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Archive for the ‘Revenue’ Category

OGB sending out letters in attempt to recoup wrongfully paid claims; seeking to blame retirees, own workers for problems

Posted in Corruption, Ethics, Finances, Fraud, Health Care, OGB, Office of Group Benefits, Privatization, Public Records, Revenue, State Agencies on March 3, 2016| 12 Comments »

What happens when a former governor’s privatization plan goes terribly wrong?

Okay, perhaps we need to be a little more specific, given so many things have gone so terribly wrong with so many of Bobby Jindal’s half-baked privatization schemes.

In the case of the Office of Group Benefits, the answer is plenty and none of it is good.

As chronicled in several posts, LouisianaVoice told of then-Commissioner Paul Rainwater first saying OGB would be sold, then saying it would not be sold, and in the end, its operations were turned over to Blue Cross/Blue Shield of Louisiana, throwing about 150 OGB employees to the curb.

Tommy Teague, who had taken over the debt-ridden agency and transformed it into a smooth-running outfit which managed to build a $500 million fund balance from which it paid claims promptly, giving state employees and retirees and their dependents little cause for concern, is a case in point.

For his trouble, he was fired (teagued) because he didn’t fall immediately in line with Jindal’s Milton Friedman-inspired doctrine of privatization. Teague’s successor lasted barely six weeks before he threw in the towel and departed for another state.

Along the way, the administration went against the advice of its own expensive consulting firm and lowered premiums to OGB members. That looked good for the covered employees but what the move really accomplished was the state’s being obligated for a lowing matching amount. The state pays 75 percent of the employee premium and by lowering the premium, it simultaneously reduced the state’s obligation and the money saved was used to patch one of those gaping holes that appeared in the state budget every single year of the Jindal administration. It was, in short, a shell game run by a con artist with one eye on the big score—the presidency.

Of course, that also had the effect of creating a heavy drain on that $500 million reserve fund, since premiums could no longer keep up with the cost of claims.

Accordingly, the $500 million evaporated to something around $100 million and Rainwater’s successor Kristy Nichols tried to implement a plan to simultaneously raise premiums and lower benefits to build the reserve back up—a plan that was revealed first by LouisianaVoice and which met instant opposition from employees, retirees and legislators.

The administration backed off that plan somewhat but the final compromise version left some retirees who lived out of state without coverage.

It also drove other retirees to other plans like People’s Health where premiums were cheaper and benefits better.

And that’s where the latest snag rears its ugly head.

Because the agency has been gutted of those employees who made it into such an efficient operation, things—big things—are starting to fall between the cracks and the plan apparently is to blame retirees and OGB’s fiscal collection department.

What has happened, according to word received by LouisianaVoice, is that OGB has failed to cut off coverage for retirees who self-pay for their coverage (through other programs) and who are “delinquent” in their premium payments.

It seems that OGB has not put “stop flags” on self-pay accounts that are in arrears for months but continued to pay claims. “Group Benefits has dozens of people who are late and they (OGB) are still paying claims to doctors and hospitals for X-Rays, MRIs, surgeries and prescriptions,” our source told us, adding that OGB initially told its fiscal collection department to ignore the delinquencies.

Now, though, OGB is sending out letters demanding payments for unpaid premiums.

OGB LETTER

(CLICK ON IMAGE TO ENLARGE)

One such letter provided to LouisianaVoice demanded payment of $10,511 in premiums dating back to October 2014 and pharmacy benefits of $425.

The Feb. 18, 2016, letter to the retiree said coverage “on OGB-administered health plans will terminate in October 2014 for non-payment of the full premium. During this period our records show that you continued to use the health and pharmacy benefits of the plan.”

Notice that the letter was dated Feb. 18, 2016 but said coverage “will terminate” in October of 2014.

No reason was given for a 2016 letter warning of pending termination of coverage in 2014. But that is somehow typical of any holdover from the Jindal years.

The individual was told if the plan was to be retained, the retiree would owe $10,511.29. “Should you not wish to retain your coverage through OGB, any medical claims incurred by you since Nov. 1, 2014, will be re-adjudicated and you may receive bills from your providers for services rendered,” the letter said.

“Pharmacy benefits cannot be re-adjudicated; accordingly, OGB will recoup costs incurred…by you,” it said, adding that the cost of pharmacy benefits “wrongfully used by you” is $425.49.

