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Archive for the ‘Legislature, Legislators’ Category

Education MFP funding is elaborate legislative shell game

Posted in BESE, Education, House, Senate, Layoffs, Legislature, Legislators, Politicians, Revenue, Taxes, Transparency on March 8, 2011| 1 Comment »

Public school teachers at the bottom of the seniority ladder are being called in by their principals in parish school systems across the state to hear the bad news: because of budgetary cutbacks, their contracts will not be renewed next school year.

It’s bad enough when State Superintendent of Education Paul Pastorek insists that poor grades are the fault of the teachers and schools, not poverty or the lack of public support of education. The mindset in Pastorek’s office is not more funding, but more charter schools.

Teacher layoffs are something that should never happen in any society that pretends to make education a priority. But it is happening right now so perhaps we should take a quick refresher course in Louisiana history or civics or what some might prefer to call the Big Lie.

Think back for a moment to a campaign that took place 21 years ago. It was 1990 and Louisianans were being told that legalized gaming (that’s gaming, not gambling; gaming was the nice way to say gambling which, of course, was illegal and carried bad connotations) was the panacea for all the state’s fiscal problems.

We once thought the same thing about oil and gas but that myth was exploded in the eighties when the oil patches dried up with six-dollar-a-barrel oil (remember those days?). So legislators began looking around for other sources of revenue. Never mind computer technology, Fortune 500 businesses, or some other livelihoods with an emphasis on education and some modicum of intelligence. No, it had to be something that could be fed to the masses, something that would be in keeping with Louisiana’s third-world, banana republic image.

Presto! The idea of legalized gambling, er, gaming was born and the politicians nurtured the concept and they were oh, so slick in the way they did it. Casino gambling was too much to throw at their constituents from the get-go, so first came the Louisiana Lottery, approved in 1990 with the first scratch-off games going on sale in 1991. Skeptics immediately dubbed the Lottery as a tax for those who were not good at math.

The legislature passed riverboat gambling in 1991 once the Lottery was up and running and the following year approved a bill to allow New Orleans to build a land-based casino.

And just how did lawmakers sell the hard-nosed Baptists of north Louisiana on gambling? Why, education, of course. In December of 1986, The Louisiana Association of Educators agreed to support and work for the lottery, provided at least 75 percent of the proceeds are dedicated to education, a stipulation to which Gov. Edwin Edwards quickly agreed. That number now hovers somewhere around 35 percent, less than half of what was originally sought.

Politicians from the governor all the way down to local school board members were busy touting the financial windfall for education that was sure to come from gaming revenue. After all, hadn’t the Support Education in Louisiana First Fund been a good thing for state education?

The Support Education in Louisiana First Fund had its origins in September 1986 with a proposed amendment that would dedicate about $540 million from oil and gas leasing production in the outer continental shelf lands in the Gulf of Mexico. Known as the 8(g) fund, it has pumped more than $500 million into the state’s general fund for education since 1986. Or has it? In 2010, the Louisiana Legislature allocated $109.1 million in 8(g) funds to the Minimum Foundation Program (MFP) to fund public education in Louisiana. Or did it?

Since its inception, the Louisiana Lottery has transferred almost $2.3 billion to the state treasury but it wasn’t until 2003 that the legislature got around to passing a bill calling for a constitutional amendment dedicating lottery proceeds to the MFP. That law became effective on July 1, 2004. Last year, the legislature allocated $137.4 million in State Lottery proceeds to the MFP. Or did it?

And then there’s the $10 billion Education Jobs Fund passed by Congress last year. Also known as EduJobs, Louisiana’s share was $147 million and was supposed to be added to the MFP. But was it? Remember, this is Louisiana.

Even as many of the state’s local school boards had already factored their share of that $147 million into their budgets, Gov. Bobby Jindal on Nov. 11 announced plans to redirect the money. Just that quickly, at the whim of a “reform” politician, it was gone.

It turns out that the Support Education in Louisiana First Fund, the State Lottery proceeds allocated to education in Louisiana, and the EduJobs fund are nothing but part of an elaborate shell game and skullduggery, the political equivalent of a stage magician’s misdirection tactic. Smoke and mirrors.

