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Archive for the ‘House, Senate’ Category

Former Sen. Butch Gautreaux: a voice in the wilderness speaks out against Jindal’s proposed OGB privatization

Posted in Governor's Office, House, Senate, Legislature, Legislators, tagged , on February 10, 2012| 10 Comments »

Editor’s note: Former State Sen. Butch Gautreaux addressed the Joint Legislative Committee on the Budget following the presentation of Gov. Bobby Jindal’s executive budget and the ensuing queston and answer session between legislators and members of the Division of Administration. Unfortunately, when the last legislator’s question was asked and answered, reporters exited the committee room, unaware that Gautreaux would testify against the controversial proposal to privatize the Office of Group Benefits, meaning his words got little play in the media.

Following is an exclusive reprint of his comments:

Although Governor Jindal has strived to bring transparency to the office of the Governor, the Office of Group Benefits (OGB) sale or its placement in the hands of a third party administrator is a case that denies the public, or for that matter even the legislature, the opportunity to see or understand what is being considered.

When news first came to light last year of an effort to capitalize on the large cash reserve, I called meetings of the Senate Retirement Committee to try to learn the rationale of the sale. I invited all parties including the governor, the commissioner of administration and others involved. Mr. Rainwater did attend the first two meetings but little was learned. When repeatedly asked by panel members why the sale was being considered, Mr. Rainwater was pat on his answer, never swaying from his statement: “the State should not be in the insurance business.”

Remember, the state set up a workers’ compensation company, LWCC in the early nineties that still exists today and seems to function well. The state set up Citizens in response to coastal residents not being able to acquire homeowners insurance. It’s had its problems but is still doing the job. Does Mr. Rainwater advocate getting rid of those two insurance companies?

We just learned last week that the Governor contracted with Morgan-Keegan to do an analysis on the feasibility of selling out or placing in the hands of a third party administrator the PPO for the Office of Group Benefits. As a member of the board of OGB I have not had an opportunity to see the final Morgan-Keegan document or anything else. I can only tell you a little history of a health insurance system that is the envy of the other 49 states. Louisiana has the only self-administered and self-funded health insurance for state workers and retirees. The plan provides competitive rates to members and to the state. Remember, the taxpayers pick up most of the cost. And unlike some other departments OGB has for the last seven years grown in becoming a model of what other states should emulate.

Mr. Rainwater likes to state that we have twice the number of employees in our health insurance department. Of course we do. We are the only state to administer its plan, and at a cost that is a lot cheaper than it can contract for.

Eight years ago OGB was in trouble for an assortment of reasons and something had to be done if the system was to survive. Governor Kathleen Blanco hired Tommy Teague to take over as the director and through his excellent management practices and leadership we saw a system that was wrought with problems and inefficiencies go from a $33 Million deficit to a $550 Million cash reserve. Let me say that I served on the board of directors during this transition from something very troubling to what has become a shining star. And then when Tommy resisted taking actions that would undermine the system, Governor Jindal summarily fired him.

We now have a premier public health insurance department for state workers that offers affordable premiums and industry-acceptable reimbursements to health care providers. This took a lot of talent. Mr. Teague negotiated with providers who previously were not interested in doing business with OGB. He promised them big changes in service and negotiated better discounts from them at the same time.

While at its worst, most hospitals and doctors did not want to accept the plan. But, at the last board meeting back in September it was reported that every hospital in Louisiana except one now accepts the plan as do most doctors and other providers.

Better discounts and other efficiencies of scale were building increased cash balances. At the final meeting of the last fiscal year the board had a motion on the table to reduce premiums which would have helped with the cost to the state during this fiscal crisis. That motion was met with a substitute motion to maintain rates until we knew how things would shake out with efforts by the administration to take the fund balance to fill a gaping hole in the state budget. The OGB monies are constitutionally protected from being raided as so many other department budgets were being raided at the time.

