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State audit critical of Department of Corrections

January 15, 2011 by tomaswell

A state audit has criticized the Louisiana Department of Corrections for its failure to adequately monitor programs for state prisoners housed in local facilities.

The audit, performed the Louisiana Legislative Auditor, was for Fiscal Year 2009. It also noted that that while the number of offenders supervised by probation and parole officers increased over the past five fiscal years, the number of probation and parole officers decreased, creating even more of an average caseload that was already higher than nationally recommended standards.

While the audit acknowledged that the Department of Corrections currently saves more than $32 million annually by providing incarceration alternatives, additional cost savings could be realized by using electronic monitoring as an alternative to incarceration for non-violent, non-sexual offenders.

At $42.75 per day, Louisiana has the fourth lowest cost per day for housing offenders during Fiscal Year 2009 among the states in the Southern Legislative Conference, the audit report said. That could be because 19,651 prisoners are housed in local facilities at a cost to the state of $24.39, a savings of $18.36 per day per prisoner, or 42.9 per cent. That comes to a total savings of more than $360,000 per day.

The downside to the savings, the audit said, is that local jails and not the Department of Corrections make the determination whether an offender is placed in a state correctional facility or in a local jail. Moreover, the department has no program in place to evaluate the rehabilitation programs offered to its offenders housed in local jails. Nor does the department monitor the progress of offenders in such local programs.

The audit report further said the department, by analyzing recidivism rates by local jails, could better determine which local jails with which to have offender housing agreements.

“Louisiana may be incarcerating offenders longer than necessary based on a grant program that no longer provides the department money and has had no analysis of success,” the audit report said.

That grant program, the Violent Offender Incarceration and Truth-in-Sentencing Incentive Formula Grant Program, was initiated in 1996 and provided states with funding to build or expand correctional facilities or jails.

To be eligible for the grant, a state had to pass laws requiring those convicted of certain violent crimes to serve no less than 85 percent of the imposed sentence. Before implementation of the grant, Louisiana law required violent offenders to serve at least 75 percent of the sentence imposed before becoming eligible for parole.

In fiscal years 1996 to 1998, Louisiana received $37.8 million from the grant but from fiscal years 2008 to 2009, that amount dropped precipitously to only $739,290. During FY 2010, Louisiana received no money from the grant. “As a result, Louisiana may be incarcerating offenders longer than necessary without receiving any associated benefit,” the report said.

Local housing of state adult offenders accounted for a cost of $181.9 million, or 27.3 percent of the Department of Corrections total budget of $665.9 million.

Posted in Auditor, Prison, Transparency | 4 Comments »

Sparta Aquifer Remedy

January 14, 2011 by tomaswell

By John Sachs
Complainers must always be ready to offer solutions. This I will do in today’s follow-up to last week’s commentary complaining about abuses to our Sparta aquifer by paper mills and shale gas well fracturing (aka fracking) companies.

First of all, we must immediately pass and implement strong laws that prohibit any actions that imperil the health of our aquifers. Such legislation includes federal laws, which will ensure the protection of aquifers that cross state lines. Clean water is a priority that demands the strongest legislation and regulation. An immediate order to cease and desist harmful practices must be exercised and must remain in effect until corrective action is taken.

We currently have strong legislation regarding surface rights. If someone tries to encroach on your land, you can get an immediate cease and desist order. Why not have similarly tough laws regarding the water under our property? We have such laws regarding rights to mineral deposits under our land, especially oil and gas. Imagine that! However, no such laws exist regarding fresh water, the most precious of all subsurface commodities, without which life will cease to exist.

As soon as we have strong and comprehensive laws protecting aquifers, then courts can order that harmful practices cease immediately. I recommend that the following passage become the primary law, federal or state, regarding aquifer protection:

A Law: Any action, practice, or procedure which does, might possibly, or so much as gives the appearance or suggestion that it may possibly cause damage to an aquifer must immediately cease and desist, and may resume only when it is proven to the court’s satisfaction that such actions, practices, or procedures are not harmful to the aquifer.

Now here’s the critical part. The law must be written so that an indisputable burden of proof rests with the presumed guilty party and NOT with the party making the accusation. My proposed law above accomplishes this. As it is now, the paper mills and shale fracking companies can tie the whole process up in knots for years while they continue their abusive practices. How you ask? By requiring the folks complaining about abusive practices to prove indisputably that they are correct and that the paper mills and fracking companies are wrong.

