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Archive for the ‘Revenue’ Category

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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“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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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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“Over the last four and a half years, we have outperformed the national and southern economies, and in order to continue to attract business investment, we need to stay competitive with the rest of the country and the world.”

–Gov. Piyush Jindal, on signing into law two bills to “increase economic competitiveness” by creating a corporate headquarters relocation program.

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That $80.6 million Broadband Technology Opportunities Program (BTOP) grant to provide high speed broadband internet to rural areas of Louisiana keeps rearing its ugly head.

That’s the grant—the second grant—that Gov. Bobby Jindal eschewed and eventually lost when the U.S. Department of Commerce issued a three-page letter of revocation last October. Jindal had earlier declined to apply for a $60 million grant for early childhood education.

LouisianaVoice has obtained information that indicates the forfeiting of the broadband grant now appears to have been the brainchild of none other than the American Legislative Exchange Council (ALEC), which last August bestowed its highest honor, the Thomas Jefferson Freedom Award, on Jindal at ALEC’s national conference in New Orleans.

The project would have created 900 miles of cable over 21 rural parishes in Louisiana and would have supported several Louisiana universities with expanded optical fiber networking capacity that could have complimented the Board of Regents’ $20 million Louisiana Optical Network Initiative (LONI) project, designed to extend high-speed networking capabilities in the state.

But Jindal, whose wife’s charitable foundation received funding from AT&T, preferred that the project be carried out by private companies—such as AT&T. He refused to re-apply for the grant because of what he called a “heavy-handed approach from the federal government that would have undermined and taken over private business.”

U.S. Sen. Mary Landrieu called Jindal’s reasoning “hogwash.” She said the grant would not have interfered with private enterprise and in fact, just the opposite was true. “We weren’t trying to create a government broadband system; it’s granting money for private companies to lay the cable,” she said.

Even more ominous, that revocation letter from Arlene Simpson Porter, director of the National Oceanic and Atmospheric Administration Division (NOAA), informed the Jindal administration, “Consideration of this adverse action may be used in future funding decisions for your organization.”

That could mean that Jindal’s decision could be used against the state in any future grant applications.

The problems started March 17, 2011, when BTOP staff informed the Board of Regents that the project was nine months behind schedule. A formal response was requested by May 13, 2011, but on May 17, there still was no formal response and a corrective action plan (CAP) letter was sent to the Board of Regents.

That was followed on May 26 by a conference call between BTOP staff, the Board of Regents and the Division of Administration (DOA) to discuss the CAP response. On June 14, the Board of Regents and DOA issued a response letter in which it was noted that the DOA Office of Information Technology (OIT) would provide project oversight to ensure that implementation of the BTOP grant would not be in direct competition with private providers.

The state was notified on July 6 that it was even further behind on the project and additional problems were encountered on July 12. On July 27, the National Telecommunications and Information Administration (NTIA) requested that NOAA suspend Louisiana’s U.S. Treasury Automated System Application for Payment (ASAP) account pending corrective actions, including delivery of project benefits and compliance with award terms and conditions.

The Board of Regents on Aug. 8 provided BTOP staff with a chart outlining the planning process and goals. A month later, the Regents proposed an alternative design that included a new plan, new project schedule with new structure and milestones and a survey of service providers that would provide unspecified indefeasible right of use (IRU). An IRU is a contractual agreement between operators of communications systems, including fiber optics.

The Regents’ proposal was rejected by NOAA, which on Sept. 20 issued a 30-day notice of termination of award. That was followed by Simpson-Porter’s Oct. 26 termination letter.

Could the loss of the grant have been orchestrated by ALEC? Could the administration have deliberately stalled until the grant was pulled in order to comply with ALEC’s national agenda?

Perhaps we will never know the answer to that, but consider this:

As far back as August of 2010, at ALEC’s annual meeting in San Diego, its Telecommunications & Information Technology Task Force passed the following resolution:

Whereas, it is the mission of the American Legislative Exchange Council to advance the Jeffersonian principles of the free markets, limited government, federalism and individual liberty, and

Whereas, broadband information services sector is critical to growing the nation’s economy, enhancing quality of life through new and innovative applications, and enabling greater job creation, and

Whereas, the rise of private investment in broadband technologies has dramatically transformed the way consumers work, live, learn, and conduct their daily lives, and

Whereas, ALEC believes that innovation, private investment, and market competition, not additional regulations, should drive the continued deployment and adoption of broadband information services, and

Whereas, the FCC has moved forward with a plan that would impose its authority on the internet and regulate the provision of broadband information services, and

Therefore, be it resolved that ALEC voices its support of lawmakers and regulators avoiding the unnecessary, burdensome and economically harmful regulation of broadband internet service companies, including the providers of the infrastructure that supports and enables internet services, and further

Be it resolved that ALEC urges that the FCC, Congress, and state regulatory and legislative bodies refocus their efforts on specific and limited initiatives targeted at ensuring that broadband service is made universally available and affordable to consumers, rejecting overly prescriptive regulation that would harm innovation, investment, and job growth, and further

Be it resolved that ALEC’s opposition to the sweeping redefinition of broadband services be communicated to all ALEC members, and further

Be it resolved that ALEC shall convey its support to the members of the United States Congress and Executive Branch.

The resolution was offered by Intuit, Inc., following a presentation by Eagle Communications on “concerns over federal grants being used to fund businesses to compete head-to-head with broadband service providers in areas that are already being served.” Intuit was one of the corporate members that recently pulled out from ALEC after the controversy over Florida’s “Stand Your Ground” law, a law strongly supported by ALEC, and the subsequent shooting death of a black youth by a neighborhood watch volunteer.

AT&T and Cox Communications, both major investors in cable TV and internet services, are also members of ALEC. AT&T even serves on ALEC’s corporate board.

Louisiana legislators attending that San Diego conference – at state expense – included:

• Former Rep. John LaBruzzo (R-Metairie);

• Rep. Robert Johnson (D-Marksville);

• Rep. Thomas Carmody (R-Shreveport);

• Rep. Tim Burns (R-Mandeville);

• Rep. Joe Harrison (R-Gray);

• Rep. Bernard LeBas (D-Ville Platte);

• Sen. Yvonne Dorsey (D-Baton Rouge).

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