In the face of the board action, Governor Jindal announced a 5.6% increase in premiums effective July 1st of last year. This action was not only unnecessary but put an additional strain on the already stressed state general fund as the state pays on average 75 percent of the premium cost.

At the same time, it was announced that deductibles would hold over until January 1, 2012, with the effect of drawing down the balance of the cash reserves, placating the complaints of members who could ill-afford more deductions coming from their diminishing pay checks. But this was all part of the governor’s overall plan.

Again for January 1, 2012, the Governor announced and implemented another premium increase of 5.5 percent. Remember, we were in a position to reduce premiums when the plan to raid OGB was put together.

Speaking of transparency, it was indeed very clear what the plan was. By implementing the unnecessary increases in premiums, further increases would be less of a shock to the members and you who must somehow balance the state budget. Experts are telling us that the private insurance company will have to ease in another increase of roughly 10 percent to meet the needs of executive compensation, marketing, stockholder dividends, profit, taxes and other expenses we don’t currently have at the not-for-profit OGB.

Our own actuary gave a figure of $97 million in additional costs to the taxpayer for the July 1 premium increase, coupled with the member deductible holiday through the calendar year. Since that time, there has been another unnecessary premium increase to the taxpayer and the members.

This privatization will be very costly to the taxpayers of Louisiana, but then we get to fire 177 rank-and-file state workers to counter the hiring of former chief of staff Teepell’s family members and all of the politically-connected, deposed elected officials over the last four weeks, most at six figure salaries.

You only need to follow the dollars to understand why the Governor wants this to happen. Thank you for your attention.

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Guest columnist Judith Howard offers another perspective on the American Legislative Exchange Council (ALEC)

Posted in ALEC, American Legislative Exchange Council, Governor's Office, House, Senate, Legislature, Legislators on February 9, 2012| 2 Comments »

Editor’s note: We occasionally like to showcase the writing skills of guest columnists. Judith Howard is a regular columnist for the Morning Paper of Ruston. She has written a thought-provoking piece on the American Legislative Exchange Council (ALEC) and we are proud to have her essay grace our blog.

By Judith Howard

A year ago when newly elected governors in Wisconsin (Scott Walker), Ohio (John Kasich), Florida (Rick Scott), and Michigan (Rick Synder) simultaneously began their war on workers by trying to destroy collective bargaining, I thought this must have been a plan hatched at some national Republican meeting after the 2010 elections.

I thought the same thing about these Republican governors, including our own, when they started pushing the privatization of education and prisons. With a $500 million surplus, the Louisiana state office that administers health insurance is a gem Jindal can’t wait to sell, even though it will result in higher premiums for state retirees and workers.

I was half right and half wrong about the origin of these parallel Republican initiatives. The sponsor was the American Legislative Exchange Council (ALEC). This organization describes itself thusly: “With more than 2,000 members, ALEC is the nation’s largest, non-partisan, individual public-private membership association of state legislators.”

So I was right in that it was a coordinated attack, but I was wrong that it must the Republican National Committee pushing this stuff. ALEC is, however, overwhelmingly Republican.

ALEC says it is interested in the conservative principles of free markets (translated—unregulated markets), limited government (translated–except in private affairs like family planning and how you die), and federalism (translated–state governments are cheaper to buy and control. You know, divide and conquer). It touts its benefit to private members this way:

“One of ALEC’s greatest strengths is the public-private partnership. ALEC provides the private sector with an unparalleled opportunity to have its voice heard, and its perspective appreciated, by the legislative members.” (Emphasis mine.)

Appreciated, indeed. ALEC develops model legislation that its legislative members take to their respective states. This way, it gives the public the impression that these ideas have widespread support across the country, and that said support just popped up independently.

Dues for corporations are $7,000, $12,000 or $25,000 depending on the membership level. The Koch Brothers, David and Charles, long-time drivers of ALEC are members at the $25,000 level. For the return they get on that minimal investment through legislation written by ALEC, you gotta figure these are pretty cheap dues.