Instead of allocating the full $3.3 billion to the MFP from the state’s General Fund as it had before the existence of 8(g), the State Lottery, or EduJobs funds and then adding those allocations to produce the education windfall Louisiana voters had expected, they were first subtracted from the General Fund. Only then were the combined $393.5 million in 8(g) funds, State Lottery proceeds, and EduJobs funding added back to the legislative appropriation which by that time, had shrunk to less than $3.1 billion.

The net gain to education from 8(g), EduJobs, and the lottery?

Zero. It was all a big con. Mission accomplished. Politicians 3, Louisiana 0.

So now, after the 2010 legislature gave top priority to pet projects, appropriating more than $500 million on non-governmental organizations (NGOs) such as councils on aging, golf courses, tennis courts, and community centers, and projects that should have been financed by local governments, the state has run out of money and teachers are being laid off.

And instead of budget cuts, Superintendent of Education Paul Pastorek sees the problem as bad teachers and failing schools. The more things change, the more they stay the same.

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Administration takes first steps to privatize another agency (and maybe pick up a spare $500 million in the process)

Posted in Budget, Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, ORM, Office of Risk Management, Privatization, RFP, Request for Proposals, Transparency on March 3, 2011| 4 Comments »

Gov. Bobby Jindal’s Privatization Express keeps rolling along. This time he has set his sights on one of the most financially stable state agencies, the Office of Group Benefits (OGB).

One has to wonder however, if his motivation is really in a more efficient, more streamlined state government or does he perhaps have an eye on OGB’s $552 million surplus as a means of making himself look like a financial genius by using the money to plug one-third of the looming $1.6 billion deficit.

A couple of coups like that, coupled with the recent dramatic upturn in the price of a barrel of oil, which always enriches the State Treasury, and Jindal the Boy Wonder would take on the aura of financial wizard and (he hopes) give his presidential aspirations a needed boost with the national media other than Fox, Rush Limbaugh, and the Washington Times, who already adore him to the point of nausea.

The deadline to respond to a Request for Proposals (RFP) for the services of “a qualified financial adviser” preparatory to the private takeover of OGB is Monday with finalist interviews scheduled to take place a week later, on March 14, according to DOA’s Feb. 4 RFP.

The financial adviser to be selected will be charged with assessing the market value of the tangible and/or intangible assets of OBG and to negotiate for and on behalf of OGB to help the agency “explore alternative methods of providing health coverage through contracts” with a private administrator, the RFP said.

In March of 2010, it was announced that the Office of Risk Management would be taken over in phases by F.A. Richard and Associates (FARA) of Mandeville at a cost to the state of $68 million. The Worker’s Compensation section was transferred to FARA last July and the last sections are scheduled for transfer by July of 2013.

Proposals were received for the privatization of the state’s Buildings and Grounds Department but each of those proposals were ultimately rejected.

There appears to be more opposition to the privatization of OGB because of its financial stability and its low (4 percent) administrative costs. State Sen. Butch Gautreaux (D-Morgan City) has gone on record as opposing the privatization of OGB.

“I am very concerned about the governor’s efforts to sell off OGB,” Gautreaux said. “I sit on the (OGB) board and attend the meetings. We’ve developed a reserve of over $500 million and again the governor is looking at raiding those funds for short term and recurring expenses. This will be a catastrophic move,” he said.

OGB presently maintains a self-insured and self-administered health and accident benefit plan (PPO plan) with its own network of contracted providers. OGB also has a contract with Blue Cross/Blue Shield of Louisiana to administer a self-insured HMO plan and United HealthCare administers a self-insured consumer-directed (high deductible) health plan with a health savings account. Vantage Health Plan is also contracted with OGB for a pilot program to provide a fully-insured medical home HMO plan in the northeast region of the state, the RFP says.

In addition, the LSU System, through an interagency agreement with OGB, administers a separate consumer-directed health plan with a health reimbursement account available to employees and retirees of LSU and the Louisiana Legislature.