I realize that this appears to run counter to the “Innocent until Proven Guilty” principle. However, such is not the case where irreversible damage can occur to an irreplaceable natural resource critical to sustaining life. Where that possibility exists, the law must err on the side of caution. There are numerous legal precedents supporting this principle.

The failure to take timely protective measures often results in the accuser incurring additional damages because of continued harmful actions by the accused. The accused, in our case the paper mills and fracking companies, continue to damage the Sparta aquifer while everyone else (the accusers) stand around almost helplessly discussing what should be done about the problem.

The paper mills are playing “delaying games” with those trying to resolve and remedy our declining aquifer problem — which is the result of the mills extracting more water than the aquifer can sustain. The mills prevail because we do not have strong laws that require them to cease their extraction of excessive amounts of water at the first hint that they are damaging the aquifer. Laws putting the burden of proof on the accused would move remedial actions along at warp speed.

The accused will play the “delaying game” by saying that they need proof that the amount they are extracting is damaging the aquifer. Such proof takes at least a year of research, report writing, discussion, and follow-up.

Then the accused asks for assistance in the design and development of an alternative source of water. Another year passes.

Then the accused argues that the EPA, DEQ, Corps of Engineers, or FDA must first approve any proposed alternative water extraction, use and disposal proposals. Another two to three years passes.

Then the accused proposes to implement a method that they know won’t be approved by regulators, well aware that this tactic will allow them to begin court proceedings. More years pass. In the meantime, the accused continue to remove water from the aquifer – quite content to play the “delaying game.”

By this time ten to fifteen years have passed. The aquifer has been destroyed, the mill has closed, and people living in the region are left to suffer the cost and inconvenience from the loss of their clean, pure, reliable, aquifer water – a situation once so easily avoidable if only timely, corrective action had been taken.

Finally, if the mill caught on fire and the water was needed to put it out, how long do you think it would take the West Monroe paper mill manager to determine that there were no environmental or other problems requiring answers before he authorized dropping pumps and hoses into the Ouachita River? Something tells me “delaying games” wouldn’t be a part of that decision process.

Posted in Water Reservoirs | Leave a Comment »

Give us a contract and we’ll tell you where your education dollars go

January 11, 2011 by tomaswell

When Buddy Roemer was elected governor in 1987, one message that he seemingly never tired of repeating was that if elected, he would board up the top three floors of the Louisiana Department of Education.

Had he made good on that one promise, he might still be governor.

The Department of Education has long been criticized by lawmakers as being far too top-heavy in administrative personnel while short-changing students in the classroom. And while the number of administrators and bureaucrats in the department may indeed be high, when it comes to creative ways in which to spend taxpayer dollars—federal or state—there doesn’t appear to be any agency in state government that can match Education in pure gooneybabble spending.

In Fiscal Year 2008-2009, the last year for which figures were made available, the department handed out 1,009 contracts totaling nearly $130.1 million. The previous year was even worse. In the year ending June 30, 2008, it issued 1,395 contracts totaling $162.2 million. That comes to more than 2.400 contracts worth over $292 million in just two years.

The contracts, issued to individuals, state and federal agencies, non-profit groups, churches, and corporations, ranged from as little as $500 to more than $8 million.

Granted, much of the money was federal dollars and some of the contracts were inter-agency pacts, meaning money was simply transferred from one state entity to another.

But a $94,000 contract to Sports 4 Kids that ran from Aug. 18, 2008 to June 15, 2009 that calls for the contractor to provide a program to help students learn “valuable social skills through organized play on their recess and lunch periods” has to raise a few eyebrows. How did we ever learn to play without Sports 4 Kids?

Or how about the back-to-back contracts issued to Joy Corporation of Zachary? One nine-month contract from Jan. 1 through Aug. 31, 2007, for $220,000 and paid with 100 percent federal funds called on Joy to provide students in grades K-12 with “high quality youth development services that support student learning, including tutoring and recreation.”

The next year Joy, founded by Ron Jackson, a former state employee who was recently fired as interim Superintendent of Schools for the City of Baker after only 17 days on the job, did even better, receiving a 10-month contract running from Oct. 1, 2007 through Aug. 31, 2008, that was for the same services but the amount was increased to $263,295.

Some of the contracts were with individuals. One such 11-month contract for $48,800, called for the contractor to provide consulting services to the New Orleans Recovery School District Central Office “to assist with the creation of sustainable relationships with professional unions.”

The $341,465.48 contract to Peter A. Mayer Advertising was simply for a six-month public relations campaign “to establish a positive image of high school redesign.”