“Please consider this as demand to pay the respective amounts in full to OGB by March 4, 2016,” the letter said. “Should we not receive full payment on or before March 4, 2016, we may initiate further action to collect this sum, including but not limited to referral of this matter to the Office of Debt Recovery, the Attorney General, and/or other collection means.”

Below that was an ominous warning in boldface and all capital letters that read, “THIS IS A DEMAND FOR PAYMENT OF MONIES DUE. PLEASE TAKE NOTICE AND GOVERN YOURSELF ACCORDINGLY.”

Our source said that OGB administrators plans to place the blame for the latest fiasco on retirees and its own fiscal collection department. “They have a plan to hide this because they are scared the public, the commissioner of administration (Jay Dardenne) and the governor will find out.” The collections department, the source said, has maintained a paper trail which will absolve it of any fault in the matter.

“OGB is trying to get money back on the sly,” the source added. “They (OGB) are mismanaged and there are a lot of people in this condition who were allowed to keep insurance and paid no premium for years.”

EDITOR’S NOTE: We would love to hear of any similar difficulties you may have had with OGB. Send your stories to:

louisianavoice@yahoo.com

 

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SLU associate professor says Advocate columnist can only arrive at state expenditure numbers by ‘making them up’

Posted in Budget, Education, Ethics, Finances, Revenue, Transparency on March 1, 2016| 20 Comments »

There are three or four of us who every Sunday morning break out into a round robin email dissection of the latest op-ed column by LSU-Shreveport political science associate professor Jeff Sadow. While we invariably disagree with Sadow’s philosophical position, we have finally arrived at a consensus that The Advocate is striving for balance on its opinion pages.

On Tuesday (March 1) I received a copy of the following blog post by Michael Kurt Corbello, Ph.d. and a former classmate of Sadow. I immediately contacted Dr. Corbello, a political science associate professor at Southeastern Louisiana University, to inquire if he would be willing to post his comments on as a guest columnist on LouisianaVoice. To our delight, he consented. Following is his column:

By Michael Kurt Corbello

Copyright 2016

     Numbers can be pesky things, a great source for truth, or a weapon to mislead.  Scientists like numbers because they are transparent, until human beings interpret them or insinuate that they have done so.  I am a political scientist who teaches my students “math is the language of objectivity!”  Yet, three-plus decades of research and teaching have taught me the pitfalls of data collection and interpretation for someone trying to conduct scientifically valid research, even if it proved me wrong.  In partisan politics, many divest themselves of scientific validity, some accidentally, others purposefully, and still others because they fail to admit their biases.  We all have biases, but numbers have a way of cutting through those most cherished.

Recently, Jeff Sadow for The Advocate (See “Lawmakers should call Edwards’ bluff on TOPS, Medicaid,” The Advocate, February 27, 2016) criticized Gov. John Bel Edwards’ budget plan during the special session of the Louisiana State Legislature, arguing that the governor “refuses to meaningfully pare a state government that ranks well above the national average in per capita spending” [emphasis added].  Sadow didn’t indicate sources supporting these value statements, so I collected the most recent data and examined it. In fact, the only way to arrive at the columnist’s conclusion that Louisiana ranks “well above the national average in per capita spending” is to make it all up!

I looked at the most recent U. S. Census data estimates of state populations for 2015. I combined this with data from the National Association of State Budget Officers, State Expenditure Report (Fiscal 2013-2015) (Table A-1 in the downloadable report). In 2015, total state general fund and federal fund expenditures per capita ranged from a low of $3,724 (Florida) to a high $18,644 (Alaska), with a national average per state of $6,717. Louisiana ranked 22nd out of fifty states, in the middle of the pack, at $6,365 per capita. That’s right! Louisiana was $352 per capita below the state averages nationwide! Among 16 southern states, Louisiana ranked 7th in total state general fund and federal fund expenditures per capita, about $134 per capita above the state averages in the south.

Notice that while Louisiana spent a total of $29.7 billion in 2015, $10.15 billion of this was federal funds, $2,173 per capita (ranked 14th), or about $200 per capita above the state averages nationwide. The Louisiana state portion of total state spending was $19.58 billion. Nationwide, state general fund expenditures averaged $4,744 per capita. Louisiana averaged $4,192 in per capita state general fund spending, placing it 23rd, or $552 per capita below the state averages nationwide!

