“I want to hope that no threats were made…..I also want to hope there’s a Santa Claus.”
—Rep. Ernest D. Wooton (I-Belle Chasse), on the failure of the House to override Gov. Bobby Jindal’s veto of the renewal of a 4-cent cigarette tax.
Posted in Governor's Office, House, Senate, Legislature, Legislators, Notable Quotables, Taxes, Transparency, Veto on June 16, 2011| 4 Comments »
“I want to hope that no threats were made…..I also want to hope there’s a Santa Claus.”
—Rep. Ernest D. Wooton (I-Belle Chasse), on the failure of the House to override Gov. Bobby Jindal’s veto of the renewal of a 4-cent cigarette tax.
Posted in Civil Service, Education, Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, ORM, Office of Risk Management, Prison, Privatization, Taxes, Transparency on June 12, 2011| 9 Comments »
At the risk of being accused of being a one-trick pony because of all or our posts about attempts to privatize the Office of Group Benefits (OGB), we thought we would offer a quick overview of Gov. Bobby Jindal’s policies, of which OGB is but one facet.
Besides OGB, Jindal has already sold off one state agency, the Office of Risk Management. That privatization left many ORM employees years short of retirement age, thus jeopardizing not only their livelihoods, but medical benefits as well.
The sale agreement stipulated that the buyer was required to hire ORM employees for a “minimum” of 12 months. Of course the ORM director was sure to remind his employees who had just had their job security unceremoniously yanked away that he still had his job and, what’s more, would be eligible for retirement in 2012. That must have given everyone there a warm fuzzy.
Jindal tried unsuccessfully to sell several state prisons but was resisted by the legislature. But odds are he will be back next year with another attempt.
A campaign brochure published by candidate Jindal in 2007 touted his love for state employees and his dedication to hard-working civil servants of which, he reminded us, he was one. Maybe so, if you consider Secretary of the Department of Health and Hospitals and head of the University of Louisiana System as fitting the description of civil servant.
Nevertheless, in 2010, he tried unsuccessfully to push through legislation to abolish the Department of Civil Service and to dissolve the Civil Service Board, the only protection, such as it is, available to civil service employees.
He was successful in freezing classified (civil service) pay that same year and extended that freeze in 2011. The reasoning was the opposition to the myth of something referred to as “automatic” pay increases. No one bothered to mention that once an employee maxes out at a particular pay level, there are no more raises unless he or she is promoted. Nothing automatic there.
Many of those civil service workers have college-age children and didn’t help when Jindal endorsed an $84 million college tuition increase. Fortunately for them—and for the rest of parents with college kids—that measure died in the legislature.
This year, Jindal, who has taken the ridiculously entrenched position of no new taxes (not even a routine renewal of cigarette taxes, already one of the lowest rates in the nation), nevertheless tried to push a bill down the throats of those civil servants he so loves that would require that they pony up an additional 3 percent of their frozen paychecks to their retirement contributions.
That idea might actually have had some merit if the extra 3 percent would have been dedicated to paying down the state retirement system’s unfunded liability, but it wasn’t. Instead, the money would have gone directly into the State General Fund to help Jindal look like a financial wizard in using the money to close the $1.6 billion gap in the state budget, a situation civil service employees had no part in creating.
But keep in mind the proposals to increase tuition and civil service employees’ retirement contributions weren’t taxes: they were simply fee increases. But when you’re writing the check, the distinction could be difficult to make.
Bear in mind, too, that Jindal did all this while advocating more and more corporate tax incentives (read: exemptions) for well-heeled campaign contributors.
The governor also laments the loss of our best and brightest college and university graduates to other states but when it comes to his own appointees, he doesn’t seem quite as committed to the concept of hiring Louisiana first.
His first Recovery School District Superintendent was Paul Vallas. Vallas came here from Chicago by way of Philadelphia. His replacement, John White, is from New York. [And who could think it was coincidence that two weeks after White was brought in to replace the departing Vallas as head of RSD, State Superintendent of Education Paul Pastorek resigned and Jindal immediately endorsed White for Pastorek’s job? Who could possibly believe the entire sequence of events was not orchestrated from Jindal’s fourth-floor State Capitol office?]
But we digress. Jindal’s Secretary of the Department of Health and Hospitals (DHH) is Bruce Greenstein of Washington State by way of Maryland.