The RFP also stipulates that the financial adviser provide recommendations to OGB for contracting in light of the assessment and negotiations and will also assist in the drafting and final execution of any contract resulting from the assessment and negotiations. The financial adviser who is ultimately chosen will also be called upon to provide testimony before any committee of the legislature conducting hearings on the proposed privatization.

Those submitting proposals will be required to have a minimum of 10 years experience in the valuation and sale of entities in the health insurance market with enterprise values exceeding $150 million, the RFP said.

OGB ended Fiscal Year 2009-2010 with total assets of $552 million, including $529.5 million in cash and $22.5 million in premium receivables, according to the RFP. Such a financial windfall would be tantamount to a Jindal slush fund.

If OGB is ultimately privatized, the state would enter into a contract with an administrator much as it did with FARA for the ORM privatization. The state would pay the amount stipulated in the winning proposal and in return the administration would have access to the $552 million surplus, ostensibly to help plug an anticipated $1.6 billion budget deficit.

Like the proposals for privatization, when that RFP is issued, the proposals by financial advisers submitting proposals would be graded on a point basis. In the case of the financial advisers, a 1,000-point system will be employed with service approach and coordination strategy having a potential maximum of 350 points. The highest possible score for qualifications and experience of the proposer will be 300. The qualifications and experience of assigned staff carries a maximum possible score of 200 and cost of services 150 points.

No timetable has been set for the issuance of an RFP for the actual privatization of OGB.

The agency has more than 450 employees who could be affected by the privatization through the loss or interruption of retirement and their own health benefits.

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Jindal administration in lock-step with national GOP privatization addiction

Posted in Boards, Campaign Contributions, Commissions, Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, ORM, Office of Risk Management, Prison, Privatization, RFP, Request for Proposals, Taxes, Transparency on March 1, 2011| 3 Comments »

Could it be mere coincidence that the word privatize sounds a lot like privateer?

Remember the clamor to privatize Social Security? Advocates wanted Americans to be allowed to control their own retirement money by investing it in the stock market. To many, it seemed like a good idea at the time.

Fortunately, calmer heads prevailed and all the privatization rhetoric quieted, its disappearance pretty much coinciding with the collapse of several Wall Street investment banking firms and the subsequent trillion-dollar congressional bailout. Millions of Americans saw their 401k funds evaporate. Suddenly, social security privatization didn’t seem like such a hot idea.

Despite that, Gov. Bobby Jindal espouses what he considers a panacea to the state’s fiscal woes: privatization. Even if state property must be sold and the fate of thousands of state workers, along with their retirement and health benefits, are thrown into jeopardy, privatize. In that regard, he is in lock-step with Republican governors all over the U.S.

The answer to every fiscal ill that beleaguers the state is privatization, according to Jindal. Sometimes privatization can even extend into the already private sector, especially if state help for private enterprise through Jindal’s economic development air program happens to benefit campaign contributors.

LaShip, owned by Gary Chouest, was the direct beneficiary of Jindal’s $10 million investment in state funds for expansions to the Port of Terrebonne in 2008. Chouest, his businesses, which also include Chouest Offshore and C-Logistics, and his family members made a minimum of 18 campaign contributions to Jindal totaling $85,000. The funds came from a $1.1 billion state surplus. Ironic, given that the state today is faced with a $1.6 billion deficit.

Then, of course, there is the infamous chicken plant in Union Parish.

When Pilgrim’s Pride decided to close its plant in Farmerville, Jindal scurried to find a buyer for Pilgrim founder Lonnie “Bo” Pilgrim. California-based Foster Farms eventually purchased the plant after the state put up $50 million. Lonnie Pilgrim and Foster Farms both contributed generously to Jindal’s campaign.

Anyone who has followed Jindal should not be surprised. More than 200 key Jindal appointees combined to contribute more than $784,000 to his campaign.

Coincidence, says Jindal Press Secretary Kyle Plotkin who added that those contributors supported Jindal’s plans for reforming Louisiana and for improving the state’s image.

