Blanco new tax strategy: they are all for "health care"

As bad as Gov. Kathleen Blanco’s logic has been in arguing for all sorts of tax increases, her way of going about it has made even less sense – and for more hypocrisy.

To review, first she links an increased revenue source, higher cigarette taxes, based on an activity tied into health concerns, on a teacher’s raise. It’s a tax increase that would affect a minority and is based on voluntary usage. But then for health care, she comes up with a much broader-based tax which is much less voluntary in nature, as in one form or another it will be passed on to consumers and ratepayers. She then strikes first with the second tax, instead of the intrinsically easier tax to pass (because it affects fewer people on a voluntary basis).

It would seem to make more sense to go for the easier one first, but several considerations came into play. First, the sick tax had the support of a portion of those being taxed, because they see the opportunity not only to pick up more federal funds with it but also because they know they can palm off much of tax increase (indirectly) on consumers. Second, health care is considered a much more pressing need that raising the salaries of underperforming educators. Third, as illogical as it is to connect smoking to education raises, it’s even more perverse to connect hospital revenues to these raises.

Gutless Republicans allow me to claim I called it

I hate to say I called it, but …. HB 80 did pass on Wednesday, with Rep. Peppi Bruneau pulling one out of his hat. The original vote had 69, one short, favorable but, for some reason, Bruneau wasn’t among the “yeas” (counted as “absent”). As the bill’s author, he could and did ask for reconsideration (actually, the second such time on this bill) and got two more “yeas.”

(Concerning the vote several days ago, the “yeas” picked up the absent Reps. Regina Barrow, Cedric Glover, Herman Hill, Lelon Kenney, Arthur Morell, Loulan Pitre, and Roy Quezaire, but lost to absent votes himself, Roy Burrell, William Daniel, and Jalilia Jefferson-Bullock. He picked up “nays” switching to “yeas” Reps. Carl Crane. Sydney Mae Durand, Troy Hebert, Willie Hunter, John Smith, and Karen St. Germain. However, previous supporters Reps. Bryant Hammett, Juan LaFonta, Mert Smiley, and Taylor Townsend jumped ship on this vote.)

It was more complicated than just him switching, for some absentees returned and others who had been present left. He naturally went from “absent” to “yea,” as, to their shame, did Reps. Burrell, Avon Honey, and Derrick Shepherd (even as he prepares to take his Senate seat). Reps. Tim Burns, Karen Carter, Jefferson-Bullock, and Pete Schneider went from “absent” to “nay,” and Bruneau’s win (our loss) came because he had two previous supporters, Reps. Durand and Kennard went missing and John Smith actually switched to “nay” (becoming the only double-jumper).

The bill now goes to the Senate where perhaps this body will make the necessary amendments to improve the bill … but don’t hold your breath on that. If so, then it would be in the hands of the people whether to add this to our Constitution (since the govenor does not have any say over proposed amendments.

That officer does, however, on taxes, and Bruneau's coup wasn’t as impressive as Gov. Kathleen Blanco’s efforts to pick off GOP support to get the HB 887 “sick tax” passed. With 37 of the Republican persuasion in the House, she needed at least three defectors (because of the two-thirds requirement to raise taxes) assuming total Democrat support – and got 10: Republican Reps. Crane, Hollis Downs, Nita Hutter, Ronnie Johns, Chuck Kleckley, Charlie Lancaster, Danny Martiny, Tom McVea, Tank Powell, and Joe Toomy all broke from the state party’s stated position to vote against the tax, more than enough to provide a margin against Democrat defectors Daniel and Hebert, and absent Democrats Hoppy Hopkins, Romo Romero, and Derrick Shepherd (guess she couldn’t meet his price) while benefiting from the missing GOP Rep. Mike Walsworth.

It should be another dogfight in the Senate but if Blanco can get there over a quarter of Republicans again to defect, health care consumers better ready themselves to get the shaft, unless, as opponents have argued, the measure violates federal standards. And if she can work the same magic with the cigarette tax bill (which she must do so almost immediately with the legislative session having just two weeks and three budgets to go), it’ll be gutless Republicans that would give her a win here, too.

Dispatch of ethics reform prelude to term extension?

I wish this sounded far-fetched, but could it be that the rejection of SB 82 sets the stage for the revival of HB 80?

The Senate bill by Jay Dardenne, which would have banned entirely commercial ticket gifts to legislators, died a coward’s death in the House and Governmental Affairs Committee when four members, by accident or design, were absent from the hearings on the bill. Rep. Billy Montgomery moved to vote on the bill but Rep. Jeff Arnold substituted in a motion to table (which takes precedence). A vote to table would have been forthcoming – if anybody had objected, which one would think the previous motioner Montgomery would.

