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Regular readers of this site know our disdain for the undue influence of lobbyists and special interests over lawmakers to the exclusion of the very voters who elected those same lawmakers to represent them and their best interests.

Our opposition to political decisions made with priority given to campaign contributions over what is best for the state is well-known—and uncompromising. Money should have no place—repeat, no place—in political decisions.

Unfortunately, we know that is not the case. Politicians for the most part, are basically prostitutes for campaign funds and those who choose to remain chaste usually find themselves at a serious disadvantage come election time.

To that end, you can probably look for State Rep. Jay Morris (R-Monroe) to attract strong opposition when he comes up for re-election in 2019. And that opposition, whoever it might be, is likely to have a campaign well-lubricated by the Louisiana Association of Business and Industry (LABI), the Louisiana Chemical Association, and the oil and gas industry.

At the risk of belaboring the obvious, we have gone on record on numerous occasions as saying the voters are merely pawns to be moved about at will by big business in general and the banks, pharmaceutical companies, Wall Street and oil companies in particular. It is their money that inundates us with mind-numbing political ads that invade our living rooms every election year telling us why Candidate A is superior to Candidate B because B voted this way or that way and besides, good old Candidate A has always had the welfare of voters uppermost in mind.

The presence of that influence was never more clearly illustrated than in Tyler Bridges’ insightful story in Friday’s Baton Rouge Advocate. http://theadvocate.com/news/15225624-78/la-legislative-staffers-sort-out-changes-added-at-the-last-minute

In the very first paragraph of his story, Bridges wrote that a secret deal between Senate President John Alario (R-Westwego), House Speaker Taylor Barras (R-New Iberia) and lobbyists for LABI and the Louisiana Chemical Association.

We won’t bother to re-hash the details of that meeting and the agreement finally reached just before the closing minutes of the recent special session. You can read the details in the link to the Bridges story that we provided above.

But suffice it to say had it not been for Morris digging his heels in and threatening to kill his own bill when he learned of a manufacturing tax break that had been added to his bill, HB 61 that aimed at eliminating exemptions and exclusions on numerous sales tax breaks. Though a Republican, Morris feels that big business isn’t paying its fair share of taxes.

“I was not aware of the deal,” Bridges quoted Morris as saying. “I was not invited.”

Neither, apparently, were any spokespersons for consumers, organized labor, teachers, or the citizens of Louisiana.

Oh, but you can bet LABI President Steve Waguespack was invited to a meeting in Alario’s office earlier in the day, as was Louisiana Chemical Association chief lobbyist Greg Bowser.

Given that, we would like to ask Sen. Alario and Rep Barras why no one representing the people were invited to that little conclave. And don’t try to tell us that the Senate President and House Speaker were representing the people. You were not. You were representing the vested interests of the chemical industry and big business. Period.

Sen. Alario, Rep. Barras: the people of Louisiana are far more deserving of a place at the table in some furtive backroom meeting than LABI and the chemical association.

Either all factions are invited in or no one is. The playing field should be level.

By not excluding lobbyists or by not inviting those on whose shoulders are placed the greatest burden, the ones who placed you in office, you have not just failed at your job; you have failed miserably.

Our late friend C.B. Forgotston would have said of the meeting which produced that secret deal: “You can’t make this stuff up.”

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On Feb. 15, an arrest warrant was issued for a north Louisiana employee of the Louisiana Department of Children and Family Services (DCFS) following an investigation of more than two months by the Office of Inspector General.

Kimberly D. Lee, 49, of Calhoun in Ouachita Parish, subsequently surrendered to authorities and was subjected to the indignity of being booked into East Baton Rouge Parish Prison on Feb. 17 after being accused of filing false reports about mandatory monthly in-home visits with children in foster care.

As is often the case, however, there is much more to this story.

A month earlier, on Jan. 10, LouisianaVoice received a confidential email from a retired DCFS supervisor who revealed an alarming trend in her former agency:

“I served in most programs within the agency, foster care, investigations, and adoptions,” she wrote. “Over my career I witnessed the eight years of (Bobby) Jindal’s ‘improvements.’