Now, I don’t mind voters, politicians, and citizens calling into question the spending and priorities of state government. All of us should be vigilant in our efforts to take care of our community of needs, while reigning in the natural and selfish human inclinations to abuse the system! However, looking at this data, it is difficult to make the argument that, compared to other states, Louisiana has a spending problem. Whether we look at per capita spending or gross dollar amounts, Louisiana was in the middle of the pack of fifty states, with one exception: We ranked 14th in State Federal Fund Expenditures! For that matter, Louisiana was one of eight southern states (including Arkansas, Delaware, Kentucky, Maryland, Mississippi, Tennessee, and West Virginia) in which state federal fund expenditures per capita were above the average per state nationwide ($1,973 per capita). In other words, we are dependent upon everyone else for a huge amount of resources in our state budget. Why? Because of our history of poverty, low levels of education, and lack of economic development (regardless of the deadbeat mantra always coming from Bobby Jindal and his apologists)! Imagine if we in Louisiana really did have to pay for our own spending!

The fact remains that we do not live in the 18th century, with the luxury to implement a minimalist government, not if we want to have a competitive position in a world driven more and more by competitive people of high intellect, hard work, creativity, technological knowledge and skill!  Anyway, those pesky numbers, they must be liberals!

For a closer look at the data used to draw my conclusions (and to refute The Advocate’s columnist), please click on the following link to my blog: http://corbellopolitics.blogspot.com/2016/02/an-advocate-writer-does-it-again-why.html

 

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After 30 years, Louisiana still pursues its failed industrial inducement policy that only serves to empty state treasury

Posted in ALEC, American Legislative Exchange Council, Broadband, Internet, Budget, Business, Economy, Education, Exemptions, Incentives, Finances, Governor's Office, Higher Education, Incentives, Legislature, Legislators, Politicians, Revenue on February 24, 2016| 11 Comments »

As it turns out, that quote was attributed to Einstein in error but the fact that he never said it doesn’t alter the accuracy of the definition.

And for at least three decades, Louisiana along with the rest of the South, has insisted on following the same outdated industrial inducement policies first warned about in a 1986 report by MDC, Inc. (Manpower Development Corp.) of Durham, N.C.

One of the members of the MDC Panel on Rural Economic Development which produced the 16-page report Shadows in the Sunbelt was Dr. Norman Francis, then President of Xavier University and Chairman of Liberty Bank in New Orleans. https://gri.unc.edu/files/2011/10/Shadows-in-the-Sunbelt-86.pdf

That 1986 report was followed up in 2002 when MDC published a 44-page report entitled The State of the South. http://mdcinc.org/sites/default/files/resources/MDC_StateOfTheSouth_2014.pdf

Both reports said much the same thing: that the market had dried up. There were, the reports said, 15,000 industrial inducement committees in the South chasing 1500 industries—and if they relocated at all, it would be whether inducements in the form of tax incentives were offered or not. “At best, the states have assisted businesses in doing what they wanted to do anyway,” the ’86 report said.

“The factors which once made the rural South attractive (to industry) are now losing relevance,” it said. That’s because the South, which once boasted an abundance of low-cost labor, can no longer complete in the global market. Where American apparel workers would earn $6.52 an hour (remember, this was in 1986, but the numbers are still comparable), their counterparts in Korea and Taiwan earned $1 and $1.43, respectively, and Chinese workers made about 26 cents per hour.

Shadows in the Sunbelt called southern states’ tax incentives to lure business and industry a “buffalo hunt,” an analogy to the great buffalo hunts of the 19th century which nearly wiped out the North American bison population. “Yet the hunters (states) continue in their pursuit, hoping to bag one of the remaining hides,” the report said.

The stampede actually started in Mississippi 80 years ago through a program called “Balance Agriculture with Industry” whereby the state used municipal bonds to finance construction of new plants. That practice evolved into tax breaks offered to prospective industries as states began forfeiting property tax revenues to lure new jobs.

Today, Louisiana gives up about $3 billion each year in tax breaks and credits doled out in various programs, all of which are designed ostensibly to attract industry and raise the standard of living through more and better jobs but which in reality, do little of either.

