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J. Ryan Hudson and Time magazine had it right

Posted in Budget, Campaign Contributions, Economy, Governor's Office, House, Senate, Legislature, Legislators, Public Records, Taxes, Transparency on October 21, 2010| 1 Comment »

J. Ryan Hudson made the most of his 15 minutes.

Just in case you haven’t been paying attention lately, J. Ryan Hudson is the LSU Student Body president who wrote the now-famous op-ed letter to the Keene (New Hampshire) Sentinel in which he opined that Gov. Bobby Jindal “is spending more time in your state than the one he was elected to represent.”

As class sizes at LSU have grown, higher education has undergone $280 million in budget cuts over the past two years and is facing another $290 million in cutbacks, prompting Hudson to write that Jindal should pay more attention to state budget shortfalls than spending time campaigning for Republican candidates in other states.

“On behalf of the students whose hopes for a brighter future will soon be crushed, I beg you to return to Louisiana and fix your state’s serious problems,” Hudson said. “You’ve neglected your constituents long enough.

“You’ll have a much better chance of becoming president if you save, instead of destroy, Louisiana’s universities,” he said, implying that Jindal may have a not-so-secret agenda aimed at seeking higher office.

To be sure, Hudson’s letter was brash, maybe a little rude, and certainly timely.

And, sadly, all too accurate.

Jindal, rather than anchoring himself to the Capitol’s fourth floor office, chooses to globetrot on behalf of Republican candidates most in Louisiana have never heard of while refusing to endorse Republican candidates in Louisiana. One can understand his reluctance to speak out in favor of David Vitter in his Senate race against Charlie Melancon given Vitter’s political baggage, but Secretary of State Jay Dardenne can’t wrangle an endorsement from Jindal even though Dardenne’s TV spots stress his wish to work with Jindal in promoting the governor’s programs.

Even more difficult to comprehend is Jindal’s reluctance to tackle state finances head-on. After all, hasn’t he been telling us over and over that he has the job he wants? If that’s true, then he should stay home and do that job.

Oh, sure, he pays lip service to reducing, or streamlining, state government. But as the state budget turns an ever-darkening shade of red, he stands adamant in his refusal to address a tax increase in the wake of dwindling state revenues.

Tax increases are never pleasant, especially with statewide elections only a year away, but neither is the prospect of a state becoming insolvent. That’s a very real prospect.

And Jindal, along with an out-of-control legislature, must shoulder the blame. The state had money, but the legislature, drunk with one-time revenue, went spend-crazy this year and Jindal wouldn’t—or couldn’t—summon the courage to rein in the insanity with his line item veto power.

Time magazine describes half the states as having joined the federal government “in the fiscal sick ward” as high unemployment and the recession combined with drastically reduced income to deliver a weakened economy that appears at times to be spiraling out of control.

Barely into its new fiscal year, Louisiana is already facing a $100 million deficit, thanks to depressed oil prices and reduced tax revenues, the magazine said. To deal with the crisis, the state has frozen hiring, deferred maintenance on state buildings and canceled $500,000 in new equipment. Legislators, meanwhile, are talking tax increases. “We’ve run out of windfall from Washington,” the state budget director lamented. “We’ve run out of exotic tax measures. Our economy has run out of gas, and in Louisiana, when you run out of gas, you run out of money.”

Sound familiar? The by now all too familiar theme should resonate with anyone who follows Louisiana politics.

But that story actually ran in Time on Nov. 8, 1982—almost exactly 28 ominously prophetic years ago when Ralph Perlman was budget director and Dave Treen was governor. Louisiana has held seven elections and has chosen five new governors since then. The more things change, it seems, the more they stay the same.

Today, nearly three decades after that story, Louisiana is wrestling with a $108 million budget deficit less than four months into the 2011 fiscal year than began on July 1. Even worse, the administration is anticipating a staggering projected shortfall of up to $2 billion next year.