Koch Industries, the second largest privately held business in the U.S., reports annual revenues of 100 billion dollars. For David and Charles, $25,000 is pocket change.

Dues for state legislators are just $100 for a two-year membership. There is no list of legislative members on the ALEC website, but the organization boasts that 1/3 of all legislators are members.

If legislators pay dues from their campaign funds rather than out of their pocket, it’s possible to find out which legislators are ALEC members.

Hollis Downs, for example, was a member of ALEC.

Each year ALEC legislative members in their respective states introduce about 1000 pieces of legislation, and estimates about 20% gets passed into law. Do you think legislators advertise that these legislative proposals were written by ALEC?

Of course not. It’s as if this legislation originated in their own minds as they contemplated what would be in the interests of the public they purport to serve. Who writes our legislation and who benefits from it should be public knowledge, especially when those two happen to be one and the same. As it stands now, ALEC is able to keep its fingerprints off laws that roll back environmental protection in order to increase energy company profits, roll back union rights for the same reason, and roll back voting rights in order to get more corporate-sponsored Republicans elected.

I should say are USUALLY able to keep their fingerprints off legislation. In November, Florida Rep. Rachel Burgin introduced a bill to reduce corporate taxes. She made the embarrassing mistake of using the model bill written by ALEC’s Tax and Fiscal Policy Task Force rather than changing the wording a little.

Rep. Burgin forgot to delete the following from the bill: “WHEREAS, it is the mission of the American Legislative Exchange Council to advance Jeffersonian principles of free markets, limited government, federalism, and individual liberty.” Oops.

So when you hear the constant drumbeat of privatizing public services like education and prisons, demolishing EPA regulations, initiating voter ID laws, destroying collective bargaining, remember where these ideas originated–ALEC. The reasons given for the need to do these things are not the real reason behind the push to do them.

To take just the first of these issues–why, you ask, is the Koch brothers-backed effort to privatize education such a priority? Well, I’m glad you asked. That effort has an interesting history.

Charles and David Koch’s father’s name was Fred. Ol’ Fred ranted and raved that public school books were filled with communist propaganda. His paranoia about communist infiltration extended to President Eisenhower, the Supreme Court, and the national teacher’s union. That man hated him some unions!

I suspect the Koch paranoia about public education and union hatred stems from Daddy Fred’s deranged mind. Plus, there is money to be made by privatizing schools, so what’s not to like? Of course the home schooling movement also fears that teachers might indoctrinate their kids with science, so there’s that too.

When David Koch ran for VP on the Libertarian Ticket in 1980, he pushed the idea of tax credits to encourage alternatives to public education. Over 30 years later, he’s still pushing for taxpayers to pay for private schools.

So what is the strategic goal in the legislation ALEC advocates for and that Republican governors push? Think about it.

They want to control what’s taught in schools (the Kochs now fund university departments IF they get to approve the professors and the content of the courses). They want to teach the scripture of unfettered capitalism, where unions are socialist Satans instead of being a countervailing force to corporate power.

It’s important to break up unions since they fund primarily Democratic candidates while corporations fund primarily Republican candidates. Disregard any noise about the need to break up public unions because of budgetary problems. That’s merely a convenient ruse.

As long as plutocrats can pit poor whites against blacks, blacks against Latinos, and private workers against public workers, that animosity keeps our attention off the real problem–corporate ownership of government.

The EPA is a favorite whipping boy for ALEC, and they are going berserk over the new consumer protection bureau. Heaven forbid that anybody in government look out for the interests of the little guy.

Until the sudden rush to crush unions by new Republican governors last January, I had never heard of ALEC. My colleague, Tom Aswell, wrote a column about ALEC sometime last year, but my guess is most Americans haven’t heard of the organization either.

Yet for 40 years about 300 of the largest corporations like Koch Industries, Exxon, Centerpoint, Verizon, AT&T, Bank of America, State Farm, Blue Cross, Pfizer, and Walmart have used ALEC to push legislation written by themselves to benefit themselves, but put forth by legislators. Local company Hunt-Guillot is also a member.