His Deputy Commissioner of Administration is Mark Brady of New Hampshire and his own press secretary is Kyle Plotkin of New Jersey.
Certainly, there must have been a sufficient pool of Louisiana talent from which to hire for these positions.
But that should come as no surprise, considering his campaign expenses. Of 670 campaign expenditures in 2008, only 219 were paid to Louisiana companies. It seems the governor prefers companies from Virginia, Texas, Maryland, and elsewhere.
And contracts issued to out of state firms throughout the administration number in the hundreds, many of which were issued to campaign contributors. But that’s another story for another day later this week. We promise.
While boasting at every opportunity of his dedication to transparency, openness, and accountability, he saw to it that ethics legislation passed early in his administration would exempt the governor’s office.
When a legislator introduced a bill that would have forced elected officials to publicly report the names of campaign contributors whom officials subsequently hire or appoint, it appeared to have Jindal’s endorsement.
Key administration officials worked the legislator over a period of five months and helped draft the language of the bill, which easily passed both houses.
Jindal promptly vetoed the bill.
Could that have been because Jindal appointed more than 200 contributors to some of the state’s most influential boards and commissions? Those appointees contributed more than $784,000 to his campaign in 2007 and 2008.
While no governor could be expected to appoint political opponents to these positions, the campaign contributions do tend to raise eyebrows. “Appointments to boards and commissions are based strictly on an individual’s experience, recommendations, and suitability for the position,” sniffed Jersey Boy Plotkin.
Jindal’s “transparency and accountability” mantra takes on something of a hollow ring when official actions are examined more closely.
When DHH selected a winner for a 10-year, $34 million-per-year technology contract, DHH Secretary Greenstein did everything possible to resist divulging the name of that contractor to the Senate and Governmental Affairs Committee that was considering his confirmation as secretary of the agency. Only after 90 minutes of back and forth bantering, did Greenstein finally admit that the winner was CNSI of Gaithersburg, Maryland, a firm for whom he once worked and one that outsources much of its work to its Technology Development Center—in India.
During his repeated refusals to name the contract, he was asked by senators who his boss was, to whom does he answer.
His answer: “The governor.”
Jindal’s Secretary of the Louisiana Office of Economic Development flatly refused to provide documents to the Legislative Auditor’s office during a routine state audit. This, even though state law clearly directs all agencies to provide all requested materials to state auditors so as not to restrict them in their duties.
Commissioner of Administration Paul Rainwater also attempted to deny auditors access to a report by Chaffe & Associates of New Orleans on the financial assets of OGB.
Rainwater went even further in first approving release of the report to the Senate and Governmental Affairs Committee member Karen Peterson and then doing an about-face and to instruct OGB CEO Scott Kipper to not release the report to anyone.
Kipper subsequently resigned, effective, June 24, which will give him tenure of a little more than two months after replacing former CEO Tommy Teague, who was fired on April 15.
Rainwater has repeatedly made the claim of “deliberative process” in denying access to the report. The deliberative process term emanates from that same State Capitol fourth floor.
Only one question needs to be asked about the Chaffe report that should put everything in perspective as regards Jindal’s efforts to privatize OGB:
If Chaffe & Associates said in that report things that the governor wanted to hear, that supported his unrelenting efforts to sell an agency with a $500 million surplus, is it even remotely possible that the administration would be attempting to withhold the document?
Put another way, if the report supported Jindal’s desire to sell OGB, what possible reason would he have to keep the report secret?
Put still another way, who among you believes Gov. Bobby Jindal has the best interest of state employees at heart? Indeed, who even believes he has the best interest of Louisiana at heart?
Who believes that all those out-of-state trips to support congressional and gubernatorial candidates in Florida, Missouri, Wisconsin, and other states were for the benefit of Louisiana? Why would he support a Florida gubernatorial candidate who headed a company hit with the largest Medicare fraud fine in history?
That candidate, Rick Scott, incidentally, won election.
Who can stretch credulity to the point of believing his frequent trips to other states to promote his book was for the benefit of Louisiana and its citizens?
Who can believe all those out-of-state campaign fundraising trips were for the overall benefit of Louisiana?