What we’ve received instead are tax breaks for duck hunters, chicken plucking plants, Wal-Mart stores, fast food franchises and for industries that either (a) get the tax incentives but which soon shut down operations (Nucor Steel, General Motors) or (b) claim the creation of great numbers of new jobs but which actually are far fewer than announced.

In fact, the ’86 report said, a long-term study of job promises in South Carolina revealed that only 52 percent of the jobs promised actually materialized. In Louisiana, when Bobby Jindal ran for re-election in 2011, he claimed in TV ads that the Louisiana Department of Economic Development during his first term handed out incentives that brought 25,425 new jobs to Louisiana. The actual number, however, was only 6,729. That’s only 26.5 percent of the jobs promised. https://louisianavoice.com/2011/09/29/jindal-plays-fast-and-loose-with-jobs-claim-tv-campaign-ad/

The ’86 report said as much. “The costs of inducements offered to attract industry are also heavy—and in some cases counterproductive,” it said. Evidence showed that tax breaks did not significantly affect plant location decisions but states nevertheless open up the state treasury for companies to loot even though the benefits do not offset the costs. “Whatever the effectiveness of industrial recruiting in the past, current trends clearly indicate that its value as a tool for economic development is declining,” it said.

That was 30 years ago and we’re still giving away the store by adhering to a faulty ALEC-backed policy of favoring corporations over citizens.

As an alternative, the report recommended that in lieu of spending millions to attract out-of-state industries, states should implement programs to support local development and to encourage entrepreneurship.

The 2002 report, State of the South, only reiterated the recommendations of the study of 16 years earlier. It also should have sent a clear message to the Louisiana Legislature and to Bobby Jindal six years before he came to power. The latter report’s recommendations included:

  • Refocus state agencies responsible for economic development to pursue a broader, more strategic approach;
  • State governments should not measure success simply by the number of new jobs, but also in terms of higher incomes for people and improved competitiveness of regions within the states;
  • Modernize tax systems so that states have the fiscal capacity to provide excellent educatin, widely accessible job training, necessary infrastructure, and community amenities that enrich the soil for economic development;
  • Tighten performance criteria for industrial incentives—and encourage associations of Southern governors and legislators to reexamine the one-dimensional, incentives-driven recruitment strategy in favor of a comprehensive economic development strategy;
  • Dramatically expand efforts to erase serious deficits along the entire education continuum in the South, and bolster the education, health and well-being of children;
  • Draw on universities and community colleges to act as catalysts for state and regional economic advancement.

The 2002 report said high-poverty, sparsely-populated areas are last to get telecommunications infrastructure. More than 60 percent of the zip codes in the Delta areas of Arkansas, Mississippi and Louisiana have no broadband internet provider which further widens the competitive gap for these areas. Yet Jindal rejected an $80 million federal grant to install broadband in Louisiana’s rural areas. http://www.nola.com/politics/index.ssf/2011/11/80_million_grant_for_rural_bro.html

Because Louisiana, along with the rest of the South, made a commitment to low taxes, low public investment, and low education in return for jobs. That strategy trapped the state in a cycle of low-wage, low-skill industry “begetting more low-wage, low-skill industry,” and thus perpetuating the “Wal-Mart Syndrome.”

Mac Holladay, who served as head of economic development for three Southern states summed up the situation. “If we had put the vast majority of our economic development resources into incubators, small business services, export training, and existing business assistance instead of recruitment and overseas offices, it might have made a big difference.”

Tax abatements and other financial giveaways, the 2002 report said, “inevitably drain resources from schools, community colleges and universities—public investments that are crucial to long-term economic advancement. Incentives provide a better return on investment when they build a community’s infrastructure, provide workers with higher skills and attract jobs that pay markedly more than the prevailing wages.”

Even when Mississippi granted $68 million in incentives for Nissan’s assembly plant in Canton, a small town just north of Jackson, the company’s director of human resources told the Jackson Clarion-Ledger that he could not name any Canton resident likely to be hired for one of the 5,300 jobs starting at $12 per hour. He attributed that to the town’s 27 percent poverty rate, 76 percent of out-of-wedlock births and 44 percent of adults without a high school diploma.

Carley Fiorina, former chief executive for Hewlett-Packard and more recently an unsuccessful candidate for the Republican presidential nomination said, “Keep your incentives and highway interchanges. We will go where the highly skilled people are.”