It’s not as if the administration and legislators were not forewarned: Greg Albrecht, the chief economist for the Legislative Fiscal Office, said in May that he didn’t expect state income tax revenue to meet earlier forecasts.

Now, Gov. Bobby Jindal finds himself trying to find a way to cut state budgets yet another 35 percent—when he’s in the state, which is becoming more and more infrequent. Some legislators said they see the present fiscal malaise as a chance to downsize government in lieu of falling back on the usual accounting tricks to balance the budget.

Sen. John Alario, D-Westwego, called the situation “a grand opportunity for us to scale back government.” Alario, the legislator primarily responsible for the often-criticized state’s $22 million purchase of the financially troubled Players Tournament Club golf facility in Marrero, said downsizing “could never be done if you didn’t have to be faced with this situation.”

Jindal, in lieu of raising taxes, seems intent on slashing higher education and health care. Meanwhile, he keeps popping up in Florida, New Hampshire, New York, Missouri, Georgia, California, Ohio, and Minnesota to campaign for GOP candidates.

Legislators say the anticipated budgets will close hospitals for the poor and cripple higher education while college presidents call the proposed cuts “catastrophic.” Former Gov. Kathleen Blanco says a 35 percent cut would effectively shut down government services and that education would undergo a “meltdown to mediocrity.”

Jindal says spending cuts are preferable to higher taxes and that additional privatization may be in store as a means to save the state money.

He missed his chance to cut spending at the end of the last regular legislative session when he could have exercised his line item veto power to bring the Capital Outlay bill more into line. He had the opportunity to veto more than $450 million in Priority One spending but chose to veto only $9.4 million—all in Priority Two, or second year spending. Among the Priority One appropriations in the Capital Outlay Bill that were allowed to stand were:

• $800,000 for land acquisition for the proposed Allen Parish Reservoir;
• $1.4 million for the proposed Bayou Dechene Reservoir in Caldwell Parish;
• $2.6 million for the Washington Parish Reservoir Commission Feasibility study;
• $17.2 million for Bayou Segnette Festival Park land acquisition and sports complex improvements;
• $28 million for modifications to the Performing Arts Center in Jefferson Parish;
• $2 million for construction of a playground Basketball Gym in Orleans Parish;
• $1.8 million for construction of the Little Theatre of Shreveport;
• $2.6 million for a new Westbank YMCA in Algiers;
• $2 million for the New Orleans Music Hall of Fame;
• $6 million for construction of a new courthouse in Baton Rouge;
• $2.8 million for the Dryades YMCA in New Orleans;
• $5.4 million for the Red River Waterway Commission;
• $7.7 million for the renovation of the Acadiana Center for the Arts in Lafayette;
• $2.5 million for improvements to the Coteau Water System in St. Martin and Iberia parishes;
• $2.4 million for the Union Parish Law Enforcement District;
• $1.8 million for construction for the Robinson Film Center in Caddo Parish;
• $12 million for construction of a convention center complex in Shreveport;
• $3.8 million for a new tennis center in Orleans Parish;
• $4.7 million for construction of the Louisiana Artist Guild Arts Incubator in New Orleans;
• $26.5 million for expansion and construction of the National World War II Museum in New Orleans;

Millions more were spent on construction projects that included recreational facilities, councils on aging, courthouses, sheriffs’ offices, jails, drainage projects, work on parish and municipal road and street construction projects, community centers, and water systems.

As if that were not enough, when legislators found extra money lying around, as they always seem to do during each legislative session, the House quickly pushed HB 76 through, appropriating an additional $33 million in local pork projects. Some of those expenditures:

• $150,000 for the Louisiana Political Hall of Fame in Winnfield;
• $500,000 for the Louisiana Endowment for the Humanities;
• $500,000 to “organizations which assist small towns and rural areas with their water and wastewater systems;”
• $250,000 for construction of an animal shelter in St. Charles Parish;
• $1 million to the Lafayette Parish Consolidated Government for infrastructure construction;

Of that $33 million, Jindal vetoed only 32 projects totaling less than $2.5 million.