Nor does Jindal consider his repeal of the Stelly Plan in 2008 to be detrimental to the state’s financial well-being even though experts said the action would create a $350 million revenue loss in the first year, 2009. The Stelly Plan was approved by a majority of Louisiana voters but Jindal repealed it, saying his action would save single income tax filers as much as $500 a year and joint filers $1,000. That sounded great until one peeled back the layers and found that the $500 savings would be realized only by single filers making as much as $90,000 a year and to save $1,000, joint filers would have to make more than $150,000 per year.

Louisiana’s median household income was $43,635 in 2010.

It was little more than a year ago, in January 2010, that then-Commissioner of Administration Angelé Davis released the highlights of the administration’s “streamlining measures implementation plan.” Among those highlights were a 10 percent reduction in the numbers of cars in the state’s automobile fleet, sale of unneeded state property, better contractor oversight, and the establishment of a “Privatization and Outsourcing Unit” within the Division of Administration (DOA) “to serve as a resource for all departments and agencies for identifying and implementing appropriate privatization and outsourcing initiatives.”

To that end, the report said a Request for Proposals (RFP) had already been issued by the Office of Risk Management (ORM) “to evaluate the potential cost savings and/or service improvements with outsourcing the claims management and loss prevention services for all lines of coverage to a private company.”

The privatization of ORM was, in fact, accomplished when Mandeville-based F.A. Richard and Associates (FARA) was awarded the contract to take over operations of the agency, beginning with its Workers Compensation unit. The phased-in takeover is scheduled to be complete in 2013 at a cost of $68 million under terms of FARA’s contract with the state.

Proposals were taken on the privatization of at least one other agency but none of the proposals were attractive enough to gain administration approval.

No matter. Even without waiting to see if the privatization of ORM proves to be a wise move, Jindal is plunging ahead in his efforts to privatize other agencies, including state prison facilities, the Office of Group Benefits (OGB), and, if you watch what’s been going on with charter schools, public education.

As was the case of ORM, the privatization of any state agency would require the concurrence of the State Legislature. With recent party switches by several legislatures, Jindal now enjoys a Republican majority in both the House and Senate.

Privatization has already been tried once with less than satisfactory results.

OGB, beginning on July 1, 2003 offered state employees the option of selecting a Managed Care Option (MCO) administered by FARA, the same firm that is in the process of taking over ORM. A state audit later revealed that FARA was paid $8.6 million more than its $20 million limit, a 43 percent cost overrun.

OGB has since terminated its contract with FARA.

State Sen. Butch Gautreaux (D-Morgan City) has gone on record as opposing the privatization of OGB.

“I am very concerned about the governor’s efforts to sell off OGB,” Gautreaux said in an email. “I sit on the (OGB) board and attend the meetings. We’ve developed a reserve of over $500 million and again the governor is looking at raiding those funds for short term and recurring expenses. This will be a catastrophic move,” he said.

The privatization of state prisons also is also a matter of concern.

DOA recently published a request for information on the privatization of state correctional facilities in Allen and Winn parishes. Both facilities, while state-owned, are presently managed by private firms from Nashville, TN., and Boca Raton, FL.

Figures obtained from DOA show that it presently costs the state about $17.5 million per year to pay the two firms to operate the facilities in Allen and Winn. Avoyelles Correctional Center, which was built from the same architectural plans as those in Winn and Allen and which is state-operated, presently costs about $26 million per year.

The obvious questions then become how can a private company in business to make a profit do so without charging a higher per diem and how can the private companies operate Winn and Allen at one-third less cost than the state spends to run Avoyelles?

Simply put, the private firms pay their employees much less than the state pays its corrections officers. That alone is a major cause for concern among employees of facilities run by the state that might be privatized sometime down the road.

Private firms also offer less in the way of rehabilitation and educational programs. Basically, they operate on the concept of lock and feed. Moreover, because the prisoners will still be the state’s responsibility, the state would continue to bear the cost of prisoners’ medical care. Tough-on-crime types might question the need of rehabilitation and educational programs, being of the “lock-‘em-up-and-throw-away-the-key mindset but medical care can’t be denied.

