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6.5.15

Legislature better focus on budget, not on skirting rules



As the Louisiana Legislature embarks upon its version of spinning plates on top of poles, serious confusion stills reigns about just how procedurally this may be accomplished, to the detriment of success in this endeavor.



The metaphor refers to the House’s task in attempting to pass legislation beginning tomorrow allowing for budget construction next week. Part of the strategy relies upon scaling back tax breaks, and it is reported that “that it can trim tax breaks or temporarily end them with just a majority vote.” If that is being recounted accurately, there’s at least one serious problem with that strategy.



The Constitution flat out prohibits a permanent “repeal” of a tax exemption without a two-thirds majority vote of each chamber (and then would require gubernatorial assent, although a veto could be overridden by the same two-thirds majorities), but says nothing about a reduction of an exemption. Nor do a series of attorney general opinions, the latest relevant one 22 years old, address this specific question. For whatever reason, a numerically large faction of House members believe the concepts of “repeal” and “reduce” different enough that they can freelance the former having explicit addressing by the Constitution and the latter ignored by it, and by virtue of this not being mentioned in it specifically as an instance of requiring a supermajority to accomplish therefore defaults resolution of this issue to the typical simple majority rule.

5.5.15

LA retirement fund mergers, transparency necessary



If you thought that the idiocy that surrounded the horrific investment decisions made by Louisiana’s Municipal Police Employees Retirement System was bad, check out perhaps a worse case that argues more illustratively for system reform at all levels.



MPERS, which municipalities may participate in to have managed retirement investments to pay out in pensions for their law enforcement employees, gained infamy for its investments in questionable real estate and golf courses. A neglectful board trusted its administrator on these matters, who later was convicted of fraud, whose flights of fancy caused significant dollar losses to its portfolio, meaning higher costs to law enforcement agencies and, ultimately, to taxpayers.



But MPERS almost seems conservative on this account compared to the absurdities committed by the board and management of the New Orleans Fire Fighter and Pension Relief Fund. Among other “investments” made by this group, the agency that deals with the pensions of these public safety personnel in New Orleans, were buying golf courses and lending to a hotel, an office building, a garage, and to movie production companies. NOFF also went further in investing with an advisor who promised indefinite outsized returns now under investigation for what authorities equate to running a Ponzi scheme.

4.5.15

Far worse LA budget outlook if Medicaid reform absent



As long as quality is maintained in the provision of health care to the indigent, it’s not really important how taxpayers save money, it’s that they do.



At issue is a bill for legislative consideration, SB 109 by state Sen. Ronnie Johns, that would put into law efforts being made by Louisiana’s Department of Health and Hospitals to report information relative to the state’s Medicaid program. This bill, which is making its way smoothly through the process, specifically addresses making comparisons between the state’s prior use of a fee-for-service model that paid regardless of need or quality of service provided and its new model for the past three years, a managed capitation system called Bayou Health that has third party administrators making decisions about the suitability of a procedure and whether it would qualify for reimbursement.



DHH produces numbers that show quality of care, in terms of things such as patient access, is improving as a result. But last fall a Legislative Auditor’s report revealed that some of the data used were incomplete or were not independently audited, making such comparisons less certain. The difficulties came from the data for legacy Medicaid that could work for better comparisons just didn’t exist, and that insufficient resources were allocated for independent verification or even accurate reporting of some data-based conclusions, the latter of these DHH now has instituted protocols to address.

3.5.15

State senate tilt metaphoric to LA political change



A presumed legislative semi-rematch from 2011 serves as a microcosm of whether Louisiana Republicans fully consolidate their status as the majority party in the state, whether Democrats lapse into relevance only as a regional force based on ethnicity, and whether the political culture truly has transformed.



Last week Republican Beth Mizell, narrowly-defeated in 2011 against Democrat state Sen. Ben Nevers, announced she would have another go at that seat. That loss of around 400 votes took many by surprise, and not just because Nevers in his first try in 2003 had won without having to contest a runoff (the Republican, who polled only half of Nevers’ total, withdrew) and followed that up winning reelection unopposed in 2007, but because Democrats are burrowed in like ticks on a neglected dog in the epicenter of the district, Washington Parish.