CN Resource, LLC, received a contract for $850,000 that ran from May 1, 2006 through April 30, 2007 “to assist the state in ensuring program integrity and assessing compliance of specified participating agencies with USDA Child Nutrition Program.” That, however, apparently was not sufficient because a contract for $32,900 was then awarded an individual from Oct. 1, 2007 through September 30, 2008, “to review program records and (to) conduct nutrient analysis of one week of menus to report on compliance with state and federal dietary program.”

Nine contracts of $76,000 each ($684,000 total) were awarded to three separate non-profit organizations. Seven of those were to various chapters of Families Helping Families. The other two were awarded to Bayou Land Families and Northshore Families and each of the nine contract descriptions called for providing resources, direct support, materials, and training to families, educators and service providers of students with disabilities.

Sixty-eight contracts of $11,644 each ($791,792 total) were awarded to various churches in locations that were virtually impossible to determine to operate community-based tutorial programs from September 2008 through June 2009.

Others were simply eye-popping in their size and the description of services:

• $3.2 million to Catapult Learning, LLC to “provide high quality research-based professional development opportunities, materials, and services” that support schools, families, and students;

• $$558,000 to an architect for an environmental assessment for demolition of multiple schools in the New Orleans Recovery School District (RSD);

• $1 million for architectural services for construction of new schools and repair of existing schools;

• $1.5 million for demolition of an elementary school;

• $2.18 million for an architect to design bid documents for demolition of a school;

• $2.1 million for architectural services for school construction;

• $2.33 million for architectural services for school construction;

• $2.5 million for architectural services for school construction;

• $4.1 million for architectural services for school construction;

• $8.1 million for architectural services for construction of modular school sites for New Orleans RSD.

There were others, of course–hundreds and hundreds. Whether it is for workshops, presentations, keynote addresses, leadership training, meeting planners, redesign, enhancements, mentoring, if it can be imagined and justified, it would appear to be a candidate for funding of some description. With all the rhetoric about deficits and cutbacks to higher education and public health, the money still seems to flow freely through the labyrinth that is the Louisiana Department of Education.

And no one appears to be minding the store.

When the Louisiana Legislature convenes on April, lawmakers may wish to ask State School Superintendent Paul Pastorek some uncomfortable questions that go beyond the mere approval of RSD Superintendent Paul Vallas’s use of a state vehicle for a few dozen personal trips to Chicago.

Gov. Bobby Jindal, meanwhile, may wish to reprise Roemer’s plans for the Department of Education way back in ’87. Those plans, after all, were never implemented.

Posted in BESE, Campaign Contributions, Contract, Contracts, Education, Governor's Office, Transparency | 3 Comments »

Bad Corporate Citizens

January 7, 2011 by tomaswell

By John Sachs

Hypothetically speaking, what would you think if you read the following newspaper article?

Ruston, LA – The Mineral Ridge Development Commission announced that an agreement had been inked with HydroFrac, Inc., a Delaware corporation.

HydroFrac intends to drill a Sparta Aquifer water well in Lincoln Parish. The company will then pump 20 million gallons of water daily to supply the Haynesville Shale fracturing programs in Desoto, Caddo, and Bossier parishes utilizing retrofitted existing gas transmission pipelines.

Seven construction jobs and one permanent part-time maintenance job will result from this operation. To entice HydroFrac to locate in the Mineral Ridge area, 4 acres of industrial park land were donated, and a ten-year property tax and parish and school sales tax exemption on revenue generated from sales of water was granted. Projected ten- year cost to Lincoln Parish approximates $325 million.

Questions posed to HydroFrac with their responses follow:

1. Q: 20 million gallons of water taken from the Sparta Aquifer daily are more than we are told the aquifer can sustain. Current overuse primarily by paper mills in West Monroe and Hodge are already endangering the level and purity of the aquifer. Won’t your operation just add to the problem?

A: 71% of the Earth’s surface is covered by water. That equates to trillions of gallons of water. To imply that 20 million gallons would somehow put in jeopardy the earth’s supply of water is, frankly, foolish.

2. Q: You didn’t address my question. Please be more specific.

A: We have discussed our operations with Governor Jindal. He assures us that he is committed to providing a business-friendly environment, especially in light of our creating jobs in Louisiana. Governor Jindal personally contacted the State Water Resources Commission on our behalf and received assurances that the quantities of Sparta Aquifer water that we propose to extract will receive expedited approval.