All these, the campaigning, the book tours, the fundraisers, occurred during a time of unprecedented financial crisis at home. And security details and aides who travel with him must be fed and housed on those trips—all on the state dime.
If you are a Louisiana public employee or simply a Louisiana citizen and you don’t stand up right now and defend this state from the encroachments and abuses of this governor, then you are part of the problem.
It should be clear by now that Gov. Jindal is oblivious to the plight of this state’s citizenry. This is your future. This is your government. This is your state. It does not belong to the Jindals, the Pastoreks, the Rainwaters.
It certainly does not belong to those who have been brought in from other states like Mark Brady, Bruce Greenstein, Kyle Plotkin, and Goldman Sachs.
Our governor has no right to operate behind a curtain of secrecy, to push his agenda with no input from the governed. He is answerable to the Legislature and he is certainly answerable to the citizens of this state.
His first responsibility is not to the big dollar contributors.
That distinction rightly belongs to you.
Posted in Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Public Records, Retirement, Taxes, Transparency on May 31, 2011| Leave a Comment »
BATON ROUGE (CNS)—When is a tax not a tax?
When is the old bait and switch scam not a scam?
When is a sale not a sale?
When are public records not public?
The answer to all of the above: when Gov. Bobby Jindal or Commissioner of Administration Paul Rainwater says they’re not.
Got it?
Good. Discussion over. Let’s go home.
Hold up a minute, Guv, it ain’t quite that cut and dried. Sure you can rattle off statistics that tell us just how good your medicine is going to make us feel—after the nausea it induces passes. We’ve heard you do it in that non-stop staccato delivery of yours. But you know what they say: there’re lies, there’re damned lies, and there’re statistics.
Your statistics, figures, and projections amount to little more than what we called a blivet back in the day. We know you’re Ivy League-educated, so it’s pretty much a sure bet you don’t know what a blivet is, so we’ll tell you: a blivet is five pounds of excrement in a one-pound bag.
Let’s take the questions one at a time and examine them more closely.
When is a tax not a tax?
Jindal has repeated his “no tax” mantra so often that we hear it in our sleep. He killed the Stelly Plan and he has vowed to kill a renewal of the state’s tobacco tax, currently the second-lowest rate in the nation.
Yet he supports HB 479 that would require some 52,000 state employees to increase their contribution to the state pension system by an additional 3 percent, from 8 percent to 11 percent, beginning July 1.
It’s not a tax, it’s a fee increase. Any fool should be able to see that.
When is bait and switch not a scam?
Notwithstanding the fact that it wasn’t state employees who created the current fiscal crisis, that might make sense for employees to chip in a little more—if raises weren’t frozen and the money was to be used to put the retirement system on sounder financial footing—but it isn’t.
The 3 percent increase would mean employees would be paying an additional $70 million per year in premiums, which will result in roughly $25 million of state general fund savings. That $25 million, however, would not mean additional benefits or in a paydown of the pension’s unfunded liability. Instead, it would be used toward reducing the current $1.6 billion state budget shortfall. A classic example of robbing Peter to pay Paul.
That’s the same shell game that was used when $393.5 million was subtracted from the $3.3 billion Minimum Foundation Program for public education before the combined $393.5 million in 8(g) funds, state lottery proceeds and EduJobs funding were added back in. The net gain to education? Zero.
Both look an awful lot like looting and pillaging to us, but they’re not. They’re sound fiscal policy because Jindal, in amongst all his statistics, says so.
When is a sale not a sale?
Apparently when it involves the Office of Group Benefits (OGB).
Rainwater has testified before the Senate Retirement Committee that he does, doesn’t, does, doesn’t want to sell OGB, that he will, won’t will, won’t put the agency up for public auction.
Meanwhile, despite hostile hearings by the Senate Retirement Committee—three of which Rainwater simply boycotted—and ample evidence that OGB is a well-run agency that state employees would rather just leave alone, Jindal and Rainwater blithely plunge ahead hell-bent with their plans to privatize the agency despite a total lack of solid evidence that said privatization would result in any savings.
At stake in the meantime are the futures of about 150 OGB employees that Rainwater says must be cut. One of those employees, former OGB CEO Tommy Teague, who brought the agency from a $60 million deficit to its present-day $500 million surplus, was fired on April 15. No reason was given for his firing other than his “lack of leadership.”