Because of that, Mizell will not be a slam dunk to succeed the term-limited veteran legislator, who also served a term in the House prior to his Senate election. Almost certain to try to hang onto the seat for Democrats is Nevers’ successor, now himself term-limited in the House, state Rep. Harold Ritchie. Together, the two have served as the recent backbone of the Washington Parish part of the party; Ritchie’s wife Patsy serves on its executive committee, and his brother serves on the Bogalusa City Council, while Nevers’ political ally and confederate in trying to build a reservoir in the parish while having barely arms-length business relationships with the effort Charles Mizell (if there’s some kind of distant relationship between him and Beth Mizell’s late husband’s family, I don’t know of any, even if both are from Bogalusa), served as Bogalusa mayor.

30.4.15

Legislators must reject back door Medicaid expansion



Maybe the front door may seem closed, but the back door now is wide open for Louisiana health insurance ratepayers, out-of-pocket payers for hospital services, and taxpayers to see their health care costs increase as a result of Medicaid expansion by another name in the state.



HCR 75 by Speaker Chuck Kleckley, introduced on the final day of the session for such instruments, would establish a “hospital stabilization formula” by making an assessments on hospitals, which then in essence would be paid back through increased reimbursements. The need for these would come from an increased patient load under Medicaid expansion, with the assessment supposed to pay for the state’s portion under expansion, which begins at 5 percent in 2017 and then makes its way to 10 percent by 2020. The formula would begin on or before Apr. 1, 2016 if expansion is accepted by then, meaning for the first half of fiscal year 2017 there would be no assessment. Rural, small, and specialty hospitals, all of whom together don’t see much in the way of Medicaid business, would be exempt from the assessment.



Of course, there’s no free lunch, so somebody must pay for the assessment that matches the federal funds. And that would be you emptying your pocketbook for that. The amount owed by the state 2017 and after would end up from increased insurance premiums, increased retail costs to out-of-pocket payers, and from Louisiana taxpayers who fund insurance programs for state and local government employees and from the portion they pay in federal taxes that’s the federal match, because to afford their assessments hospitals simply will raise their costs of services and pass them along to insurers and others. The state estimates that in the FY 2017-26 period this would cost an extra $2 billion, even after removing out the alleged savings in reduced uncompensated care costs.

29.4.15

Legislators keep giving film industry its taxpayer fix



The only real conclusion observers could draw from the Louisiana Legislature’s initial attempt to reform its wasteful Motion Picture Investor Tax Credit is that it seems sacred and bound to continue keeping hooked its crack baby to the detriment of the state and its people.



The House Ways and Means Committee yesterday passed out three bills concerning the tax credit, which has crept up steadily in payout over the $200 million level in the past couple of years and has drawn concern because it returns less than a quarter of each dollar in taxpayer subsidies. The most ambitious and sensible bill of the bunch was state Rep. Lance HarrisHB 276, which would have capped the amount paid out to $50 million this calendar year and then reduce it annually to sunset in four years.



This one took the most fiscally sound approach by weaning the industry off taxpayer subsidization. The whole program sold over a decade ago on the idea that state support would last long enough to allow the industry to build a foothold that then allowed its natural advantages to flourish, such as more industry-friendly attitudes and lower human resources costs in Louisiana as opposed to Hollywood, and then wean away public money.

28.4.15

Limiting Caddo constable deputies appropriate



Legitimate questions about government waste and redundancy collide with electoral politics concerning the expanded ability of Caddo Parish constables to appoint and pay for deputies, all wrapped up in a bill authored by state Rep. Jim Morris.



HB 118 by Morris would reverse the authority granted to constables, who are elected, one each to one of 10 districts (one is the Shreveport City marshal position treated somewhat differently by statute) to appoint multiple deputies, provided as a result of legislation in 2012 by state Rep. Alan Seabaugh that passed the Legislature unanimously. Constables execute court orders by their district’s justice of the peace (City Court in the case of the marshal) and as a result of these duties, including things such as serving summons, executing writs, and taking bonds, do not have to have the required peace officer training that law enforcement officers in the state have generally, yet are allowed to make arrests and to have firearms.