“Not so long ago,” said the 2002 State of the South report, “the South sought to build its economy by enticing companies from afar to relocate with the bait of cheap land, low taxes, and a surplus of hardworking but undereducated workers. That old recipe no longer works to feed families and sustain communities.

“No comprehensive strategy would be complete without further efforts to bolster public schools,” the report said.

“There must be a recognition that the ultimate challenge lies in the educational and economic advancement of people who have gotten left behind,” it said. “We must get the message out to every household, every poor household, that the only road out of poverty runs by the schoolhouse.

“The line that separates the well-education from the poorly education is the harshest fault line of all.”

Yet, Louisiana’s leaders insist on doing the same thing over and over and expecting different results.

And we keep electing the same failed policy makers over and over and over…

Insanity.

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Wal-Mart: feeding at the public trough while underpaying workers, destroying Louisiana’s mom and pop businesses

Posted in Auditor, Business, Corruption, Economy, Ethics, Exemptions, Incentives, Finances, Incentives, Jobs, Legislature, Legislators, Public Records, Revenue, Taxes on February 24, 2016| 6 Comments »

The past is prologue

                                    —William Shakespeare (The Tempest)

In 1936, Mississippi Gov. Hugh White successfully pushed through the state legislature his answer to President Franklin Roosevelt’s New Deal so despised by southern states.

Mississippi could grow and prosper through his landmark “Balance Agriculture with Industry” program, according to Mississippi native Joseph B. Atkins, author of the little-known but important book Covering for the Bosses. The book is an examination of how newspapers in the South refused to give fair coverage to labor unions in their attempt to gain equitable working conditions for workers first in the textile mills and later the automobile industry.

https://books.google.com/books?id=o6AfWT79t2MC&pg=PA237&lpg=PA237&dq=shadows+in+the+sunbelt+1986&source=bl&ots=7Wb_bKCn48&sig=FIjJetyw-Li-lCk0c3zN_muV3MA&hl=en&sa=X&ved=0ahUKEwjL-Ob4k4_LAhWFPiYKHchPD50Q6AEIUDAJ#v=onepage&q=shadows%20in%20the%20sunbelt%201986&f=false

According to Atkins, White figured he could attract industry to Mississippi through the then-radical concept of offering attractive tax incentives and promises of low wages—and, of course, no unions.

The program, Atkins writes, eventually became a model for the entire South and today, Mississippi, in the latest rankings of the best states for business, can be found sitting firmly in….47th place among the 50 states, ranked ahead of only (in order) Kentucky, Louisiana, and West Virginia. In fact, the South can lay claim to six of the bottom 10 spots in the national rankings. They also include Arkansas (42nd) and Alabama (45th). Tennessee was only slightly better at 38th. Virginia (10th) and North Carolina (15th) were the only southern state in the top 20. http://247wallst.com/special-report/2016/02/17/the-best-and-worst-states-for-business-2/

So what went wrong with White’s grand scheme for Mississippi? Simply put, the same thing that doomed Louisiana, Alabama, Arkansas and Tennessee to the bottom one-fourth of the heap. They gave away their tax bases while at the same time condemning their citizens to lives of low wages and poor benefits. And Wal-Mart was first in line to fully exploit the plethora of incentives, be they the 10-year property tax exemptions, Enterprise Zone initiatives or some other inducement.

Wal-Mart, described by Wall Street Journal writer Bob Ortega in his book In Sam We Trust as “an amoral construct with one imperative: the profit motive.”

In October 2005, Atkins writes in Covering for the Bosses, that an internal Wal-Mart memo was leaked which revealed the true, impersonal attitude of the corporate office toward its 1.3 million American workers, 30 percent of whom are part-time workers.

In her memo to Wal-Mart executive vice president M. Susan Chambers complained of the costs of long-term workers. The company, she said, spent 55 percent more on them than on one-year workers even though “there is no difference in (the employee’s) productivity.” She said because Wal-Mart pays an associate “more in salary and benefits as his or her tenure increases, we are pricing that associate out of the labor market, increasing the likelihood that he or she will stay with Wal-Mart….The least health, least productive associates are more satisfied with their benefits than other segments and are interested in longer careers with Wal-Mart,” she said.