That’s a sign of a weak governor—one who lacks the singular courage to scale back reckless spending by legislators when the very future of the state depends on it, demands it. As a result, higher education and health care will continue to suffer while golf courses, community centers, baseball parks, sheriffs’ offices, ground water reservoirs, and other local projects will flourish while legislators take the credit and bask in the gratitude of constituents back home.

The name of that 1982 Time magazine article that chronicled economic hard times for state governments?

“Living Beyond Their Means.”

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Earl’s big blunder (no thanks to Leander Perez)

Posted in Budget, Contract, Contracts, Earl Long, Huey Long, Economy, Ethics, Exemptions, Incentives, Legislature, Legislators, Lobbyist, Revenue, Taxes, Transparency, tagged , , , , , , , , , on August 11, 2010| 7 Comments »

            The fiscal news from Baton Rouge continues to be bad. Besides a projected $319 million deficit for the current fiscal year that ends in seven weeks, there have been moves to privatize state services, a sell-off of state assets, layoffs, and now a massive oil spill that threatens the state’s seafood industry.

            There are those who insist it didn’t have to be that way but 60 years ago, on June 5, 1950, everything changed. That’s the day that the U.S. Supreme Court ruled that all of the submerged land from the shores of coastal states belonged not to the states, but to the federal government.

            It was a devastating decision that affected coastal states from Texas to Florida. An earlier decision, in 1947, had a similar affect on California. The ultimate cost to the states estimated as high as $300 billion, according to the late Mike Mansfield, former senator from Montana. Mansfield, writing in the May 4, 1953 Congressional Record, was critical of the decision by the Eisenhower administration to returned title of the submerged land back to the states.

            Eisenhower’s action, which was approved by the House on April and by the Senate on May 5, reversed a proclamation by President Truman in 1945.

Truman, in his Continental Shelf Proclamation, said that federal government had jurisdiction over all the mineral resources in the lands beneath the oceans out to the end of the U.S. Continental Shelf. Immediately after he issued the proclamation, the federal government initiated litigation against the states, claiming sovereignty over all offshore resources. Truman reasserted that position on Jan. 16, 1953, just before leaving office when he issued an executive order that set aside the submerged lands of the Continental Shelf as a naval petroleum reserve.

The issue of tidelands mineral rights didn’t appear of major importance to either Louisiana or the federal governments other than shrimpers and oystermen, until technology progressed sufficiently to drill in offshore waters. In November of 1947, the first such well was completed in 16 feet of water in the Ship Shoal area in the Gulf of Mexico, about 12 miles south of Terrebonne Parish. After that, all bets were off.

            Just as with California, litigation soon followed as the federal government filed suit against both Texas and Louisiana over control of more than four million acres of submerged land. Then, in the early fall of 1948 came one of the biggest negotiating blunders in the history of Louisiana politics that ultimately led to the landmark Supreme Court decision that will in all probability go unnoticed by most on its 60th anniversary on June 5.

            The players included President Truman, Speaker of the U.S. House Sam Rayburn, Gov. Earl K. Long, Lt. Gov. Bill Dodd, and Plaquemines Parish boss Leander Perez. Lurking in the shadows was the man who would emerge central to the decision by Long to refuse a generous offer from Truman that would cost Louisiana upwards of $100 billion, according to Dodd. That man was 29-year-old Russell Long, Earl’s nephew and the son of Huey P. Long.

            Dodd, in his book Peapatch Politics, laid out the details of a deal gone bad as a result of Russell Long’s political ambitions and Perez’s determination to protect his questionable control of mineral-rich Plaquemines Parish with Earl Long and Dodd caught in the tug-of-war between the federal government and Louisiana.