I envision ALEC as something like a computer virus, stealthily infecting our political system without our knowledge. We notice things slowing down as it spreads behind the scenes until, like a computer, our politics cease to function.

As if there weren’t already enough corporate influence in government, the Supreme Court two years ago allowed unlimited money into the political system with their Citizens United decision. Super Pacs will probably spend more money than political parties in this year’s election.

As someone once said, “Legislators ought to wear logos like NASCAR drivers so everyone would know who sponsors them.”

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Jindal dangles $100 million carrot in front of university presidents in effort to gain support for retirement package

Posted in Budget, Governor's Office, Higher Education, House, Senate, Legislature, Legislators on February 8, 2012| 5 Comments »

Is Gov. Bobby Jindal now trying to pit university and college presidents/faculty against state workers?

That certainly seemed to be the case on Wednesday when he dangled a $100 million carrot in front of state college system presidents (and certain legislators) in the form of a promise that state colleges would share an extra $100 million on the condition that lawmakers pass his radical state retirement system package during the upcoming legislative session.

The tactic represents a new low for the governor as he attempts to play on the fears of colleges and university presidents that their institutions would take large hits as the result of yet another anticipated budgetary shortfall of $900 million in what is becoming a somewhat tiring annual soap opera.

Jindal Chief of Staff Stephen Waguespack said the governor’s executive budget unveiled to lawmakers on Thursday would keep higher education funding at its present level in the 2012-13 fiscal year beginning July 1.

In a brazen attempt at outright bribery, Waguespack told the higher education officials that if the legislature approves Jindal’s proposal to overhaul the retirement system for thousands of state employees, the $100 million saved through cheaper retirement costs at universities would stay with the campuses and would not be used to stop cuts elsewhere in state government.

To that, we would add these words of caution to the university presidents: be careful, it’s a political promise and political promises have a habit of evaporating like yesterday’s cheap aftershave.

Jindal’s suggestion is calculated to build support for his proposed retirement changes among legislators with colleges in their districts. Those changes would, if approved, increase rank-and-file state employee contributions by 3 percent, shrink benefits and push back the age for collecting retirement payments. New state employees would be shifted from defined benefits to defined contributions similar to cheaper 401(k) type accounts.

Such an obvious ploy should be beneath a governor who purports to eschew politics as usual. And make no mistake, this is politics as usual: pure extortion of targeted legislators through anxious college presidents to garner votes necessary to pass a controversial legislative package.

It’s enough to make one sit back and ask, “What’s next?”

What tactic will the most ethical, most transparent, most accountable governor employ next to get his way in his efforts to push through an agenda aimed at destroying public education, slashing state employee retirement and health care benefits, privatizing state agencies and services and shoving thousands of dedicated state employees onto the unemployment rolls.

There may not be a lot of public sympathy out there for state employees, but these people are our neighbors, our relatives, our children’s teachers, and others who provide services across the civilian spectrum on a daily basis.

You may not care for the plight of state workers but they touch our lives each and every day, whether you know it or not.

Rest assured, Jindal has a much larger agenda than what is best for the State of Louisiana. His every move, every action, is carefully calculated to benefit businessmen and corporations who have a vested interest in privatization, who see profit in school vouchers and charter schools, who stand to gain financially by a relaxation of regulations special tax breaks, and who have invested in this governor’s political career.

It’s no accident that he has steadfastly, in the face of one fiscal crisis after another, year after year, refused to consider any increase in corporate taxes.

Jindal hopes those corporations have bigger plans for him.

And there’s your real carrot.

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Cockroaches and politicians: you can’t get rid of either one; an up close examination of some recent political patronage

Posted in Governor's Office, House, Senate, Legislature, Legislators, Politicians, Transparency on February 8, 2012| 6 Comments »

The obvious similarity between a cockroach and a career politician is that you can never get rid of either one.