In plain language, she was advocating throwing older workers to the curb in favor of newer, lower-salaried workers.

Yet Wal-Mart has shoved its way to the public trough, securing some $100 million in economic development subsidies from the state in 20 cities from Abbeville ($1.67 million) to Vidalia ($1.65 million), from Shreveport ($6.3 million) to New Orleans ($7 million), from Monroe ($3.9 million) to Sulphur ($1.8 million).

Nationally, estimated annual subsidies and tax breaks to Wal-Mart and the Walton family total $7.8 billion per year. This for six Walton heirs whose collective net worth of $148.8 billion is more than 49 million American families combined. http://www.americansfortaxfairness.org/files/Walmart-on-Tax-Day-Americans-for-Tax-Fairness-1.pdf

A congressional report estimated that each Wal-Mart store in America generated an average of $421,000 in Medicaid, SNAP and public housing costs to taxpayers. That’s in addition to the estimated $1 billion taxpayers anted up in local and state government subsidies to have a Wal-Mart in their communities. Wal-Mart workers, who earn less than $10 an hour (about $18,000 per year), are offered a family health care plan with a $1,000 deductible costing $141 per month.

And remember that warm fuzzy “Made in USA” advertising campaign of Wal-Mart in which Wal-Mart in 2013 said it was starting a 10-year plan to increase spending on U.S. made products by $250 billion? Well fuggeboutit. It didn’t happen and last October, the company removed the “Made in the USA” logos from all product listings on its Web site after the Federal Trade Commission caught the company (gasp) lying. http://fortune.com/2015/10/20/walmart-made-in-the-usa/

Instead, much of its merchandise, clothing in particular, comes from third-world sweatshops where workers are paid pennies per hour in wages and children work up to 20 hours per day to make the clothing we purchase from Wal-Mart. https://www.dosomething.org/us/facts/11-facts-about-sweatshops

And here’s a real eye-opener.

In her book Cheap, author Ellen Ruppel Shell reveals a dirty little secret most consumers are unaware of: name-brand clothing sold at Wal-Mart aren’t quite what consumers think they are. “Discounting dilutes brands, making it less certain that they are a mark of quality,” Shell writes. http://www.nytimes.com/2009/07/19/books/review/Shapiro-t.html?_r=0

Hundreds of brands “slice and dice their offerings for various markets, selling different products in different types of stores for different prices under the same brand,” she said. “Chains such as Wal-Mart, Best Buy, Target and Home Depot have items manufactured ‘to their specifications,’ meaning that the brand name is almost devoid of meaning.”

That means a television with a model number available only at Wal-Mart is not really a Sony or a Samsung, for example, but a Wal-Mart television.

“Brands have become an end in themselves,” she writes. “…It is not the brand alone that entices discount shoppers; it is the high value we link to the brand versus the low price we pay that is so seductive.”

In recent years, Louisiana taxpayers have subsidized the construction of Wal-Mart stores in two affluent suburbs to the tune of a $700,000 tax credit. A tax credit is a dollar for dollar reduction of a tax liability meaning a $1 tax credit reduces one’s taxes by a full dollar. Bear in mind, these subsidies were Enterprise Zone projects. The Enterprise Zone program is designed specifically to lure business and industry into areas of high unemployment in order to help economically depressed areas. Instead, one of these stores were built in St. Tammany, one of the most affluent communities in the state.

Likewise, $330,000 in Enterprise Zone tax credits were awarded in 2013 to Lakeview Regional Medical Center in St. Tammany Parish for an upgrade to its facilities which created a grand total of five new jobs.

As far back as 2012, then-Secretary of the Department of Economic Development Stephen Moret said the Enterprise Zone program no longer fulfilled its purpose. http://www.nola.com/politics/index.ssf/2012/12/louisiana_economic_development_1.html

A Legislative Auditor’s report agreed, saying that 75 percent of new jobs, 68 percent of new businesses and 60 percent of capital investments were made outside the EZs. http://app1.lla.state.la.us/PublicReports.nsf/92629A33AAE8C55F862579EB0072ACEB/$FILE/00029DFA.pdf

That’s because unlike other states, Louisiana’s Enterprise Zone program allows the generous five-year tax breaks for retail establishments, businesses whose salaries traditionally are at the low end of the pay scale. Those include, besides Wal-Mart, chain stores like Walgreens and Raising Cane’s chicken outlets.