“Those ‘improvements’ endanger children’s lives daily. The blight is spread from the Secretary to the lowliest clerical worker in the agency. People are overworked and underpaid but it’s not just that. People are so distraught from the unrelenting stress that children are in danger. Add to that the inexperience of most front line workers and their supervisors’ inability to properly train new staff.”

She then dropped a bombshell that should serve as a wake-up call to everyone who cares or pretends to care about the welfare of children—from Gov. John Bel Edwards down to the most obscure freshman legislator:

“In the Shreveport Region, the regional administrator (recently) told workers that they may make ‘drive-by’ visits to foster homes, which means talking to the foster parents in their driveway. Policy says that workers will see both the child and the foster parent in the home, interviewing each separately (emphasis added). A lot of abuse goes on in foster homes. Some foster families are truly doing the best they can but they need counseling and guidance from their workers. The regional administrator’s answer to that one? Have the foster parent call their home development worker—another person who can’t get her job done now.”

She wrote that she had heard of two separate incidents “where a child new to foster care was taken to a foster home and left without paperwork, without contact information for the person in charge of the case and without knowing even the child’s name.”

Moreover, she said, vehicles used in the Shreveport Region “are old, run-down, and repairs are not allowed. The last time new tires were bought was in 2014. When one (of the vehicles) breaks down, they just tow it away. No replacement is ordered.”

Could those factors have pushed Lee to fudge on her reports? Did the actions attributed to her constitute payroll fraud or did budgetary cuts force her into cutting corners in order to keep up with an ever-increasing caseload? Lee says yes to the latter, that she was told by supervisors to get things done, “no matter what.” Child welfare experts said her actions and arrest shone a needed light on problems at DCFS: low morale, high turnover, fewer workers handing greater numbers of caseloads, and increasing numbers of children entering foster care.

http://theadvocate.com/news/14909284-31/louisianas-child-protection-system-understaffed-and-overburdened-after-years-of-cuts-child-advocates

To find our own answers, LouisianaVoice turned to a document published on Jan. 5 of this year by the Child Welfare Policy and Practice Group of Montgomery, Alabama.

The 77-page report, entitled A Review of Child Welfare, the Louisiana Department of Children and Family Services, points to:

  • A growing turnover rate for DCFS over the past three years from 19.32 percent in calendar year 2012 to 24.26 percent in 2014;
  • A 33 percent reduction in the number of agency employees to respond to abuse reports;
  • A 27 percent cut in funding since fiscal 2009, Bobby Jindal’s first year in office;
  • An increase in the number of foster homes of 5 percent;
  • An increase of 120.5 percent in the number of valid substance exposed newborns, from 557 to 1,330;
  • A trend beginning in 2011 that shows 4,077 children entered foster care but only 3,767 exited in 2015;
  • A 19 percent decrease in the number of child welfare staff positions filled statewide from 1,389 in 2009 to 1,125 in 2015.
  • Of the 764 caseworkers, 291, or 38 percent had two years’ experience or less and 444 (58 percent) had five years or less experience.

Moreover, figures provided by the Department of Civil Service showed that of the agency’s 3,400 employees, 44.5 percent made less than $40,000 a year and 19 percent earned less than $30,000.

In 2014 (the latest year for which figures are available), the median income for Louisiana for a single-person household was $42,406, fourth-lowest in the nation, as compared to the national single-person median income of $53,657.

http://www.advisorperspectives.com/dshort/updates/Household-Incomes-by-State.php

“The stresses within the system are at risk of causing poorer outcomes for some children and families,” the report says in its executive summary. “…Recent falling outcome trends in some of the areas that have been an agency strength in the past are early warnings of future challengers.”

Despite years of budgetary cuts under the Jindal administration, Louisiana has maintained “a high level of performance in achieving permanency for children in past years and currently is ranked first among states in adoption performance,” the report said.

The budget cuts, however, “have negatively affected the work force, service providers, organizational capacity and increasingly risk significantly affecting child and family outcomes” which has produced a front-line workforce environment “constrained by high caseload, much of which is caused by high turnover and increasing administrative duties and barriers that compromise time spent with children and families.”