That might be good for the hard-liners but that philosophy wouldn’t seem to do much to discourage repeat offenders and that flies in the face of Jindal’s highly-touted press release a couple of weeks ago when he boasted that the state’s recidivism rate for first- and second-year prisoners dropped by 33 percent under his administration. It’s the moral equivalent of Jindal’s having his cake and eating it, too.
Privatization necessarily goes against the grain of his stated objective of assimilating prisoners back into society through education and occupational training. He can’t privatize and expect lower recidivism rates, too.

Projecting the current rate of $31.51 per-day per-prisoner now paid parish sheriffs to house state prisoners over the 20-year contract sought by the Department of Public Safety and Corrections, the state would pay a private firm upwards of $700 million. Jindal appears ready to trade that obligation for $66 million in up-front cash sought from the sale of the Allen and Winn facilities.

That $700 million is roughly the same amount the state would pay if it continued to pay the two private firms to operate the facilities. But at least the state would still own the facilities.

But there remains one other factor to toss into the equation that no one has talked about.

While the state is paying $31.51 per day to house its prisoners in the local jails, the federal government is paying upwards of $50 per day to house illegal immigrants.

Given the choice of earning an extra $18.49 per day, a 58.7 percent bump, a lot of sheriffs will opt for the economic consideration of tossing out the state prisoners in favor of dealing with the feds. Where would that leave the state if it has no facilities of its own?

There’s no reason to think that a private firm, once it purchases the state facilities, would not do the same thing when its contract with the state comes up for renewal and the state would have no choice but to acquiesce.

Jindal has also mentioned the possibility of selling several state buildings—buildings that, ironically, were constructed less than a decade ago in an effort to get state offices out of paying rent on privately-owned office space—and of drawing on future State Lottery proceeds.

That would put the state in the position of paying for the buildings twice—all for the sake of obtaining one-time revenue for recurring expenses, according to House Appropriations Committee Chairman Jim Fannin (D-Jonesboro). “We would still have to pay off the mortgage on the buildings while we paid rent to the new owners,” he said.

Privatization has become Jindal’s addiction and he is acting like a desperate street junkie willing to do just about anything to get a quick fix.

And as with the case of all addicts, that can be a dead-end street.

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Rhodes Scholar governor’s road to jail deal forked

Posted in Governor's Office, House, Senate, Legislature, Legislators, Prison, Privatization, Transparency on February 24, 2011| 4 Comments »

A funny thing happened on the way to Gov. Bobby Jindal’s anticipated 11 a.m. press conference on Wednesday to announce his plans for the privatization of several state prisons: it never happened. And what did occur quickly morphed into damage control in the governor’s office.

Instead of a real live press conference, the media received only a four-page press release that said, in essence, that the state was transferring Dabadie Correction Center in Pineville and Avoyelles Correctional Center in Cottonport to the sheriffs of the two parishes.

The press release even contained extensive laudatory quotes by the sheriffs of the two parishes as well as by the executive director of the Louisiana Sheriffs’ Association and James LeBlanc, secretary of the Department of Public Safety and Corrections. To a man, they praised the agreement, claiming the move would be beneficial to the state and to both communities.

But when the Alexandria Town Talk hit the streets on Thursday morning, readers learned that both sheriffs had, almost in unison, disavowed any such agreement. Both Rapides Sheriff Charles Wagner, Jr. and Avoyelles Sheriff Doug Anderson indicated they had no inclination—or intention—to take over the facilities.

The governor’s press release quoted Wagner thusly: “Our intention is to save the jobs at Dabadie for our community and to continue to sustain Camp Beauregard. Working with the Louisiana Department of Corrections, we have developed a partnership that has proven beneficial to both of us.”

By Thursday morning, however, Wagner was singing a different tune—that is, if he did in fact utter the statement attributed to him by the governor’s press office in the first place. He quickly notified LeBlanc to reiterate his opposition to the plan.

Anderson was quoted as saying Avoyelles Correctional Center “represents an opportunity for this sheriff’s office to provide a basis for continued employment of those correctional officers in Avoyelles Parish.” Later, like Wagner, he would deny ever having agreed to take over the 1,564-bed prison.