“Most of the projects are larger companies investing in relative affluent areas in Louisiana today,” Moret said in something of an understatement. He said that fact alone underscored the importance of making changes to the program.

Were changes made? No. In fact, in 2013, the year after his comments, the state awarded EZ tax credits totaling $19.6 million for projects that produced 4,857 new jobs which in turn generated about $10 million in state income taxes, or a net loss of more than $9 million to the state.

Meanwhile, Atkins quotes author Bill Quinn as saying Wal-Mart “has done more to stomp out Middle-class America than all other discount houses put together.”

Yet, the official policy of Louisiana has been to continue to give generous tax breaks to a company that underpays its employees, deceives customers into thinking they are “buying American” when in reality, they are propping up third-world sweatshops whose workers churn out second line brand names under slave-like working conditions.

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Some legislators are already diving for cover on academic funding even as they spend campaign funds on LSU tickets

Posted in Budget, Campaign Contributions, Corruption, Ethics, Finances, Higher Education, House, Senate, Legislature, Legislators, LSU, Politicians, Revenue, Taxes on February 16, 2016| 13 Comments »

True to form, some legislators are already diving for cover or accusing higher education officials of crying wolf over the state’s lack of support for state colleges and universities. Either way, it all amounts to a shameless attempt to shift the blame as a means of deflecting attention from their pitiful performance over the past eight years

Some of those doing the loudest protesting might want to look inward to examine the hypocrisy of their current positions on funding higher education.

Sen. Conrad Appel (R-Metairie), for example. Appel opined in a Senate Education Committee meeting on Monday that he just didn’t think it is fair that education leaders are getting the public all worked up with scare tactics and doomsday propheteering—not to be confused with his own profiteering, of course.

“This is the first day of the process and the news media is flashing all this stuff up and getting the people all worked up,” Appel said in accusing higher ed leaders of sensationalizing the real impact of budget cuts and of creating what he termed “a self-fulfilling prophecy.”

Of course, Appel is not one to pass up a good opportunity when he gets the chance. As Chairman of the Senate Education Committee two years ago, he was in a unique position to know of the pending deal between Discovery Education and the Louisiana Board of Elementary and Secondary Education (BESE) in time to sink between $5,000 and $24,999 into Discovery Communications stock just in time to make a killing. APPEL REPORT PDF

Senate Education Chairman Appel purchases Discovery stock week before company enters into state Techbook agreement

Since 2003, former and current members of the Louisiana House and Senate have used more than $710,000 of their personal campaign funds to purchase tickets to LSU athletic events. This despite the existence of several opinions issued by the State Board of Ethics specifically prohibiting the purchase of athletic tickets “for any personal use unrelated to a campaign or the holding of public office.” (Emphasis ours) http://ethics.la.gov/EthicsOpinion/DocView.aspx?id=7169&searchid=1e6d42e0-0081-4d47-b252-2473624ce865&dbid=0

LSU SPORTS PAYMENTS FROM CAMPAIGN FUNDS

So now we have legislators like State Sen. Mike Walsworth (R-West Monroe) criticizing taking higher education officials to task for suggesting that schools might close and TOPS may be ended because of a mere $970 million budgetary shortfall this fiscal year and a pending $2 billion budget hole for next fiscal year.

Walsworth, it should be noted, used $4,210 of his campaign funds in 2013 and 2014 on LSU athletic events.

But that pales in comparison to State Sen. Norbert Chabert (R-Houma) who went ballistic over a report that his alma mater Nicholls State University in Thibodaux might be forced to close temporarily. http://www.thenewsstar.com/story/news/2016/02/15/even-best-case-nicholls-close-temporarily/80403372/

“This is the first I’ve heard of it,” he said. “I think it’s unnecessary and a bad call. Are you telling me that the university in the fifth largest market in Louisiana that serves 6,300 students is going to close? This isn’t going to happen.”

Of course not, Norby. And Merrill Lynch, AIG, Lehman Brothers, Washington Mutual and a few hundred banks weren’t going to bite the dust starting back in 2008 either, were they? And shoot, Bernie Madoff was a man to be trusted with our investments, right? https://en.wikipedia.org/wiki/List_of_bank_failures_in_the_United_States_(2008%E2%80%93present)

While while we ponder the wisdom of Chabert’s assurances, it might be worth noting that since 2009, he spent a cool $35,750 on tickets to LSU athletic events. It seems it’s okay to plow OPM (other people’s money—and that’s what campaign funds really are) into athletics, but don’t let university come crying about the shortage of funding for academics or the deplorable conditions of university infrastructure.