What part of $60 million deficit to $500 million surplus in five years don’t you understand, Mr. Rainwater? Mark Brady? Bueller? Gov. Jindal? Anyone?
His latest pronouncement was that the state was seeking a third party administrator (TPA) for the state’s Preferred Provider Organization (PPO) and possibly for the state HMO, now administered by Blue Cross/Blue Shield (BCBS). Of course the state’s contract with BCBS is presently in litigation with Humana claiming it was outmaneuvered when the state allowed BCBS to submit a proposal that was not within the parameters set forth by the state’s request for proposals (RFP).
Thrown into the mix was the decision by the Division of Administration (DOA) to do a quickie financial assessment of OGB by issuing a contract to a New Orleans company even as the state was soliciting proposals through an RFP for a financial analyst with experience in negotiating sales of insurance companies. (There’s that word “sale” again; it just won’t go away like Rainwater now wishes it would.)
That contract, for $49,999.99, which just happens to be one penny less than the $50,000 that would require approval of the Office of Contractual Review, was issued to Chaffe and Associates of New Orleans back in March.
Repeated requests for a copy of Chaffe’s report have met with denials that any report had been received. Those denials were reminiscent of the lawyer who, when confronted by a man who said he’d been bitten by the barrister’s dog, responded in typically lawyer fashion, “My dog doesn’t bite. I keep my dog inside my house. Besides which, I don’t own a dog.” But then, at a recent Senate Retirement Committee hearing, a DOA spokesman let slip a mention of a preliminary report.
Aha! Time for LouisianaVoice to make its fourth request for the report.
When are public records not public?
A former request for the document was made to Rainwater under the State Public Records Law which stipulates that the custodian of a public record has three days in which to respond to any such request. Our request was made on May 24. On May 27, a gentle reminder was sent, along with a copy of the statute which laid out civil and criminal penalties for non-compliance. Those penalties include fines, payment of the requestor’s legal fees and court costs, and jail time.
At 4:52 p.m. on May 27 (last Friday), Paul Holmes, Attorney 4, Division of Administration, Office of the General Counsel, responded thusly:
“A report generated by Chaffe & Associates was received on May 25, 2011. The report is privileged as part of the deliberative process and is exempt from disclosure under R.S. 44:4.1 as well as pursuant to Kyle v. Public Service Commission, 878 So.2d 650 (La. App. 1st Cir. 2004) and Donelon v. Theriot, 2011 WL 1733548, (La. App. 1st Cir. 5/3/11).”
Now we don’t pretend to know the law the way Mr. Holmes Esq. must (he’s an attorney 4, after all), but we do know the Public Records Law from more than a quarter-century of having to deal with unenthusiastic, recalcitrant bureaucrats.
Nowhere in the statute is a financial document on a taxpayer-supported agency exempted from compliance with the state public records statute.
Stand by. After all, a wise old sage named Yogi Berra once said, “It ain’t over ‘til it’s over.”
Jindal’s efforts to privatize OGB, cut OGB personnel by half, sell state prisons, increase employees’ pension contributions (while continuing to freeze state employee salaries), and to resist efforts to renew taxes that make sense (like tobacco taxes) while at the same time, protecting ludicrous and financially crippling tax breaks for the rich will continue unabated.
Moreover, remember last year when legislation was introduced to abolish Civil Service? That met with quite a bit of resistance and the effort sputtered. It wasn’t renewed this year. Want to know why? It’s an election year.
If Jindal is re-elected, and at this point, there’s no one on the horizon to take him on, you can expect those bills to pop up again and to be pushed by the administration with an intensity that will dwarf his privatization efforts.
Remember when that happens that you read it here first.
Posted in Campaign Contributions, Charters, Contract, Contracts, Economy, Exemptions, Incentives, Governor's Office, Higher Education, House, Senate, Layoffs, Legislature, Legislators, Privatization, Supriya Jinda Foundation, Taxes on April 1, 2011| 10 Comments »
Gov. Bobby Jindal has outlined an ambitious program for his second term of office, including the privatization of the Louisiana Legislature, state colleges and universities, the sale of all state roads and highways and bridges to private concerns, and rapid expansion of the state’s charter school system, all to be controlled by private entities.
