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29.9.22

LA college reform, not more spending, needed

It’s good to review occasionally the condition of Louisiana’s higher education funding, as the interest group Public Affairs Research Council did recently, especially trenchant with the ambitious master plan adopted by the Board of Regents three years ago. But to understand best policy, you have to ask the right questions.

The PAR note on financing trends observes how means of finance have changed since 2005. Back then, almost 60 percent came from the state general fund and dedications, while only about a third tuition and fees supplied. Last year, the proportions basically had shifted. Meanwhile, only in the past couple of years has financing in total dollars surpassed the previous high mark in 2008.

This doesn’t bode well for the master plan, which seeks to increase over a third the proportion of Louisianans with a college degree in 2018 by 2030, if it’s assumed more money must be thrown at the problem to achieve the goal. In its summation, PAR also repeats some of the usual talking points without proper context that seem to indict the state’s contribution, that it “struggles” with funding higher education, that its appropriations per student ranks among the lowest in the country and southern region, and that to offset the reset since 2008 tuition has gone up by about three-quarters.

28.9.22

Processing tax swap for personal income tax fails

Like herpes, the bad idea of an oil processing tax, shilled forever by Democrat Public Service Commissioner Foster Campbell, just keeps coming back.

Campbell kept his mouth shut about it, the idea of levying a tax on each barrel of oil refined, for the last six years. He recently brought it back as discussion has taken place among some lawmakers to eliminate Louisiana’s state individual income tax, with his suggestion of swapping the two (not a new idea of his).

Currently, the state levies a severance tax on oil taken from the ground (including its territorial waters), which presumably is refined in the state. But that comprises only (in 2021) 34.7 million annually, compared to the 873.6 million processed (Campbell spouts the ratio of 49:1 total to state oil processed, but the actual figure is more like 25:1). So, assuming today’s West Texas Intermediate crude price of about $82 a barrel, around 0.073 percent a barrel will get you to the $4.3 billion hole that would be created – discounting dynamic effects that would spur the economy to increase tax collections in other forms – by lopping off the individual income tax.

27.9.22

LPSC must prevent deal from gouging ratepayers

For many Louisiana ratepayers, their cost of electricity could go unnecessarily higher unless the Public Service Commission stays vigilant and doesn’t lapse into following political fashion.

Last week, the body gave final approval to Entergy Louisiana, which outside of its separate New Orleans entity provides electricity for almost all of the state except for its western-most parts, to incorporate up to 475 MW of power from four solar producers, one of which it will own and three from which it will buy. This alone, set to come online fully in mid-2023, will triple existing solar and wind generation capacity within the state, which at present accounts for just about two percent of total generation, the lowest among the 50 states.

That paucity isn’t a bad thing. In part, it allows the state to have relatively low residential rates with high consumption, although overall consumption is driven by industry. Although geography can cause significant individual fluctuations, overall renewable forms of energy cost much more to produce for a variety of reasons, including transmission, its non-dispatchable form, and necessity of dispatchable backup. Over time, as the portfolio of energy tilts more in the direction of greater portion of renewable energy, the more extra ratepayers must shell out as compared to use of fossil fuels.

26.9.22

End of kid jab mandate points to needed reform

With no fanfare, Democrat Gov. John Bel Edwards’ Louisiana Department of Health formally repealed its needless and counterproductive Wuhan coronavirus vaccination requirement for school children, ending a controversy that it never should have started.

Even this was botched. It appeared in the September Louisiana Register that details changes to administrative law, weeks after school had started which subjected children as young as toddlers to the burden. That’s because it was put in the works in May, just after an attempt by the Republican-led Legislature to cancel it, and the excuse Edwards then gave for choosing that timing – that the state kept waiting on full authorization for its use from the federal government – if really the main reason would have been timed better to allow the rule to become final prior to the beginning of classes.

But, because of that publicity, likely almost every school district in the state didn’t press the issue last month – except Orleans Parish, which, along with a very few and Democrat-run districts nationwide, stubbornly kept it in place. Fortunately, state law also allows families to opt out their children, which will blunt the impact of the directive.

25.9.22

BC backhands attempt at fiscal responsibility

Again, it’s only $36,000, but it’s also illustrative of what happens when government elites take the people’s money to rule in their interests, not the people’s, and the bad fiscal consequences that entails.

Last week, the Bossier City Council approved a three-year contract at that sum per year to pay existing contractor Todd Killen to run the Bossier Tennis Center. Those duties include giving lessons, conducting clinics, running tournaments and leagues, and offering repairs and merchandise, all together necessitating the hiring of employees, while the city picks up operating and maintenance costs of the facility.

During the final consideration of the ordinance, Republican Councilor Chris Smith noted that in comparison with typical area contracts of this nature that these have provisions such as a requirement for fundraising and diversion of part of fees remitted to local government as a reserve for capital expenditures. The contract in question had neither, and he asked whether these could be included.

22.9.22

Implement needed big rate hike for state's insurer

Louisianans shouldn’t subsidize the living choices of some, at least not to the extent suggested by special interests trying to ensure they can make a few more bucks.

Next month, the state Department of Insurance will approve new rates for Louisiana Citizens Property Insurance Corporation, the state-run insurer of last resort. Because of storm activity over the past year or so, the numbers of properties enrolled in it has tripled to 114,000 as private insurers exit or won’t write policies in particular areas, especially south of Interstates 10/12. This has caused a proposed dramatic surge in the rate requested, an average 63 percent hike for 2023.