Where were Sheriffs’ Association Executive Director Hal Turner and LeBlanc when the dust had settled on Thursday? Well, Turner didn’t have much to say. He apparently said enough on Wednesday through the governor’s press handout. “Today’s announcement is further evidence of the strong partnership Louisiana sheriffs have with the Department of Correction,” he gushed.

LeBlanc, however, was not so reticent, sniffing “In the event the Avoyelles and Rapides Parish sheriffs do not want to take over these prisons, the department will begin to seek private sector bids on the facilities to move forward with their sale/operations.”

Jindal, meanwhile, has had little to say. Of course, it’s hard to speak with egg all over your face and with your credibility having taken a hit broadside.

So, what, exactly, happened? How did such a monumental misunderstanding of such epic proportions occur?

Simple.

Either somebody (read: Jindal) jumped the gun with an announcement that turned out to be embarrassingly premature, ill-advised, and inaccurate, or

Somebody (read: two sheriffs) lied after receiving a groundswell of protests from local residents.

This much is known: State Reps Robert Johnson (D-Marksville) and Chris Roy (D-Alexandria) and State Sen. Joe McPherson (D-Woodworth) got an earful from their constituents. The main complaints were that they (the citizenry) were not informed about the planned transfers, had seen nothing to convince them that the state would save money or that employees would not have their salaries cut or worse, lose their jobs.

But we digress. Back to what happened.

An administration official close to the situation says flatly that the sheriffs are lying. “They knew about this and they agreed to it,” he said. “The real screw-up was that there was nothing in writing. Nobody in the governor’s office had them sign off on something as simple as an agreement in principle and it gave the sheriffs deniability. It gave them the chance they needed to weasel out of the deal.”

So why in the name of everything neat and binding didn’t Jindal’s boys get the sheriffs’ signatures on a document of some sort? No one but Jindal’s boys can answer that one.

It also brings into question his ability to act like a governor. The state pays local sheriffs in every parish $31.51 per day for each state prisoner housed in local jails and the sheriffs love the arrangement. With the 1,564-beds in Avoyelles and another 580 in Dabadie, that’s potentially a combined income of more than $24.6 million per year for the two sheriffs’ offices. What’s not to love about a sweet deal like that?

Practically any governor dating all the way back to Huey Long would have had buses waiting at the gates of both facilities come dawn Thursday morning to remove all state prisoners from the facilities in retaliation for the sheriffs’ having the temerity to show him up in such a brazen manner.

It would have been one of the better—and one of the more effective—shows of force by a governor since Huey Long coerced 15 state senators to sign his infamous “Round Robin” statement, pledging to vote “not guilty” in his 1929 impeachment trial, though maybe not as clever as brother Earl’s firing the head of state hospitals in 1959 and replacing him with a crony who subsequently ordered Earl’s release from a state mental hospital in Mandeville. Such muscle-flexing sends a clear message as to exactly who is in charge.

Instead, Rhode Scholar Jindal, Louisiana’s Ivy League governor, let two first term sheriffs make him look silly.

And even though he insists he has the job he wants, this latest debacle begs the question: What will happen if he is elected president and participates in an economic summit with Vladimir Putin? Or Chinese Premier Wen Jiabao?

It could get ugly.

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State contracts continue to proliferate

Posted in Campaign Contributions, Contract, Contracts, Education, Governor's Office, Higher Education, Legislature, Legislators, Lobbyist, Public Records, Transparency on February 6, 2011| 2 Comments »

The big news out of the nation’s capital last week was a Feb. 3 Washington Post story trumpeting the fact that the federal government spent $15 billion less on contracts for outside products and services during fiscal 2010, the first reduction since 1997.

The $15 billion cutback in contracted services will barely show up in the federal budget but the decrease from $550 billion to $535 billion is a start for those seeking ways to reduce the federal deficit.

The $550 billion spent on contracts during fiscal 2009 was more than double the amount awarded in federal contracts as recently as 2001. Federal contracts have gone unchecked for so long that the practice spawned its own organization. The Professional Services Council is a trade association (read: lobbyist group) formed specifically for the government professional and technical services industry.