His plans for the state, which he calls the “Piyush Push,” were revealed by WikiLeaks which published a series of emails between Jindal and corporate campaign supporters who have contributed millions of dollars to Jindal’s wife’s charity, the Supriya Jindal Foundation for Louisiana’s Children. Upon learning of the WikiLeaks report, the governor called a press conference to explain his programs.
The privatization plan calls for the takeover of the Louisiana Legislature by a corporate board made up of the CEOs of Louisiana’s larger corporations and Wall Street bankers, including AT&T and Goldman Sachs.
The operating boards of state colleges and universities would be merged into a single governing board with board members serving at Jindal’s pleasure. An obscure clause in his plan would allow him to retain control of appointments even after he leaves office. The so-called super board would be comprised of major contributors who would purchase stock shares in the universities. Board members would be allowed to send their elementary- and high school-age children and grandchildren to state charter schools.
“We are not going to raise taxes on the people of Louisiana,” Jindal said at the hastily called press conference attended only by reporters from the Baton Rouge Business Report. “We are going to run these universities like a business. Tuition will be adjusted to a level comparable to that of our nation’s finest institutions, the Ivy League schools, of which I am an alumnus. The board members will not draw per diem or salaries for their services but we anticipate they will profit from their sacrifice and hard work through stock ownership and lucrative stock options in the universities,” the governor said.
“Again, I want to reiterate that we are not going to increase taxes but the new owners of state roads, highways, and bridges will certainly be free to charge a modest usage fee for travel on their byways and bridges,” Jindal said. “People who drive cars should understand that use of roads and bridges is a privilege, not a right and that a usage fee is not the same as a tax; it’s a fee. We believe that these usage fees will offset the need for any increase in gasoline taxes.”
As for the future of the legislature, Jindal said it will be downsized from the current membership of 144 to 12 white males who will inherit all current campaign contributions remaining and accruing to the 144 outgoing legislators. The only way an African-American would be appointed would be in the event of a class action lawsuit by representatives of minority groups. “It almost worked with the Board of Regents,” the governor said in defending his legislative plan.
A few legislators voiced reservations with the manner in which Jindal is moving to privatize their institution, but after having gone along with the governor in other privatization endeavors, most indicated they would not resist the new austerity moves by the governor. Nor was there any immediate indication that legislators would attempt to invoke the separation of powers doctrine under which the legislature has heretofore been largely independent of the governor’s office.
Sen. Carl Spackler of Bushwood, however, was one who vowed he will not vote in favor of privatization of the legislature. “I believe the legislative branch of government is protected in the Constitution somewhere and I’m going to read up on that,” Spackler said. “If I’m correct, I’m not going to sit still for him putting me out of a job. Who does Jindal think we are, state employees? I worked hard for my GED.”
But Jindal was emphatic about pushing for complete passage of his austerity package, saying there would be no compromise. “I want to emphasize that these moves are in keeping with my ‘more is less’ philosophy for all government,” he said. “For those who may question these actions, I would say to them, ‘Quit whining and work smarter.”
Neither is Jindal considering an increase in tobacco taxes. “Smoking is a private decision, an individual right, and smokers should not be penalized for exercising that right,” he said. “We are, however, imposing a significant surcharge for abortions to encourage the notion that life is sacred and women should not make such decisions too lightly. Again, I want to emphasize this is not a tax.”
He said he is also planning to sharply reduce the number of state employees. One example of his layoff plan would require every Louisiana citizen who is unwilling or unable to complete the process on-line to appear at a central location in Baton Rouge, Shreveport, Monroe, New Orleans, Alexandria, Lafayette, or Lake Charles for driver’s license applications and license renewals. “I don’t see why we can’t get by in each office with one or two persons,” he said. “How difficult can it be to issue a driver’s license?”
He also announced plans to double the size and the salaries of the state’s Homeland Security Office while at the same time saying he would cut staff at state hospitals to a single physician and nurse per specialty at each facility. “I believe with fewer doctors, people will find a way to stay healthier,” Jindal said.
“Again, I want to say we are not going to raise taxes,” he said. “That is not an option. We are, however, going to raise the annual deductible on medical care to $12,500 per year, increase co-payments to $50, and at the same time, we’re asking state workers to kick in another 75 percent on employee premiums on health care coverage and retirement benefits.”