And it is that threat to “compromise time spent with children and families” that brings us back to the case of Kimberly Lee and to the email LouisianaVoice received from the retired DCFS supervisor who cited the directive for caseworkers to make “drive-by” visits to foster homes, leaving children with foster homes with no paperwork, contact information or without even knowing the children’s names, and of the state vehicles in disrepair.

It’s small wonder then, in a story about how Jindal wrecked the Louisiana economy, reporter Alan Pyke quoted DCFS Secretary Marketa Garner-Walters as telling the Washington Post if lawmakers can’t resolve the current budget crisis, many Louisiana state agencies will see budget cuts of 60 percent. http://thinkprogress.org/economy/2016/03/07/3757416/jindal-louisiana-budget-crisis/

As ample illustration of Bobby Jindal’s commitment to social programs for the poor and sick, remember he yanked $4.5 million from the developmentally disadvantaged in 2014 and gave it to a Indy-type racetrack in Jefferson Parish run by a member of the Chouest family, one of the richest families in Louisiana—but a generous donor to Jindal’s gubernatorial campaigns and a $1 million contributor to his super PAC for his silly presidential run.

Well, thanks to the havoc wreaked by Jindal and his Commissioner of Administration Kristy Nichols, the legislature did find it necessary to pass the Nichols’ penny tax (not original with us but the contribution of one of our readers who requested anonymity) to help offset the $900 million-plus deficit facing the state just through the end of the current fiscal year which ends on June 30.

Were legislators successful? Not if you listen to Tyler Bridges, one of the more knowledgeable reporters on the Baton Rouge Advocate staff. “Legislators were neither willing to cut spending enough, nor raise taxes enough nor eliminate the long list of tax breaks that favor one politically connected business or industry over another,” he wrote in Sunday’s Advocate (emphasis added). http://theadvocate.com/news/15167974-77/a-louisiana-legislature-that-ducked-tough-budget-decisions-during-its-special-meeting-convenes-again

As is all too typical, most of the real “legislation” was done in the flurry of activity leading up the final hectic minutes of the special session, leaving even legislators to question what they had accomplished. In military parlance, it would be called a cluster—.

But that should be understandable. After all, 43, or fully 30 percent of the current crop of legislators, had to work their legislative duties around their busy schedules that called upon them to attend no fewer than 50 campaign fundraisers (that’s right, some like Neil Riser, Katrina Jackson, and Patrick Connick had more than one), courtesy of the Louisiana Oil and Gas Association, the Beer Industry League, CenturyLink and a few well-placed lobbyists. http://www.nola.com/politics/index.ssf/2016/03/louisiana_special_session_fund.html

It is, after all, what many of them are best at. (Seven of those were held at the once-exclusive Camelot Club on the top floor of the Chase Bank South Tower. We say “once-exclusive” because last week the Camelot announced that it was closing its doors after 49 years. Restrictions on lobbyists’ expenditures on lunches for legislators was given as one cause for the drop in club membership from 900 to 400. Not mentioned was the fact that Ruth’s Chris and Sullivan’s steak restaurants in Baton Rouge have become favorite hangouts for legislators and lobbyists during legislative sessions. One waiter told LouisianaVoice during the 2015 session that one could almost find a quorum of either chamber on any given night during the session—accompanied, of course, by lobbyists who only wanted good government.) https://www.businessreport.com/article/camelot-club-closing-afternoon-can-no-longer-viable-club-owner-says

LEGISLATORS’ FUNDRAISERS

Bridges accurately called the new taxes that will expire in 2018 “the type of short-term fix” favored by Jindal and the previous legislature “that they had vowed not to repeat.”

Can we get an Amen?

In the meantime, he observed that Gov. John Bel Edwards and Commissioner of Administration Jay Dardenne, because the legislature still left a $50 million hole in the current budget, will have to decide which state programs will be cut—again.

Emphasizing the risks to children, Garner-Walters told legislators in a committee hearing during the just-completed special session that state DCFS staff numbers 3,400, down a third from the 5,100 it had in 2008. “You can’t just not investigate child abuse,” she said.