            In 1948, Russell Long was a candidate for the U.S. Senate. Perez, who was also head of the Democratic State Central Committee, ran his own less sophisticated but equally prosperous version of Huey’s old Win or Lose Oil Company in Plaquemines and, according to Dodd, was not above a little blackmail and extortion to protect his fiefdom. Rayburn was Truman’s emissary who was instructed by the president to make what in hindsight was a more than generous offer to Louisiana to settle the federal lawsuit against the state.

            In that fateful autumn of 1948, Rayburn called Dodd and Louisiana Attorney General Bolivar Kemp to a Washington meeting. Also in attendance in Rayburn’s office were Perez, Texas Attorney General Price Daniel, several representatives of the Department of Interior, as well as others.

            Rayburn, without fanfare or ceremony, offered to settle the Tidelands dispute with Louisiana by offering the state two-thirds of all revenues accruing from mineral bonuses, leases, and royalties in the two-thirds of a three-mile band extended from the Louisiana coastline outward into the Gulf of Mexico. Rayburn also offered the state 37.5 percent of all revenues in the Tidelands outside the three-mile band. In addition, Rayburn said the federal government would drop its lawsuit against the state. It was a much better offer than the state had anticipated and everyone present except Perez was ready to jump at the offer.

            Perez told Rayburn that he would recommend to Gov. Long that the offer be rejected, prompting Rayburn to explode. “This ain’t no compromise,” he said. “It’s a gift, and you better take it while the president is in the mood to give it to you.”

            Perez, who as attorney for Plaquemines Parish’s various levee boards, was in a position to dictate how and to whom the levee boards leased their lands. Many of those leases went to corporations he and his family controlled, reaping him millions in much the same manner in which Huey Long had structured his Win or Lose Oil Co. With no intention of losing any of his power, he got to Earl Long first and convinced the governor that the state was being sold a bill of goods by Truman and Rayburn. He insisted, moreover, that the state would prevail in the federal litigation against the state even though California three years earlier had lost an identical lawsuit.

            Perez, who was backing States’ Rights presidential candidate Strom Thurmond for president, controlled the state Democratic ticket and threatened to take Russell off the States’ Rights ticket, which would, in effect, hand the U.S. Senate seat to Shreveport Republican Clem Clarke. Earl wanted his nephew to win the election and eventually capitulated to Perez’s demands to reject Truman’s offer, prompting Baton Rouge Morning Advocate Editor Maggie Dixon, a close friend of the governor, to remark, “Earl is gonna trade our chances to be a tax-free state in order to elect that little tongue-tied nephew of his to the U.S. Senate.”

            Dodd, in his book, speculated that the immediate loss to the state was $66.5 billion, not including billions more paid in bonuses and leases, plus the severance taxes that would have amounted to about a fourth of the total value of production. Dodd said the cost as of 1986, when he wrote his book, was “$100 billion plus,” with future losses as much as $10 billion a year.

            Still, given the track record of the legislature to fritter away past “embarrassments of riches,” one would have to wonder how such an influx of revenue might have taken legislators from embarrassment to humiliation in emptying the state coffers.

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Here’s how we got where we are

Posted in Budget, Civil Service, Economy, Education, Governor's Office, Health Care, House, Senate, Layoffs, Legislature, Legislators, Politicians, Taxes, Transparency on July 28, 2010| Leave a Comment »

            The 2010 regular legislative session stumbled to a finish this week with the usual bickering over budget cuts for education and public health and appropriations for legislators’ home districts. Only this year the cuts were deeper in an effort to offset as much as $300 million in deficits which caused the local pork projects to be even more questionable.

            Even as state property was being sold off, agencies privatized, education and health care budgets slashed, and merit increases for state classified employees frozen (because the raises would cost the state $20 million), lawmakers managed to tack on $33 million in amendments to HB-76 to fund pet projects in their districts.

Otherwise known as the ancillary fund, or the Supplemental Appropriations Bill, HB-76 passed both houses without a negative vote, passing 88-0 in the House with 15 absentees, and 37-0 in the Senate with two members not present.