Jindal used the press conference to take yet another swipe at big government in general and President Obama in particular. “The bloated federal government should take a look at Louisiana and say, “That’s how things should be done,” he said. “We’re proving in our open and transparent administration that our ethics are above reproach and we’re wiping out our deficit with good, open and honest government,” he said as the CEOs of AT&T, Northrop Grumman, Worley Catastrophe Response, and Blue Cross/Blue Shield stood behind him.
“I would once again call upon the Obama administration to repeal its drilling moratorium in the Gulf of Mexico so that our oil companies can make a decent living,” Jindal said.
Jindal said he would sell all public schools to private entities so that they could be converted to charter schools. He said the move would be a model of efficiency for the rest of the nation. “I believe the 25 percent loss in Detroit’s population over the past decade, for example, could be reversed simply by converting to my proposed system for Louisiana schools,” he said.
“I fully anticipate there will be a bidding war for acquisition of schools as public finance will guarantee a solid return for investors,” Jindal said. “Of course my administration will invest the funds derived from the sale so that cash flow will support scholarships to the schools or such other General Fund needs as might arise in the budget balancing process.”
He said those children unable to take advantage of the improved educational opportunities will be housed in dormitories near the Nucor Steel Mill in St. James Parish, the Tournament Players Club golf course in Jefferson Parish, and the Foster Farms chicken processing plant in Union Parish. “There, they will be given hands-on training to meet the plants’ needs,” he said. “If all else fails, they would certainly be qualified to become slag haulers, caddies at state-run golf clubs, or chicken pluckers.”
To insure that the schools will succeed and will demonstrate high test scores, students will be carefully pre-screened before being accepted for enrollment, Jindal said. The schools will be run by boards comprised of members selected by the owners. Owners and board members, along with the college and university Super Board members, will be given first choice of the available seats in the school for their children, as will those of select employees.
“I am fully aware that all this will require Constitutional amendments but I fully expect the voters of Louisiana to continue to support our programs. But just in case, beginning here and now, I am stepping up my schedule of visiting churches to garner popular support for my proposals. Beginning Sunday and continuing through Election Day, I will be visiting churches all over north Louisiana. My agenda will consist of three things: Sunday morning and Sunday evening services as well as Wednesday night prayer meetings.”
And that’s the way it is on Friday, April 1, 2011.
Posted in Budget, Civil Service, Education, Governor's Office, Higher Education, Layoffs, Retirement, Revenue, Taxes, Transparency on March 18, 2011| 2 Comments »
Editor’s note: Periodically, LouisianaVoice invites guest columnists to contribute to our blog. The following essay was written by Don Whittinghill, consultant to the Louisiana School Board Association.
It is also posted on the association’s website at http://www.lsba.com/.
Last week, Gov. Bobby Jindal released a budget proposal for the 2011-2012 fiscal year.
Legislators reacted swiftly. Some of them accused Gov. Jindal of balancing the state’s operating budget on the backs of college students, state workers, and the poor.
Demonstrations were staged on the Capitol steps.
The proposal was designed in the face of a financial chaos that might well be a politically orchestrated stage on which to carry out an ultra conservative agenda.
First, state universities were told by the governor that they would have to endure another 35% in cuts. Then, Superintendent Paul Pastorek told newly elected K-12 school board members that it would be likely only a 10% cut. Two days later the governor proclaimed it would be less than 10%.
Secondly, the official revenue estimates (made March 7) were for revenues to amount to $7.8 billion. The actual revenue collections for 2010 amounted to $7.1 billion.
It should be recognized that revenue estimates are made several times each year for the past 17 years. Over the 19 years for which estimates are recorded the Legislative Fiscal Office calculates that it has underestimated revenues in 16 of those years. The March estimate is that used for casting the state budget. Over those 19 years the fiscal authorities calculated an error rate, on the low side, averaged 7.7%. For each percent of underestimating revenue the fiscal office reports $96 million for each percent underestimated. That suggests the current pre-legislative estimate of revenue could be $739 million below actual when all is said and done.
When one looks into the presented budget one finds that vouchers for fewer than 2,000 New Orleans school children will increase to $10 million. These vouchers went, last year, to slightly more than 1,600 and the size of the average voucher was around $4,400. Current MFP budget letter shows the average per pupil contribution of state funds is less than $3,500.
