep. Katrina Jackson (D-Monroe).

Both bills, by themselves, did far more for transparency, accountability and even-handedness than everything Jindal has done in his entire four-plus years in office.

Both bills were passed unanimously by the House, both by votes of 96-0 with nine absences.

Not voting on HB 1104 were Speaker Chuck Kleckley (R-Lake Charles), Jerry Gisclair (D-Larose), Hunter Greene (R-Baton Rouge), Bob Hensgens (R-Abbeville), Bernard LeBas (D-Ville Platte), Joseph Lopinto, III (R-Metairie), Harold Ritchie (D-Bogalusa), Joel Robideaux (R-Lafayette) and Patricia Smith (D-Baton Rouge).

Those absent for the vote on HB 1106 were Jared Brossett (D-New Orleans), Gordon Dove (R-Houma), Brett Geymann (R-Lake Charles), Gisclair, James Morris (R-Oil City), Kevin Pearson (R-Slidell), John Schroder (R-Covington), Scott Simon (R-Abita Springs) and Kirk Talbot (R-River Ridge).

HB 1104 also passed unanimously in the Senate (35-0 with four absentees) and only four senators voted against HB 1106. Absent on the HB 1104 vote were Sens. Jack Donahue (R-Mandeville), Jean-Paul Morrell (D-New Orleans), Ben Nevers (D-Bogalusa) and Mike Walsworth (R-West Monroe).

Voting against HB 1106 in the Senate were Robert Adley (R-Benton), Conrad Appel (R-Metairie), Dan Claitor (R-Baton Rouge) and Donahue. Absent were Jody Amedee (R-Gonzales) and Barrow Peacock (R-Bossier City).

All four were good bills.

All four were vetoed by Piyush “I have the job I want” Jindal.

But I see your true colors
Shining through;
I see your true colors…

HB 1104 would have required that state agencies which administer tax credits, exemptions and rebates to report certain information needed by the Legislative Auditor’s Office in determining whether each tax credit, exemption or rebate was “effectuating the purpose they were enacted to achieve.”

“More than half of Louisiana’s (annual) revenue is expended to pay for these credits, rebates and exemption,” Jackson said after being informed of the vetoes. “It is important that we review them to determine whether the state is truly benefitting.”

Louisiana has granted more than $18 billion in corporate tax exemptions over the past four years, according to information obtained from state records. Jackson said she is attempting to ensure that the state is getting its money’s worth in jobs and economic development.

Jindal disagreed.

But I see your true colors
Shining through;
I see your true colors…

HB 1106 would have allowed taxpayers who donate to public schools to receive tax rebates.

“This bill supports public schools and has a $10 million statewide cap,” Jackson said of her bill.

After being amended in committee, the bill would have offered the following tax rebates for those who donated to public schools for the purpose of tutorial, curriculum, books, technology, Saturday school, etc.:

• 25 percent tax rebate for donations to a “C” school;

• 50 percent tax rebate for donations to a “D” school;

• 75 percent tax rebate for donations to an “F” school.

“The only bill that sits on the governor’s desk which truly helps our public schools to receive much-needed resources will not see the light of day,” Jackson said. “This is truly a blow to public education.”

The veto obviously discourages donations to public schools in favor of their non-public counterparts and comes on top of requirements that local school superintendents now must answer directly to Baton Rouge instead of their local school boards that hired them. It also is the equivalent to piling on in that local school funds under the state’s Minimum Foundation Program, a formula used to provide state funding to local school systems, can be diverted to benefit students transferring to charter schools—even if the charter schools are in another parish.

So, not only does Jindal’s American Legislative Exchange Council (ALEC)-inspired educational reform legislation dilute local financial support of public schools, any attempt by individuals or corporations to assist struggling public schools is now officially discouraged by this administration.

One reader wrote of HB 1106: “If anyone ever questioned that Gov. Jindal is placing non-public schools over public schools, and treating them inequitably, his punitive legislation during the session, followed by this veto, is the final straw.

“According to Jindal, rebates to non-public schools are o.k. as passed by the legislature but rebates to public schools are vetoed ‘because there’s no provision in state budget for rebates.’”

Apparently, however, when it comes to non-public schools, there is a provision in the state budget for rebates.

“Shame on our governor for such a petty, discriminatory, embarrassing action,” the reader wrote.

It remains to be seen if the legislature has the courage to override the vetoes of Jackson’s bills.

If history is any indication, it won’t happen. One need look no further back than 2011 when the legislature approved a renewal of the cigarette tax only to have Jindal veto it because he was opposed to “new” taxes. While it is still a mystery how he could consider a tax renewal as a “new” tax, the legislature cratered, folded like a cheap suit, in its attempt to override Piyush’s veto.

But I see your true colors
Shining through;
I see your true colors…

Senate Bill 577 by Sen. Karen Carter Peterson (D-New Orleans) would have established the Louisiana Equal Pay Task Force to study and make recommendations relating to equal pay for women in the public sector in Louisiana.

It, too, passed unanimously in the Senate with only six absences—Appel, Norby Chabert (R-Houma), Peacock, Jonathan Perry (R-Kaplan), Greg Tarver (D-Shreveport) and Walsworth.

SB 577 passed in the House by a 71-17 vote.

The 17 voting against the measure in the House, all Republicans, included Reps. Stuart Bishop (R-Lafayette), Richard Burford (R-Stonewall), Raymond Garofalo, Jr. (R-Chalmette), Geymann, Greene, Kenneth Havard (R-Jackson), Lowell Hazel (R-Pineville), Cameron Henry (R-Metairie), Hensgens, Anthony Ligi, Jr. (R-Metairie), Lopinto, Nick Lorusso (R-New Orleans), John Morris (R-Monroe), James Morris, Steve Pylant (R-Winnsboro), Alan Seabaugh (R-Shreveport), and Talbot.

Which begs the question of why any female voter could, in good conscience, ever support Piyush Jindal or any of the Misogynistic Seventeen for even the most menial public office.

But I see your true colors
Shining through;
I see your true colors…

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