Hatfield amazingly has 18 deputies (Caddo is only one of three parishes whose constables are allowed to have any at all) for his district of about 10,000 registered voters. While the law makes clear that these are part-time employees, some are full-time employees in other judicial agencies and some are constables from other districts (deputies do not have to reside in the district, unlike the constable), and Hatfield terms them as full-time employees. Morris questions the need for so many, and Caddo Sheriff Steve Prator feels unease with so many officers without required certified training out there, which would make for the third largest local law enforcement force in the parish.

27.4.15

Grand LA budget bargain seems increasingly elusive



As the regular session of the Louisiana Legislature continues, it seems more and more likely that worlds will collide concerning resolution of the fiscal year 2016 budget.



Last week, the Senate Finance Committee passed SB 177 by Sen. Robert Adley, which would put forth a constitutional amendment that would eliminate the state’s inventory tax credit by eliminating inventory’s taxation, as a result raising over $500 million that could go to reducing a shortfall in the $1.6 billion range. The problem is that this would cost local governments almost 80 percent of that and business the remainder, although Adley assured local governments that some way would be concocted to allow them to recapture that revenue but provided no details.



Gov. Bobby Jindal supports eliminating the credit that is refundable, but not the portion that is used to offset corporate income and franchise taxes. However, as it is a constitutional amendment, he has no direct impact on the bill’s passage, which requires a two-thirds vote in each chamber. He has promised retaliation on a strategy of suspending tax exemptions, which the Legislature can do by resolutions that he can’t veto by a two-thirds vote, by vetoing a budget that relies on them, but they can override that by a two-thirds vote.

26.4.15

Beneficial TOPS reform bill may not hurdle veto threat



Turns out that state Sens. Jack Donahue and Conrad Appel are cleverer than they look. The question is whether that’s enough to get Taylor Opportunity Program for Students reform past a doubting Gov. Bobby Jindal.



Donahue is the main author, with Appel, of SB 48, which would lock in TOPS awards at their academic year 2017 levels, after which the Legislature would have to affirm increases in that rate. This means that, under the 10 percent maximum now allowed annual increase in tuition for schools that meet performance targets and/or any future removal of legislative control over the raising of tuition beyond this level, tuition levels at schools can increase without the award level following suit, as now is the law. This effectively would cap TOPS costs at the level of next year’s costs for each school or substitute (such as a weighted average for nonpublic schools) that would vary only by the mix of students attending what schools.



Reading the bill in isolation, it would appear that instead of this outcome, it would create a gap between award and tuition that the student would have to cover through other means. But the interpretation above holds because of the way the law is written and the promulgated code associated with it. R.S. 17:3048.1(N) states that if insufficient money is present to fund all awards that then the Louisiana Student Financial Assistance Commission would establish criteria that decided who got awards, subject to the statute’s mandating usage of scores on the American College Test and expected family contribution (a federal government formula computed through the standards Free Application for Federal Student Aid process) as part of that. In other words, eligible applicants either get or do not get an award if not enough money is appropriated.

23.4.15

Exigency scare tactic should not distract in budgeting



Even as the announcement serves as a scare tactic, the possibility that the Louisiana State University System and perhaps others higher education systems or institutions in the state could declare partial or entire financial exigency could pave the way to helpful changes – or simply make the problem worse.



LSU System Pres. and LSU Chancellor F. King Alexander announced that the system’s Baton Rouge campus was putting together plans for financial exigency, a condition that allows an institution greater latitude in making decisions about programs or personnel as a result of adverse financial conditions. By way of example, the LSU System receives such authorization from its Board of Supervisors for any of the entire system, institutions within it, or academic units within an institution, after an institution’s leader consults with the faculty and petitions. This allows, for example, for a school to furlough, lay off, or even terminate contracts with faculty members prior to these ending or in the case of tenured individuals to bypass other for-cause requirements for their discharge.



Of course, Alexander did not have to tell the world that he had asked the institution to begin drawing up such plans, so that served as a public relations move more than anything else (affirming this primarily was a scare tactic by adding “We don't say that to scare people”). He piled on with the imaginary terrors by stating “You'll never get any more faculty” if declaring exigency and lamenting that, at budgeted levels without changes in current revenue-raising capacity for the state of which the Legislature is trying to alter, the taxpayer portion per LSU undergraduate student would drop to $660.