The administration declares that it is protecting Pre-K-12 education. But, there is no adjustment of inflation, retirement system contributions rise more than 5%, health insurance coverage increases, school bus fuel costs have grown more than 20% in the last month and are projected higher. The legislature decreed that local school districts must pay for private school bus transportation that had formerly been paid by the state. The $5,000 per year stipend granted by the state for Nationally Certified Teachers has now gravitated to the local school boards to pay. Now, the administration proposes to fund TOPS scholarships by raiding a state trust fund that generates money for K-12 education.
As more and more public schools are taken over by the state and converted to charter schools that divert money from local public schools, Gov. Jindal presents as part of his budget cutting the selling of prisons to private firms. In the case of prison or privatized management of charter schools state money is diverted to the profit line. It is unclear how such diversion of funds can make for better service or lower costs.
Most folks would consider such a series of budgetary moves to be CUTS to Pre-K-12 education!
The administration declares it will not grant state employees, including teachers, a pay increase. But its budget calls for raising retirement contributions by 37%. This governor seems to think that raising college tuition is not the same as a tax paid by students and their parents.
The shock and awe doctrine that the administration has established in the media is, it seems, calculated to bring popular acceptance of policy that would not be accepted under more normal circumstance. In the game of craps such a move is known as a “come bet.”
The proposition that half of the dollars needed to fund the TOPS program would come when voters approve another Constitutional Amendment that has not even been introduced to the legislature would certainly raise an eyebrow or two if the average business did so.
The administration says it will cut over 4,000 state jobs to save money. The fact that over half of them were jobs not filled during the 2010-2011 fiscal year suggests a misunderstanding of the term cash flow.
An important ingredient in the state’s revenue stream is derived from the oil and gas industry. Many headlines, over the past year, have signaled huge shortfalls in mineral income to the state. However, a look at current official reports reveals some interesting facts:
The Revenue Estimate underlying the budget calls for an average price for crude oil pegged at $84.65 per barrel. Oil and gas industry estimates for the coming year average $101.77 per barrel. Each dollar per barrel difference amounts to $12 million in state revenue. That means if business forecasts are correct, the Revenue Estimating Committee is underestimating by over $200 million.
In 2010, Louisiana’s production of oil on state lands and waters increased over that of 2009 by 626,243 barrels. State natural gas production also significantly increased by 2.2 billion cubic feet. Much has been made of oil producers’ tax relief creating a shortfall in severance tax revenue. According to the state revenue department 2010’s severance tax increased $73 million or 10.7% over the prior year. It should also be recalled that severance taxes are dwarfed by other state revenues that flow from oil and gas production. Well over $1.1 billion was paid out to land owners (including the state) in royalties on production from their lands and in other expenses subject to sales taxes. The income collected by Louisiana’s folks is subject to income tax (lessened by depletion allowance deductions) which is substantially more productive for the state treasury. In the Haynesville Shale gas field, more than 4,000 acres of state-owned land is leased for production.
One might also consider the administration/legislative attitude toward the “Rainy Day Fund.” The Center on Budget and Policy Priorities, a Washington, D.C-based think tank says they are designed to be used when times are bad. In Louisiana, the debate over just what constitutes a fiscal “rainy day” has fixated budget planners for more than a year. About $644 million remains in the Budget Stabilization Fund. One might question whether or not these times are sufficiently bad to justify tapping those funds. While there are restriction that revolve on repayment into the fund, that law can be changed about as easily as the administration-proposed raid on trust funds to fund TOPS.
It appears as if there is a real need to evaluate administration shock-doctrine financial claims. If the administration is right, that leaves another option to be considered other than that proposed.
Moody’s Investors Service, in January, reported that Louisiana’s debt per capita was $4,799 with by far the majority being unfunded pension liability.
Still another D.C.-based think tank, The Tax Foundation, ranks states on a per capita tax basis. Louisiana, in the most current ranking, is 42nd lowest taxed in the nation. One might ask: does Louisiana face a spending problem or is it short of revenue to meet real needs?
When the smoke enveloping the newly proposed budget clears, and the mirrors start to reflect reality, perhaps the chaos being manufactured will be clearer. The priority of state spending then might be seen less on enhancing the Governor’s national image and more on meeting public needs.