            Those not voting included Reps. James Armes (D-Leesville), Gordon Dove (R-Houma), Noble Ellington (D-Winnsboro), Rickey Hardy (D-Lafayette), Lowell Hazel (R-Pineville), Nita Hutter (R-Chalmette), Chuck Kleckley (R-Lake Charles), John LaBruzzo (R-Metairie), Bernard LeBas (D-Ville Platte), Nick Monica (R-LaPlace), Kevin Pearson (R-Slidell), Erich Ponti (R-Baton Rouge), Gary Smith (D-Norco), Ricky Templet (R-Gretna), and Ernest Wooton (R-Belle Chasse), and Sens. Daniel Martiny (R-Baton Rouge), and Joe McPherson (D-Baton Rouge).

            HB-76, with the $33 million in amendments, includes but is not limited to the following appropriations:

  • Nearly $1.5 million on 50 parish councils on aging;
  • More than $3.75 million for municipalities and parishes for unspecific purposes;
  • Eddie Robinson Museum in Grambling ($20,000);
  • Festival and cultural activities ($40,000);
  • Louisiana Council on the Social Status of Black Boys and Men ($100,000);
  • Greenwell Springs Road Economic Development District ($100,000);
  • Louisiana Political Hall of Fame and Museum in Winnfield ($150,000);
  • Arts Program for decentralized arts ($750,000);
  • Jefferson Performing Arts Society ($210,000);
  • Jefferson Parish Human Services Authority ($255,000);
  • Livingston Parish for economic development studies for a parish airport ($25,000);
  • Vernon Parish Police Jury for fairground cattle fences ($20,000);
  • Tioga High School in Rapides Parish ($20,000);
  • Ouachita Parish for rehabilitation of J.S. Clark Cemetery ($30,000);
  • Catholic Charities Archdiocese of New Orleans ($100,000);
  • Catholic Charities Archdiocese of New Orleans, Foster Grandparents program ($40,000);
  • East New Orleans Neighborhood Advisory Commission ($70,000);
  • Jefferson Parish Sheriff’s Department’s Cops and Clergy Program ($25,000);
  • Tipitina’s Foundation in New Orleans ($10,000);
  • Construction of an animal shelter in St. Charles Parish ($250,000);
  • Animal shelter operations, St. Charles Parish ($50,000);
  • Construction of an emergency operations center in St. Charles Parish ($100,000);
  • St. Charles Parish Hospital for emergency room equipment ($175,000);
  • Gretna Fest ($200,000);
  • Heritage Festival in Gretna ($10,000);
  • Baton Rouge park improvements ($100,000);
  • Terrebonne Parish regional military museum ($20,000);
  • Farmers’ and Fishermens’ Market in Westwego ($100,000);
  • Westwego Performing Arts Center ($250,000);
  • Northeast Louisiana Delta African American Heritage Museum ($5,000);
  • New Orleans for workforce development, cultural, and enrichment programs ($300,000);
  • Renovation of high school gym in Marksville into a community center ($200,000);
  • New Orleans recreational and cultural activities ($75,000);
  • Le Petit Theatre du Vieux Carre in New Orleans ($25,000);
  • Louisiana Center Against Poverty, Lake Providence ($150,000);
  • City of Alexandria for health care related to sickle cell anemia ($35,000);
  • North Iberville Community Center ($50,000);
  • DeRidder Area Ministerial Alliance for God’s Food Box ($15,000);
  • Doyle High School in Livingston for band equipment ($10,000);

            The appropriations for municipalities and parishes, for the most part, were approved with little or no explanation or justification other than for “infrastructure improvements.”

            Other appropriations amended into HB-76 by legislators were for police and sheriff’s departments, local fire departments, voluntary fire departments, parks, libraries, water and sewer systems, airports, parks, road repair and construction, and non-profit entities.

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