Former Baton Rouge Juvenile Court Judge Kathleen Richey, now heading up Louisiana CASA (Court Appointed Special Advocate), a child advocacy non-profit, has expressed her concern over the budgetary cuts that make DCFS caseworkers’ jobs so much more difficult.

“Our political leaders need to understand that while infrastructure represents a physical investment in our future, our children represent an intellectual investment in our future,” she said. “We have to protect innocent children who have no one else to stand up for them.”

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Thursday (Feb. 25) was an unusually big day in politics, even by Louisiana standards.

The big news in Baton Rouge on Thursday was House passage of Gov. John Bel Edwards’ one-cent sales tax (minus the assessment on manufacturing) but the action was quickly overshadowed by a credit rating downgrade by Moody’s. http://theadvocate.com/news/14993547-79/moodys-downgrades-louisianas-credit-rating

The state also received a “negative outlook” from Moody’s, meaning the state could be downgraded again.

Coupled with the sales passage, which must now go to the Senate for a vote, was additional cuts of $100 million in state spending and the taking of $128 million from the rainy day fund. With the $60 million already cut by the Edwards administration, Thursday’s action will make up about $700 million of the $900 million needed by the end of the current fiscal year on June 30.

The downgrade was the first for the state since Hurricane Katrina and the lower rating means when borrowing money, the state will have to pay higher interest rates.

And just to add a touch of spice to an already politically volatile state, Public Service Commissioner Foster Campbell announced on the Jim Engster Show on Thursday that he will be a candidate for the U.S. Senate seat being vacated by Sen. David Vitter. http://www.jimengster.com/

Campbell, an outspoken PSC member and a former state senator, is the second Democrat to enter the already crowded field of senatorial hopefuls. So far, U.S. Reps. Charles Boustany, Jr. of the state’s 3rd Congressional District and John Fleming of the 4th District, State Treasurer John Kennedy and U.S. Air Force veteran Rob Maness, all Republicans, a second Democrat, New Orleans attorney Caroline Fayard, and, of course, the former director of Louisiana Alcohol and Tobacco Control, the inimitable Troy Hebert, an Independent.

A debate between all the candidates could be reminiscent of the early debates between the 17 original candidates for the Republican president nomination—but without the charm, sparkle and depth of Ted Cruz and Donald Trump, a lot less fun.

Maness was an unsuccessful candidate for the U.S. Senate seat won by Bill Cassidy in 2014 and Fayard was defeated in a special election for lieutenant governor in 2010 by Jay Dardenne.

Campbell, something of a throwback to the populist candidates of another era, is outspoken on issues, particularly with utility companies and the oil and gas industry, and while in the State Senate, he crossed party lines to lend strong support to then-Gov. Dave Treen’s proposed Coastal Wetlands Environmental Levy (CWEL), a $450 million tax on petroleum and natural gas. Campbell today says had CWEL passed, the state would not be in the financial bind in which it now finds itself. But strong opposition by LABI and the oil and gas lobby defeated the proposal.

In a related but relative minor matter, LouisianaVoice received one of those “independent political polls” that was so obviously commissioned by Rep. Fleming that it may as well have been conducted by the good congressman himself.

The questions were prefaced by glowing stories of Fleming’s humble background and how he pulled himself by the bootstraps to not only become a doctor but to establish “numerous businesses,” one of which just happened to be a payday loan company that preys on low-income citizens, hooking them for exorbitant interest rates.

At the same time, the pollster, a woman, set up other questions about the other candidates with disparaging background stories on Boustany, Fayard and Kennedy (Maness was omitted, possibly in deference to his military service) that stopped just short of labeling them as subversives. Also omitted from the verbal flogging was Campbell, obviously only because he was not a declared candidate at the time Fleming wrote the questions for the poll.

Louisiana’s credit rating was not changed by Fitch and Standard & Poor’s, the other two major financial rating agencies.