Gov. Bobby Jindal and the Louisiana Legislature might be wise to take their cue from Washington for a change instead of continuing to snipe at the Obama administration—at least on this one issue. Obama’s fiscal 2012 budget will propose an additional reduction of 10 percent in federal contracts. That’s another $50 billion or so in cuts, something that should make fiscal conservatives weep for joy.

For fiscal year 2008-09, the latest data available, Louisiana had 6,304 contracts for goods and services worth a whopping $5 billion, according to the state’s annual report for that year. That figure is somewhat misleading in that nearly $3.2 billion was in the form of 1,083 cooperative endeavor agreements ($2.9 billion), 468 interagency contracts ($213.4 million) and 495 intergovernmental contracts ($79.4 million). In other words, it was money simply shuffled between agencies.

But that still leaves 1,292 professional services contracts ($178 million), 160 personal contracts ($7.4 million), and 1,275 consulting contracts (an eye-popping $1.4 billion).

Like the federal contracts, state contracts have increased by 153 percent in dollar amount since fiscal 2005-06 when a paltry $2 billion in contract work was on the books. That amount made a quantum leap to $3.3 billion the very next year (a 64.6 percent increase), and jumped to $4.7 billion in 2007-08, an increase of another 44.5 percent.

Granted, much of that increase in 2006-07 was for contracts for recovery from two devastating 2005 hurricanes—Katrina and Rita—and granted, much of the money was from the influx of federal disaster relief dollars. But once the genie is out of the bottle, it’s hard to put her back. In 2008-09 the dollar amount nudged up another $337 million, helping to set the stage for the budgetary disaster now being faced by the Legislature and the Jindal administration.

The state has a $37.2 million interagency contract with the office of the attorney general for legal representation to various state agencies, boards, commissions, and departments but still sees the need for scores of private legal firms across the state to “provide legal services to various state agencies.” Only the top 50 contracts were listed in the report, but 41 of those totaled an additional $33.4 million. Eight of those contracts were for legal services totaling $18.3 million on behalf of indigents statewide, the report said.

Contracts, particularly professional service and consulting contracts are handed out by the state like so much candy on Halloween night and there appears to be little oversight. Fully half of all state contracts awarded during 2008-09 were not approved by the Office of Contractual Review (OCR).

The $5 billion for the 6,304 contracts approved by OCR is only part of the problem. Hidden away among all the numbers spewed out so far is another $655.5 million for 6,341 contracts that were awarded in fiscal year 2008-09 which were approved not by Contractual Review, but by the individual agencies awarding the contracts.

These contracts, awarded under an obscure state law that allows the OCR director to delegate authority to state agencies for approval of professional, personal, consulting and social services contracts. Typically, such contracts are for $20,000 or less but the statute also grants leeway to the OCR director to delegate that authority to any state agency as deemed appropriate.

Accordingly, 5,334 of those contracts awarded under the delegation of authority were for amounts below the $20,000 threshold. Those 5,334 contracts totaled $51.7 million, an average of $9,700 per contract. Another 1,007 contracts totaling $603.7 million, however, were also awarded under the delegation of authority.

More than half of that amount, $330.9 million, was accounted for in 383 contracts awarded by the Office of Group Benefits.

Group Benefits had another 32 contracts totaling $898 million approved by OCR. Other contracts approved by OCR included 282 for the Office of Economic Development ($629.6 million), and 1,080 awarded by the governor’s office through the Division of Administration ($2.3 billion).

One contract, for $68.9 million was apparently a major windfall for Cypress Realty Partners of Baton Rouge. The contract was for an alternative housing pilot program for the Louisiana Recovery Authority. An internet company profile of Cypress Realty said the company employed six people and had annual revenues of $410,000.

Two other contracts, both intergovernmental, were with out-of-state universities and totaled more than $900,000. Jackson State University of Jackson, Mississippi, was awarded a contract in the amount of $536,435 to “recruit, select and train teachers for placement in high need local education agencies/school systems.”