3. Q: Again, you haven’t addressed my question, but I will move on. If, as experts on the subject have stated, your 20 million gallon per day extraction leads to salt water intrusion and the ultimate death of the Sparta Aquifer as the fresh water supply for a region populated by almost 1 million people, and their homes, farms, businesses, schools, churches and everything else dependent upon fresh water, what happens then?

A: This has already been discussed. The earth has adequate surface water to meet the demands you have noted. We don’t share your alarm concerning the Sparta Aquifer. The aquifer can recharge itself. with a few unseasonably wet years. You have Lakes D’Arbonne, Claiborne, and Caney and the Ouachita River to draw from in the interim. That water is pure and clean and probably should have been your primary source of fresh water all along. That leaves the pure aquifer water available to the paper mills to make cardboard boxes and beer cases.

4. Q: Why can’t the shale gas formations be fractured using the abundance of available salt water? That leaves the purest water for human consumption. As everyone knows, without abundant fresh water a society cannot exist. It absolutely, indisputably dies. Without a society, there is no need for gas. Water clearly comes before anything. To forget this fact is to drive the last nail in society’s coffin. Can’t you see this?

A: It is this very attitude that puts America’s safety and freedom from threats of foreign terrorism at risk. Constraints placed on the free enterprise system are what led to the disruptions on Wall Street, to less-than- ideal petroleum company profitability, to escalating health care costs, to high unemployment, and wars in Iraq and Afghanistan. Fortunately we have business-friendly Congressional representatives for this area who see past these alarmist, anti-business statements of concern They understand the value of a strong Congressional/private enterprise partnership.

Does this seem farfetched to you? It shouldn’t. This is what is happening to us. We have representatives, most of whom are well-intended, making pacts with greedy, insensitive, out-of-state headquartered corporations as described above. A few corporate top executives, probably living in Connecticut, won’t authorize spending the money to efficiently utilize and protect clean water, the earth’s most precious resource. Why? Because it MIGHT temporarily reduce their annual bonuses.

In the long run, it would pay great dividends to them and certainly to us whose very existence depends on the sustainability of the Sparta Aquifer. Proof of this is in El Dorado where good corporate citizens Lion Oil and Great Lakes Chemical built a steam cogeneration system over 10 years ago that increased profitability and saved approximately 3 million gallons per day of Sparta Aquifer water. That act alone fixed El Dorado’s water shortage problems.

Let’s welcome good corporate citizens, but banish bad ones. You know the difference. Insist that our representatives and responsible officials act NOW in the best interests of the vast majority, not the selfish interests of a select few.

Posted in Campaign Contributions, Transparency, Water Reservoirs | Leave a Comment »

A layman’s simplistic approach to taxation (Installment One)

January 1, 2011 by tomaswell

During the 1988 presidential race, Vice President George H.W. Bush proclaimed, “Read my lips: no new taxes!”

That famous line helped him defeat Michael Dukakis but when he was forced to back-track on that promise, it was his eventual undoing. Bill Clinton’s own pithy campaign slogan “It’s the economy, stupid” swept the Arkansas governor into the White House in 1992.

Now, 19 years later, Louisiana’s Governor seems determined not to repeat Bush’s mistake. Bobby Jindal doggedly clings to his stated refusal to consider new taxes—or even to reinstate repealed taxes—to help lift the state out of its current financial morass.

Ironically, his stubbornness to keep that promise could conceivably cause him problems in his own re-election bid if he and the legislature cannot work together find some alternate means of achieving financial solvency for the state.

The state will be facing a budgetary shortfall estimated at $1.6 billion when legislators convene at noon on April 25. They will have less than two months to come up with a way to keep the state afloat.

The crux of the problem is lawmakers’ propensity to spend one-time revenue on recurring expenses with no long-term plan for addressing future needs. Jindal has tossed out a plan to sell off state assets, including state buildings and two state-run prisons, but that would be a temporary Band-Aid at best. Likewise, his tentative proposal to draw against future State Lottery revenues would seem to be a desperation ploy that would do nothing to address fiscal problems in ensuing years.

Jindal’s reluctance to use the line-item veto to kill more than $500 million in spending on local projects like golf courses, councils on aging, baseball parks, tennis courts, court houses, and community centers, has done little to assuage the situation and in fact, makes him complicit in perpertrating the state’s current dilemma.

So, just where does that leave the state?

In a word, broke.

So, what are the alternatives?

How about hefty increases in the state’s tobacco tax?

How about comparable increases in alcohol taxes?

Together, they’re commonly referred to as sin taxes.