But Moody’s move, dropping the state from Aa2 to Aa3 leaves Louisiana with better credit ratings than just two other states, New Jersey and Illinois. The downgrade will be applied to the state’s general obligation bonds and gas and fuel tax bonds. That means in turn that when the state issues bonds to finance construction projects such as roads and public buildings, it will have to pay higher interest rates on the borrowed money.

The move came as a surprise as most observers, including Kennedy, though Moody’s would wait until the Legislature completed the current special session, which is scheduled to end March 9.

Kennedy used the downgrade to take shots at both Bobby Jindal and Gov. Edwards. “You can’t spend more taxpayer money than you take in for seven years in a row and not expect a downgrade to your credit rating,” Kennedy said. “You also can’t make public statements about suspending TOPS, ending LSU football, closing Nicholls State University and closing five prisons without scaring the daylights out of the credit rating agencies that grade our debt and the institutional investors that buy our debt. What we tell our children is true: Acts have consequences.” http://theadvocate.com/news/14993547-79/moodys-downgrades-louisianas-credit-rating#comments

Edwards, meanwhile, blamed the downgrade on the seven years of patchwork budgeting by the Jindal administration, calling it “a disappointing development, particularly since we believed that Moody’s would wait until the conclusion of the special session to make any decision on our rating. Unfortunately, the downgrade confirms what we’ve been saying about the structural imbalance of our budget. The overuse and abuses of one-time money and fund sweeps by the Jindal Administration were a major factor in this decision.”

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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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By Stephen Winham

Every day we hear the same thing: “If we could just get rid of those dedications, we could fix the budget and not have to always hit higher education and health care so hard when times are tough. There are plenty of things we could cut without hurting anybody or anything.”

It sounds so easy. You hear, in very broad terms, how the budget has grown and how out-of-bounds spending has gotten. Our current budget totals about $25 billion, of which $10 billion is federal. I will focus on state funding in the official revenue forecast – about $10.4 Billion in the current year, with strongest emphasis on the $7.9 Billion in state general fund spending we can most readily control. The official forecast numbers for next year are $10.4 billion and $8.2 billion, respectively.

We hear about $4.3 billion in dedicated funds ($3.5 billion in the currently-proposed FY 2016-2017 budget) that could be eliminated and go a long way toward fixing our budget problems. What we rarely hear about is the additional $4 billion in the state general fund that is allocated and/or protected by the State Constitution.

For starters, almost a half billion dollars comes directly off the top of the general fund, but IS NOT APPROPRIATED. That’s right, you don’t see or hear much about this money because it is not appropriated – rather, it is a direct draw on the state’s general fund.

If you go to page 177 of the FY 2016-2017 Executive Budget, you will find Schedule 22, Non-Appropriated Requirements. This schedule allocates $496.5 million from the state general fund in the treasury, pursuant to the State Constitution, for the following:

$404.8 M – General Obligation Bond Debt Service

[IMPORTANT DIGRESSION: G. O. Debt service is increasing by over $211 million (109%) next year due to one-time savings utilized in the current year from defeasance of debt – In other words, this is part of the one-time “fix” in the current budget that has to be covered next year.]

$90.0 M – General Revenue Sharing – goes to local governments as a partial offset for local property tax revenue lost due to the State Homestead Exemption

$ 1.7 M – The Interim Emergency Board – provides emergency funds during the budget year

Now I ask you, which of these would you be willing to vote out of existence? Eliminating or changing them would require constitutional amendments and a vote of the people.

The one of these three I would not cut, for sure, is our $405 million in debt service. Defaulting on our debt would cause immediate loss of a marketable bond rating and send a message to the rest of the country that we are truly bankrupt.

Cutting the other $91.7 million in non-appropriated items would have very serious implications, particularly for local governments. Even if you think local governments shouldn’t get the revenue sharing, how do you think they would make it up, if they didn’t?