That has led a group of real estate agents in New Orleans to call upon Republican Insurance Commissioner Jim Donelon, who not only sits on the Citizens’ board that asked for the increase but also gives final approval after actuarial study to a rate thus determined, to scale back the increase as it could cause a significant financial burden to homeowners. A group spokesman claims there’s no need for changing rates now and insinuated that taxpayers should eat at least some of the reserves collected because that “is the reason why government exists. Citizens is a nonprofit.”

21.9.22

LA poised to have most congressional power ever

Even those who would vote against him in Louisiana’s Fourth Congressional District should be pleased with certain dual reelections of Bossier City Republican Rep. Mike Johnson, which along with the extremely likely reelection of the First District’s Metairie GOP Rep. Steve Scalise will bring power unseen in history to the state’s congressional delegation.

No one filed to run against Johnson in the Nov. 8 election, automatically reelecting him. Scalise picked up only token opposition that makes him overwhelmingly likely to retain his seat. Yet as importantly it’s just as probable as a Scalise win that Republicans will retake the House of Representatives, bringing Louisiana great clout because of the pair’s leadership positions.

Parties in Congress have a formal leadership structure diffused by a parallel system of party committees. In the GOP, Scalise ranks below only California’s Rep. Kevin McCarthy, who is overwhelmingly likely to become the Speaker of the House in early 2023, so Scalise would assume the majority leader’s position as second-in-command. Johnson is vice chairman of the Republican Conference, the organization of all party members that makes decisions regarding leadership and committee spots, formally appointing McCarthy, Scalise, Johnson, and other officials.

20.9.22

Nungesser false assertions outed on national TV

Trying to salvage his decision last week not to hold New Orleans accountable to the rule of law, Louisiana Republican Lt. Gov. Billy Nungesser exposed to a national television audience the hypocritical, if not disingenuous, half-baked rationales he and others had employed.

Appearing on Fox News this past Sunday, Nungesser fielded questions about the issue, where the State Bond Commission after two previous tries finally approved a $39 million non-cash line of credit, termed Priority 5 (P5) funding, for the quasi-state agency New Orleans Sewerage and Water Board to build a new power plant that could increase the reliability of pumps operating to prevent flooding. Two months previously, it had authorized the another $32.7 million in actual cash, termed Priority 1 (P1) funding, for the project towards the eventual total $106 million cost.

But it had refused the P5 amount because a couple of weeks earlier the New Orleans City Council passed a resolution declaring that the city wouldn’t dedicate resources towards investigating allegations of illegal abortions provided, under a newly-enacted state law that severely limits the practice, unless incident to another allegation of law-breaking. Nungesser’s representative at the time joined others in the refusal, and would do so again the next month. At the time, the majority noted that the P5 amount wouldn’t become relevant for many months and any actual cash wouldn’t be disbursed until later in 2023 – if at all, as the Legislature could choose not to reauthorize project funding. In the meantime, the postponement would give the city a chance to provide an adequate explanation for picking and choosing which laws it would make a good faith effort to enforce, if not reconsider and rescind its official declaration.

19.9.22

Unprincipled GOP members sell out on rule of law

If you find yourself in a situation where you have to defend what you think you hold dear by pointing a gun, unless you’re willing to use it not only do you fail to protect but you also invite more threatening behavior. It’s a lesson many Republican Louisiana statewide elected officials – including two running for governor next year – and legislative leaders could learn, citizens discovered to their dismay at the latest State Bond Commission meeting.

Last week, the panel again took up the matter of issuing a $39 million line of credit to the New Orleans Sewerage and Water Board to finance flood protection measures. The previous two months majorities – at first all or representatives of Republicans Atty. Gen. Jeff Landry, Lt. Gov. Billy Nungesser, Treas. John Schroder, Sec. of State Kyle Ardoin, House Speaker Clay Schexnayder, and Sen. Pres. Page Cortez, plus appointees of Schexnayder and Cortez, voted not to advance the item because of a controversial official decision made by New Orleans.

This took the form of a City Council resolution explaining a decision essentially only when committed in the presence of law enforcement to enforce the state’s ban on almost all abortions. It pledged not to devote any city resources to investigating reports of abortion occurring except when incident to another alleged offense. The GOP SBC attendees at first unanimously held it up, pending further explanation by the city that it would investigate all reported instances.

18.9.22

Overcome liberal populism to nix LA income tax

The biggest obstacle in Louisiana eliminating the individual income tax isn’t so much the mechanism as the punitive and redistributive attitude from the state’s populist political culture that lays behind the current perverse system that will have to be overcome to trigger the necessary dramatic changes.

Last week, the House of Representatives launched hearings into the matter, as an approach to shed the problematic aspects of the current tax regime. The best, most effective taxation system has fairness, adequacy, simplicity, transparency, and administrative ease, criteria on which Louisiana’s largely falls well short mostly due to its progressive nature amplified by numerous exceptions and special treatments.

Specific to individual income taxation, it’s not very fair because relatively few people pay the vast bulk of these taxes. Hit six figures in adjusted gross income and that 15 percent of filers pays 63 percent of the total, but the 59 percent who stay under $40,000 pays a measly 10 percent. Nor does the current regime appear to be too adequate since many years this century the state seems to have a funding crisis – although this also depends upon spending priorities which in some instances seem quite questionable.