Take Noble Ellington, for example.

Or Jane Smith.

Or Ricky Hardy.

Or Henry “Tank” Powell.

Or M.J. “Mert” Smiley.

Or what seems like the entire Teepell family or anyone connected to Timmy Teepell.

If the supporters of Piyush Jindal don’t realize that he is every bit the political opportunist that any of his predecessors were, that his political morals are no better than any other Louisiana politician who ever got himself elected, then there is little to no hope for this state.

We’ll get back to the governor’s appointees but first let’s take a look at the $150,000 man with no qualifications and no experience.

Commissioner of Insurance Jim Donelon on Tuesday announced that Ellington, who spent 24 years in the state legislature, flip-flopping from state senator to state representative as term limits dictated, joined the department as its number-two man last week at a salary of $150,000 per year.

Ellington served on the Louisiana House Insurance Committee for the past four years, “but that is the extent of his insurance involvement to my knowledge,” said Donelon.

Let that soak in: “That is the extent of his insurance involvement.”

Let this soak in as well: $150,000 per year to serve as the second in command of the state’s sprawling Insurance Department.

For the thousands of state civil service who may find themselves having to work longer to qualify for retirement and who may have to take a five-year average earnings as the formula on which to base retirement income if Jindal’s retirement legislation package passes, let this soak in, too:

You can take comfort in the knowledge that Ellington will draw a much fatter state retirement now that he’s drawing $150 thou per year as opposed to his 24-year legislative salary because $150,000 as a base for the next four years will pretty much set him up for life.

It’s no coincidence that Ellington landed on his feet this way after opting not to seek re-election last fall. He is the national immediate past president of the American Legislative Exchange Council (ALEC) and he hosted ALEC’s national convention in New Orleans last August.

ALEC, you might remember, is the national organization funded largely by the Koch brothers as well as a host of national corporation that boasts of its membership about a third of state legislators from all 50 states that sets the agenda for state legislation from prison privatization to charter schools to suspension of state employee pay raises to privatization of state employee health insurance, group benefits, risk management, Medicaid, the abolishment of state civil service and/or state employee unions and anything else that can cost state employees their jobs.

Cockroaches.

Finally, you can let these pearls of wisdom from Donelon regarding Ellington’s hiring soak in: “I’m very pleased that Noble made himself available for more public service.”

Wait. What? What self-serving politician has ever not made himself available for more public service, especially at $150,000 per year?

Donelon went on to say, “He brings a wealth of experience from his service in the legislature. I especially appreciate his expertise in issues affecting rural parts of the state.”

Really?

Okay, first of all, Donelon admitted that Ellington had little to no experience in the insurance field other than having served on the House Insurance Committee and then he turns right around to say he brings “a wealth of experience” to the table. What a crock. And exactly what expertise in issues affecting rural areas is applicable to the State Insurance Department?

Well, to be fair to Donelon’s possible motive, on Oct. 11, 2011, Ellington contributed $1,000 to Donelon’s re-election campaign.

Not that Donelon is alone is doling out political patronage.

Let’s take a look at some of the recent appointments by Piyush, the man who would counsel us to “do more with less.”

• Former State Rep. Jane Smith of Bossier City, ineligible for re-election because of term-limits and defeated in her own effort to flip-flop to the Senate, nevertheless landed a $107,500 per year position as deputy secretary of the Department of Revenue. Her qualifications for such a sensitive position were never enumerated.

• Former Reps. Ricky Hardy of Lafayette, who lost his re-election bid last fall, Henry “Tank” Powell of Ponchatoula, and M.J. “Mert” Smiley of St. Amant, were all appointed to part time positions as members of the State Pardon Board at $36,000 each.

It was Smiley who last spring, during the hearing on a $6.8 million amendment to the $68 million contract with F.A. Richard & Associates, the company that took over the privatization of the Office of Risk Management (ORM), who uttered one of the most bizarre questions to come out of any legislative hearing.