In addition to non-appropriated allocations, the State Constitution also mandates general fund spending for a number of appropriations. The state’s Minimum Foundation Program for public elementary and secondary education is required by the constitution and has a $3.4 Billion state general fund appropriation. You might be inclined to cut administration and other programs in the Department of Education, but are you willing to vote for a constitutional amendment eliminating basic state support for our public schools, or even allowing for substantially reducing it? You may not directly use public education, but you have to agree we absolutely have to have it and it should be funded at no less than its current level. The education provided by our public schools is vital and is finally improving. We can’t afford to lose the ground we’ve gained.

So, between just the General Obligation Bond debt service and the MFP requirements for next year, we have $3.8 Billion of General Fund (46% of the total) expenses it would be simply stupid to cut.

In addition to the MFP, another $600 million of our general fund expenditures are currently required by the State Constitution. State supplemental pay for local law enforcement alone is $124 million of this. Also included are salaries of statewide elected officials and the costs of elections. You might not be happy with the salaries of your statewide elected officials, but we have to pay them and I don’t think you could possibly support not having the money to hold elections. If you think locals ought to fully fund the salaries of law enforcement personnel, where do you think they might get the money to do so?

[Digressing again and focusing on local government funding for a moment, what if we decided to cut it all? Except for capital outlay projects, we indirectly fund recurring local services, so we would, in essence, be shoving our problem down to the local level – and we all live somewhere.  If local governments were unable to raise local taxes to support the services, they would be eliminated or significantly degraded.  If they were able to raise local taxes to support them, how would the taxpayers see a difference?]

What other general fund expenditures, currently considered mandated should we consider cutting? How about the $130 million in appropriated debt service (in addition to G. O. Debt)? How about the $400 million plus it costs to incarcerate adult inmates in our state prisons? Or, the $157 million we pay local sheriffs to house state inmates? The $27 million we pay in District Attorney and assistants’ salaries? How much of the $73 million legislative and $160 million judicial general fund appropriations are we and the legislature willing to cut? How much of the $848 million in general fund we consider sacrosanct because of federal mandates should we cut and what will happen if we do? How much can we realistically cut from our Medicaid program and still attempt to meet the health care needs of our citizens?

Finally, how about the elephant hiding behind the sofa, our annual payments via the state payroll system toward the Unfunded Accrued Liabilities of our state retirement systems? I’m no actuary, but using the actuarial reports generated by the Legislative Auditor, I estimate annual payments toward this liability, in state funds, is no less than $600 million and growing rapidly because of the way the amortization is structured. The State Constitution requires this debt to be liquidated by 2029.

We often hear that 67% of our general fund budget is non-discretionary. Let’s pretend we don’t have to do a lot of these things and, just for the sake of argument, say only 55% should not be touched. That still leaves only $3.7 billion of state general fund on the table subject to cut and we certainly aren’t going to cut over half of that to solve a projected $2 Billion problem next year. And, by the way, remember that any of the current year deficit not liquidated this fiscal year will, by law, have to be added to that problem.

Take a look at John Bel Edwards’ first Executive Budget. It is balanced to the official revenue forecast of general fund revenue. Look at what is cut and where. Look closely.

http://www.doa.la.gov/opb/pub/FY17/FY17_Executive_Budget.pdf

For more details, look at the supporting document:

http://www.doa.la.gov/Pages/opb/pub/FY17/FY17ExecBudget.aspx

Now, finally, let’s get back to those dedicated funds. The Legislative Auditor has just released a comprehensive document detailing these dedications. He points out there were 370 dedicated funds in Fiscal Year 2013-2014 (the last year for which complete documentation is available), 344 statutory and 26 constitutional. Let’s see which ones of these we want to eliminate.

How about the $1.4 Billion Transportation Trust Fund? Our roads are in great shape, right? Plus, we blow part of this on public safety rather than roads and public safety certainly isn’t important, is it?

How about the $159 million in Lottery proceeds? Surely we can find a better use than education for that money. The $184 million in the Medicaid Trust Fund for the Elderly? We only have to change a statute to cut the old folks off. The Oil Spill Contingency Fund at $52.7 million? We never have oil spills, do we? And, why should we share $39 million of our severance taxes with the parishes where the minerals are severed? TOPS is draining us dry, so let’s free up that money and spend it elsewhere.