His memorable response, which any crafty future electoral opponents of his would be wise to tie endlessly to him: “I don’t want to make anybody vote.” Thus the vote never came, and the measure effectively is dead. It also demonstrates Montgomery’s request had been fishing for a way to get the bill tabled – had it been genuine, he would have objected.

But credit committee chairman Rep. Charlie Lancaster (who with Montgomery complained months ago that the present monetary limit on ticket gifts was too low) about for the parliamentary wherewithal to know when to arrange an optimal time to put a minimum of the committee’s members (five voting ones being a quorum) on the record. Those absent were asked (by the ever-inquisitive Robert Travis Scott) about their whereabouts:

Rep. M.J. "Mert" Smiley, R-St. Amant, said he left the room to make "an important phone call." Rep. Loulan Pitre Jr., R-Cut Off, said he had to meet for a few moments down the hall with a senator. Rep. Jalila Jefferson-Bullock, D-New Orleans, was absent, dealing with one of her own bills in another committee. Rep. Juan LaFonta, D-New Orleans, said he was out checking on one of his bills about to be heard in another committee room. "It wasn't one of those conveniently timed walks," LaFonta said later, asserting that he wanted to vote against the Dardenne bill.

Those others who were there were Reps. Rick Gallot and Peppi Bruneau. And, who knows, with free tickets (even if still “too cheap” by Lancaster’s and Montgomery’s standards) still out there as an incentive to remain in office, maybe this will entice a few extra House members to vote for Bruneau’s HB 80, the stalled bill that does something laudable, but at too high of a price.

That bill would amend the Constitution to set state elections concurrent with federal ones in presidential election years. This would have salutary effects for democracy (but note that, at present, no costs savings would be realized unless RS 18:402, because of Art. IV Sec. 3 and Art. III Sec. 5 of the Constitution is changed, to put at least the primary election on the first Tuesday after the first Monday in November).

But the bill also provides that an extra year gets put on current terms. Just as the cost-savings argument at present is a diversionary tactic, so is the argument that this extension must be done to avoid the stricture that terms cannot be reduced in the Constitution. Since this is an amendment to it, this can change terms by whatever way it likes, with perhaps the best way making the current term three years to catch onto the 2006 elections, and then another two-year term until 2008 (with language that would clarify the term limits restriction).

Best of all, perhaps the “extra” year could be exchanged for terms limits applied not merely to the present office held, but any legislative office. That would prevent term-limited guys like Montgomery who are thinking about switching houses from doing so.

HB 80 got a clear majority but fell a few votes short of the two-thirds level necessary to be presented to voters as an amendment (and it still would need Senate passage). It sits on the calendar, waiting for an opportunity for Bruneau to put it back in play. Please, not without the proper amendments outlined above; the death of SB 82 is more than enough of the “good-old-boy” treatment for one session.

Hightower tells taxpayers, "tough luck."

What is to Shreveport Mayor Keith Hightower to have removed from Shreveport taxpayers another few hundred thousand dollars a year? Even though it has been debated for months, now that it appears a contract to build the convention center hotel will be signed soon (which will come in millions above the predicted price or will reduce size of quality, either of which ultimately will reduce revenues), the question of whether the property will have to pay property taxes has come to the forefront.

The answer from the start has been it is taxable. That was the assumption within the only study made which assessed the economic viability of the project – a study that showed the hotel would operate at a big loss whose results Hightower unilaterally changed without the authors’ permission.

Sensibly, Caddo Assessor Charles Hennington has asked for a legal opinion on the matter. Ultimately, the question turns on government’s role concerning “economic development.” A public building used for a governmental purpose apparently qualifies.

But if government is supposed create the conditions for economic development, not actually perform economic development, then the designation of this hotel as nontaxable is questionable. In fact, the Louisiana Constitution grants a home rule entity such a Shreveport the opportunity to do anything not denied by the state.

However, while Shreveport’s charter claims to possess powers not specifically listed in it, none of the charter powers in Article 2 listed for the city permit direct “economic development” by the city. So the question is whether a public building leased to a private entity that competes with other private entities constitutes an attempt to create economic development that is approved by a general, unspecified charter power by Shreveport.

Common sense would imply a negative answer to this question. By contrast, we can review the example used by Hightower to argue for the tax exemption, that being the Cypress Bend Golf Resort which was granted such an exemption. Yet surely Hightower can see the difference between the hotel and this. The resort complex is 12 miles from Many with no hotel or (especially) golf course within miles. The convention center hotel will have half a dozen hotels within a half-dozen blocks. There’s no competition in Sabine for locations around Toledo Bend, a state park, whereas Hightower is asking to place a competitor institution slightly closer than others to something that is a municipal concern.