Louisiana currently taxes cigarettes at a rate of 36 cents per pack, which ranks 48th among the 50 states and 51st overall, when Guam ($3 per pack), District of Columbia ($2.50 per pack), and Puerto Rico ($2.23 per pack) are factored into the equation.

The national average is 99 cents per pack.

Only Virginia, a tobacco state, and Missouri tax cigarettes at a lower rate at 30 and 17 cents per pack, respectively. Even North Carolina, another tobacco producing state, taxes cigarettes at 45 cents per pack. South Carolina, likewise a big tobacco producer, held its cigarette tax down to a paltry 7 cents per pack until July 1, 2010, when it was raised to 57 cents.

New York, which until July 1, 2010, taxed cigarettes at $2.75 per pack, now has the highest rate in the nation at $4.35 per pack. But over-taxing any commodity can have adverse effects. Enterprising bootleggers need only go across the state line to Connecticut ($3 per pack) New Jersey ($2.70), New Hampshire ($1.78), or Pennsylvania ($1.60), return to New York, and sell them on the black market, thus depriving the state of untold millions of dollars.

Likewise, if Louisiana gets too greedy, a new, prohibitive tax of say, $1.50 per pack, might well drive Louisianians into Mississippi where the current tax is 68 cents per pack. But a tax of that amount would put the state on virtual equal footing with Texas, which imposes a tax of $1.41 per pack.

But just for the sake of argument, let’s say the legislature does man-up in this, an election year, and increase the tobacco tax to $1 per pack. What would that mean in terms of revenue, assuming the increase would not cause a corresponding decrease in the number of smokers and that citizens would not traverse the state line into Mississippi in search of cheaper smokes?

During the fiscal year 2008-2009, the last year for which figures are available, Louisiana collected almost $147.2 million in tobacco taxes, the third straight year of increases. At $1 per pack, the state would conceivably reap $407.2 million, a 176.6 percent increase. A tax of $1.50 per pack would kick that amount up to $613.3 million, barring a reduction in sales.

The Institute on Taxation and Economic Policy calls tobacco taxes both “regressive” and “declining”—regressive in that low-income smokers are the most adversely impacted, and declining because, it says, cigarette taxes are among the slowest-growing revenue sources available.

In 2006, the institute said in its 2007 policy brief, the state’s poorest smokers spent .6 percent of their income on cigarette taxes, 10 times the .06 percent spent by the wealthiest Louisiana smokers. Moreover, low-income Louisianans are more likely to smoke than higher-income taxpayers, the report said.

The same report said the state’s 36-cent-per-pack tax income will be static because the tax is not based on the retail price of cigarettes where tax revenues increase with price increases. Oddly, all 50 states have flat-rate cigarette taxes as opposed to basing them on a percentage of retail prices.

Another factor in the declining tax theory is the decrease in sales when cigarette taxes are increased. In fact, cigarette consumption by Louisianans has declined steadily over the past quarter-century, the report shows.

From a high of more than 600 million packs sold (about 132 packs per person) in 1982, sales plummeted to 410 million packs (91 packs per person) by 2005.

An increase in tobacco taxes, then, could serve as a double-edged sword: on the one hand, it might not produce a significant increase in revenue, but if it resulted in fewer people lighting up, the health benefits derived from the tax increase could be immeasurable with a lessening of the financial strain on the state’s charity hospitals.

Alcohol could be quite another story. Of the 50 states, Guam, Puerto Rico, and Washington D.C. only 12 have higher taxes on beer than Louisiana. On the other hand, only five of the 53 have lower taxes on liquor. Like tobacco, however, alcohol is taxed on the amount sold as opposed to basing the tax on a percentage of the retail price.

The Louisiana Department of Revenue reports that for Fiscal Year 2008-09, the state collected nearly $56.9 million in alcohol tax. The breakdown was $37.3 million on low-alcohol content (beer) and almost $19.6 million on high-alcohol (liquor) sales. Should the legislature decide to raise Louisiana’s liquor tax to the national average of $6.25 per gallon, it could mean an income of $49 million—more than double the present amount.

The solution, then, insofar as the state’s sin taxes are concerned, could be found not so much in an increase (though a modest increase in both tobacco and liquor taxes might well be in order) as a change to a rate based on the retail cost.

More simplistic revenue-producing suggestions from a non-CPA, non-financial analyst, layman perspective will follow in subsequent posts.

Posted in Budget, Economy, Golf Courses, Governor's Office, House, Senate, Legislature, Legislators, Revenue, Taxes | 2 Comments »

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