I’m being facetious, but, seriously, don’t you think there is a constituency for every one of those 370 dedications (except maybe the 21 that have no revenue or expenditures)? How many times have dedications been studied and how many have been eliminated so far? The Joint Legislative Committee on the Budget has reviewed 25% of these dedications every other year since 2009, but has made no recommendations for modifying or eliminating any of them.

Whatever we do with dedicated funds can’t and shouldn’t be done overnight. Many of them support local governments, but the Transportation Trust Fund is the largest of them all and, in addition to the Department of Transportation, other state departments and agencies derive substantial operating funds from dedications, most notably the Public Service Commission, the departments of Environmental Quality, Wildlife and Fisheries, Economic Development, Agriculture and Forestry, Natural Resources and Public Safety Services.

Shouldn’t we look at each dedicated fund in depth to determine it source, its purpose, and the extent to which collections exceed needs? Isn’t this just what the Joint Legislative Committee on the Budget should have done? Wouldn’t it have made a lot more sense to examine the historical inflows and outflows of each of these dedicated funds before creating a $442 million Overcollections Fund from their balances in FY 2014? This was yet another statutory dedication and a big reason statutory dedications spending rose so much. Worse, we then used the Overcollections Fund to pay for recurring expenses elsewhere – a significant part of why we are in our current mess.

Obviously, some collections in excess of needs should revert to the general fund. Others, justifiably, should not. In many cases, these funds are created from fees people pay for which they expect certain services. Some dedications to locals are used to service bonds.

Should we continue to look at potential modifications or eliminations of statutory dedication as a partial solution to our problems? Absolutely, but given our history and the realities of today, should we place an inordinate amount of blame for our current problems on them, or expect a miraculous cure to emerge from further study? I frankly don’t see why we would.

I urge you to look at the Legislative Auditor’s report here:

http://app.lla.state.la.us/PublicReports.nsf/0/13D9277344A19B9086257F560076E83A/$FILE/0000CAA1.pdf

It will give you a much better understanding of the dedications and is formatted in such a way as to drill down from a relatively high level to a very detailed level, so you can stop where you’d like and still gain valuable insight.

Let’s face it, as Gov. Edwards has said, if it is so easy to cut the budget, why has it not been cut to size long before now? This is particularly true in light of the fact we had a governor who travelled the United States for the past 8 years professing to be a budget cutter extraordinaire. If he actually cut expenditures to meet revenues and wrought such an economic miracle why do we find ourselves so out of whack? No, Virginia, it’s not just oil prices.

State Treasurer John Kennedy and others point to things the administration should do to eliminate fraud, abuse, and waste in state government. Who can disagree? To the extent these occur, we are all losers – the biggest are the intended beneficiaries of the services.

It is important that citizens believe their tax dollars and fees are being spent as wisely as possible or, at the minimum, that somebody is consistently and comprehensively trying to ensure this is the case. In my opinion, the accountability for this lies with the administration, not the legislative auditor or anybody else.

The administration has not yet provided specifics or even examples of what it plans to do about specific contracts that make no sense, bureaucratic structures that may be bloated, and more effective and efficient delivery of health care services. Gov. Edwards has said he will do something about these things, but he is yet to provide even anecdotal evidence like Kennedy and others to support his claim.

The executive branch needs to hold its appointed officials to the highest standards and demand they investigate dedications and everything else in the departments they are paid well to manage toward doing everything they possibly can to make our government as efficient and responsive as it can be. The public needs to know this is being done. They should not have to see an increasing succession of negative findings by the Legislative Auditor or, worse, disturbing reports of mismanagement and abuse in the media and elsewhere that go largely unanswered.

But, all that said, can these efforts bear fruit overnight? Can they come close to eliminating the gap? Look deeper than the rhetoric and you have to answer “no” and “no.”

One more link is below – an excellent presentation by the Louisiana House Fiscal Division done just a month ago. Check it out:

http://house.louisiana.gov/housefiscal/0112_16_OS_FiscalBriefing2.pdf

There is a lot of really good information out there from a variety of sources inside and outside government. Our decision-makers need to use it.

 

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