Clemson University of Clemson, South Carolina, was awarded a $375,000 contract to develop “active, selective catalysts for the conversion of natural-gas derived syngas (synthetic gas) to ethanol.”

Several contractors were paid to represent the state in other countries. Pathfinder Team Consulting received a $690,000 contract to provide foreign representative services in Europe while Access Marketing got a $234,000 contract to serve as a foreign marketing representative in Ontario Province and western Canada for the Office of Tourism.

A contract for $148,500 was awarded to Louis Bowden, dba Asia Capital to provide foreign representative services in China. Steve Lee and Hernan Gonzalez each received $75,000 contracts to provide foreign representation in Taiwan and Mexico, respectively. Ofihotel S.A. had a $60,000 contract to provide foreign representation in Central America.

Following is a partial list of contracts for fiscal year 2008-09:

• V- Vehicle Company, Ouachita Parish ($87 million);

• Foster Poultry Farms, Union Parish ($50 million) as inducement to purchase and operate poultry production and processing plant and provide 1,100 jobs;

• Lafourche Parish Council ($24.8 million), repair, rebuild, replace hurricane-damaged infrastructure;

• Bayou Lafourche Fresh Water District ($17.5 million) to clear debris from Bayou Lafourche;

• Lafourche Parish School Board ($480,000) to provide academic assistance in literacy and/or math, enrichment, recreation, technology, tutoring parental involvement and family literacy activities;

• Lafourche Parish Council, Office of Community Action ($319,964) to provide services and programs in accordance with the Community Service Block Grant Act of 1981;

• Terrebonne Port Commission ($10 million) for bulkhead, land improvements and other related infrastructure improvements, planning and construction;

• Terrebonne Parish Consolidated Government ($2.2 million) to provide intensive residential treatment program, provide funding to assist with design of a ring levee to surround Chabert Medical Center;

• St. Mary Parish Government/Council ($3.55 million) to operate a 52-bed inpatient treatment programs to individuals with addictive disorders; to operate a 12-adult bed and 21-children’s bed for TANF-eligible women and their dependent children;

• Vermilion Parish School Board ($9.2 million), rebuild, repair, replace hurricane-damaged primary and secondary public school infrastructure;

• Vermilion Parish Police Jury ($5.5 million) to repair, rebuild, replace hurricane-damaged infrastructure;

• St. Martin Parish School Board ($302,784) to provide comprehensive/preventive services to registered students;

• Jefferson Davis Parish Police Jury ($310,821) to complete strategic prevention framework planning process for substance abuse;

• West Feliciana Acquisition, LLC ($6 million) for acquisition, improvement, and operation of a paper mill in St. Francisville, creating 200-375 jobs;

• City of Ville Platte ($675,000) to provide juvenile delinquency prevention/diversion services to youth;

• City of Hammond ($367,728) to provide juvenile delinquency/diversion services;

• Southeastern Louisiana University TIP Comptroller’s Office ($2.1 million) to provide a continuum of family preservation, community based family support services;

• Lallie Kemp Regional Medical Center ($785,000) to provide Ryan White Care Act Aids Drug Assistance program;

• Grambling State University ($106,601) to provide educational opportunities for persons committed to entering or continuing in the field of child welfare;

• Louisiana Tech University ($1.2 million) to provide lessons to youth ages 11-14 to prevent/reduce addictive disorders;

• Southeastern Louisiana Area Health Education Center ($5 million) to provide system point of entry services for St. Mary, Terrebonne, Lafourche, Tangipahoa, and Washington parishes;

• First Steps Referral and Consulting ($2.8 million) to provide system point of entry services and provide site development workshop training to school leadership and teachers in Acadia, Evangeline, St. Martin, and Vermilion parishes;

• Families Helping Families at the Crossroads of Louisiana ($2.7 million) to provide point of entry services in LaSalle, Avoyelles, and Winn parishes;

• Youth Empowerment Project ($1.3 million) to provide system point of entry services for reintegration services for youth and counseling for families in Acadia, Evangeline, St. Martin, Vermilion, Jefferson Davis, and Allen parishes.

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