Hearing of the problem of ORM’s retaining employees who were leaving the agency for other jobs in anticipation of the phased-in privatization of the agency, Smiley asked ORM Assistant Director Patti Gonzales, “Isn’t there some way you can force them to stay?”

No, Mr. Smiley, not since the Emancipation Proclamation of 1863.

Smiley, by the way, will serve for only a year. It seems that after leaving the legislature, he ran for Ascension Parish tax assessor and somehow got himself elected but won’t take office until January of 2013. In the meantime, he needed a job and of course his impeccable qualifications made him the natural choice. For one year.

Cockroaches.

Other recent Jindal appointees:

• Former St. Tammany Parish President Kevin Davis, term-limited, bless his heart, was named director of the Governor’s Office on Homeland Security and Emergency Preparedness (GOHSEP), a political patronage black hole;

• Former St. Bernard Parish President Craig Taffaro, who lost his re-election bid, had no need to worry because Jindal simply created a new position. He was appointed to lead the state’s hazard mitigation efforts in which capacity he will oversee programs that distribute money for elevating homes and making other improvements to residences and public infrastructure;

• Matt Parker, brother-in-law of Jindal’s former chief of staff and present political adviser Timmy Teepell, was hired as Jindal’s intergovernmental affairs director;

• Taylor Teepell, Timmy Teepell’s brother, was named as Jindal’s deputy legislative affairs director. Before that, he was director of the state Republican Party’s Victory Fund;

• Melissa Henderson Mann, Timmy Teepell’s former executive assistant, was named as the new legislative liaison for the Department of Transportation and Development.

Frank Collins, Jindal’s spokesman (paid in the capacity of some suitable title, we’re certain), assured all that the hiring and appointment decisions were made strictly on the basis of merit. Each and every one, he said, had the qualifications and experience needed for their new positions.

To borrow a phrase from an old friend, please Mr. Collins. Don’t urinate on our heads and try to tell us it’s raining.

Cockroaches.

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OGB sale proposal included in Executive Budget to be presented to joint legislative committee next Thursday

Posted in ALEC, American Legislative Exchange Council, Budget, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Politicians, Transparency on February 3, 2012| 8 Comments »

Don’t say we didn’t warn you.

As recently as Jan. 31—less than a week ago—we told you that Gov. Bobby Jindal is following the playbook of the American Legislative Exchange Council (ALEC) almost to the letter.

That playbook includes a section entitled “Tools to Control Costs and Improve Government Efficiency.” Among the “tools” it recommended were:

• Adopt a state hiring freeze;

• Reform state pensions;

• Delay automatic pay increases (we wondered where legislators came up with the term “automatic” in freezing merit increases a couple of years back);

• Embrace the expanded use of privatization and competitive contracting.

Each of these has already been done or is in the process of being done.

Next Thursday, the administration will present the governor’s Executive Budget for Fiscal Year 2012-2013. Included in the budget will be the proposed sale of the Office of Group Benefits (OGB) for $189 million, to become effective Jan. 1, 2013.

The committee meeting is scheduled to be held at 9:30 a.m. in House Committee Room 5.

The $189 million apparently is the price tag derived by Morgan Keegan, the Memphis banking firm that stands to reap a $750,000 bonus over and above the $150,000 for assessing OGB’s value if it is successful in negotiating the OGB sale at the $189 million price.

Morgan Keegan was itself only recently sold after being fined $210 million nearly two years ago by the Securities and Exchange Commission for misrepresenting critical information to investors.

Whoever ultimately purchases OGB will take with them the $500 million surplus now carried on the OGB books which the new operators will use to pay claims.

LouisianaVoice has also learned that once the sale of OGB is successfully negotiated and the agency is taken over by private industry, premiums will rise by approximately 10 percent.

There are other proposed changes coming that we can tell you about next week.

We can tell you this much, though: It ain’t gonna be pretty.

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