It would also be timely to point out here that athletics are not the only expenditure items for legislators’ campaign funds. There are the expensive meals, the leasing of luxury automobiles, Saints and Pelicans tickets, payments of ethics fines for campaign violations (expressly prohibited but done with impunity), and in at least one case, one legislator paying his personal federal income taxes with campaign money. https://louisianavoice.com/2015/05/11/hidden-in-plain-sight-campaign-funds-provide-opulent-lifestyle-of-meals-game-tickets-and-travel-for-legislators/

But because the focus for the moment is on higher education, we will limit our examination of campaign expenditures to LSU sports.

Here are some of the more flagrant cases we found:

  • Senate President John Alario, one of those who signed off on Grover Norquist’s no-tax pledge, spent more than $19,000 on LSU tickets;
  • Rep. James Armes (D-Leesville): $11,500 since 2008;
  • Rep. John Berthelot (R-Gonzales): $19,280 since 2011;
  • Rep. Thomas Carmody (R-Shreveport): $21,660 since 2010;
  • Rep. Patrick Connick (R-Marrero): $24,540 since 2008;
  • Rep. Michael Danahay (D-Sulphur): $17,600 since 2008;
  • Former Rep. Noble Ellington (recently appointed as legislative director for Gov. Edwards): $46,500 since 2002);
  • Sen. Dale Erdy (R-Livingston): $24,000 since 2003;
  • Former legislator and former Alcohol and Tobacco Control Commissioner Troy Hebert: $13,700 since 2009);
  • Rep. Frank Hoffman (R-West Monroe): $22,700 since 2009;
  • Former House Speaker Chuck Kleckley (R-Lake Charles): $31,900 since 2008;
  • Rep. Bernard LeBas (D-Ville Platte): $18,400 since 2009;
  • Sen. Danny Martiny (R-Metairie): $13,800 since 2002;
  • Sen. Jonathan Perry (R-Kaplan): $21,000 since 2009;
  • Former Rep. Erich Ponti (R-Baton Rouge): $18,700;
  • Former Rep. Joel Robideaux (R-Lafayette): $23,600 since 2004;
  • Sen. Gary Smith (D-Norco): $33,800 since 2002;
  • Sen. Francis Thompson (D-Delhi): $15,100 since 2010;
  • Former Sen. Sherri Buffington (R-Shreveport): $23,800 since 2009.

Buffington, then Sherri Cheek, is the same legislator who, in January 2004 traveled to New Orleans to attend the NCAA national championship football game between LSU and Oklahoma but forgot his tickets. No problem. She simply called State Police and arranged for a Pony Express-type relay by state troopers from Shreveport to New Orleans to deliver the six tickets. When word of the special deliver leaked out, she expressed her regret (don’t they always feel just awful—after they’re caught?) and said she would repay State Police $448.50, based on her computation of 12 hours of trooper pay. http://www.freerepublic.com/focus/f-news/1060246/posts

So while certain members of the legislature grandstand over the current and projected budgetary issues, it is important to remember they are a large part of the problem.

And higher ed is by no means the only fiscal issues before the legislature during the current special session.

There are grave cuts being proposed for health care which will be covered in greater detail in future posts here.

But a quick overview shows drastic cuts to programs serving the elderly, those on dialysis, the developmentally disadvantaged, hospice, and, of course, the disastrous venture into privatizing state hospitals.

It’s going to be difficult for legislators to rail against those with real needs to help keep them alive or well. To do so would truly expose the hypocrisy of those who claim to represent their constituencies.

As we said in an earlier post, this is the one chance lawmakers have to get it right. Rhetoric will not save the day. Denial will not solve the problems. Continuing the same fiscally irresponsible practices will not plug the gaping hole in the state budget.

And this is not the time to be point fingers or scolding administrators.

The time is now and the place is here to come together and to do what must be done to solve the state’s multitude of problems.

Anything less and wholesale recalls should be initiated immediately as soon as this session is over.

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