Or, to restate the question, do we give government a tax break when it tries to create conditions for economic development to be taken advantage of by the private sector, as opposed to when it emulates and competes with the private sector to directly attempt to generate economic development, given that the tax break gives it an advantage over the private sector?

Still, the question about whether this property will be taxable pales to the reaction of Hightower about the whole affair: “We won't have to tap into the budget, but it certainly would cut into the bottom line operating profit,” he said. This shows that Hightower lives in a fantasy world concerning the project. The Tech study showed there would be an operating profit only if one could justify taking out the property taxes; there is probably no “profit” if property taxes are assessed. Simply, Hightower doesn’t care about whether this project is good for Shreveport, he just wants to get it going because he can muscle it through. The larger question is, of course, why he would want to put taxpayers on the hook?

Cigarette tax imbecility makes college faculty look bad

Usually, a columnist doesn’t concern himself with whatever other columnists write. But I always make an exception when it’s stuff from people associated with academia. And it is time to make another exception with the long-time head of Louisiana Tech’s Journalism Department Wiley Hilburn’s latest missive.

In part, this is self defense because, frankly, I don’t want anybody who reads his latest edition to think that everybody who teaches in Louisiana universities are so unable to make a coherent or logical argument as he demonstrates here. Let’s take this exercise in anti-intellectualism point by point:

What does surprise me is state Republican support, formal and official, for tobacco. We can only assume any lawmaker, Republican or Democrat, voting against Gov. Kathleen Blanco's $1 a pack cigarette tax is pro-tobacco.

So I guess Hilburn would agree with me that we can assume anybody who supports abortion is pro-murder? No, I actually wouldn’t argue that because some people do not have the wisdom of, or perhaps are afraid to embrace, the truth that the unborn are human beings. There are some who labor under the illusion that abortion is a “liberty” to be exercised without regard to a “lump” chock full of human DNA with basic autonomic functions, evidence of simple thinking, and all the potential to fully develop (and has a soul), so they are able to distinguish in their minds the difference between abortion and other forms of murder.

But by his own testimony, Hilburn would take the position I reject. What he seems incapable of understanding is that there are large principles involved. Personally, I’m against smoking, have supported measures to restrict it, and would not be averse to a cigarette tax where the proceeds of it address the health problems it creates, not some activity to which it bears no logical relation. But the more basic principle here is people’s liberty to prevent government from taking their resources except only for great, necessary purposes which otherwise cannot be undertaken. Clearly, the cigarette tax as currently constituted does not meet these criteria.

Hilburn seems totally oblivious to this fact; by his logic, the “evil” of smoking is so overwhelming that any purpose for which the taxes raised from it is legitimate and overrides whatever principle may lie behind its purpose. Therefore, I suppose Hilburn would authorize its proceeds to fund various things such as pro-life organizations (just like these license plates), state-subsidized Ku Klux Klan cookouts, and government organized death squads against journalists.

Hilburn does kind of realize he needs to provide some justification for the tax, and trumpets the tax that will give raises “to our long-suffering teachers, school bus drivers and cafeteria workers.” (Note that he leaves out one category of beneficiaries – college professors. Hilburn is a college professor. You make the inference. For the record, I oppose any tax increase which raises my salary as a college professor.) Then we get these fantastic sentences:

A $3,500 raise would merely allow north Louisiana teachers to stay in the profession they love. And we, public and parents, will get better teachers with better pay.

Note the contradiction between these sentences. In the first, the raise “permits” teachers to stay teaching who we assume are of a certain quality. But in the very next sentence we are told teaching is going to be “better” as a result of the raises. In other words, at first we talk about keeping people because they supposedly are “quality” teachers, but then we say the raise automatically makes them higher quality teachers?

No doubt higher salaries will keep those who have other options from leaving, and others who might have gone elsewhere would stay. But what about the vast majority who are performing (more precisely, underperforming) currently in the system to whom a raise who have no impact on their career plans? Suddenly their teaching becomes so much better because they make more money? There’s no logic to this whatsoever, which is why the only way teachers should be given raises in this state (that is, extra raises on top of their automatic annual raises) is if they also attach to them a true teacher accountability system. Otherwise, we throw good money after bad in many cases.

Then Hilburn simply goes off the deep end:

More pay for teachers is the best investment, the best economic development deed we can do for Louisiana. And the teacher pay raise, if we tax killer-smoke, will have a vast multiplier effect on the north Louisiana economy. Teachers making more money will buy more houses, more franchise food, more cars, more washing machines, more real estate, more television sets, more life insurance, even more cigarettes.

Obviously, Hilburn never will be mistaken for an economist or even someone with common sense on economics. According to Hilburn’s logic, the way to really spur economic growth, if it comes about by government taxing and redistributing, is to tax everybody 100 percent and then redistribute what gets left over into government-sanctioned jobs and salaries. Maybe Hilburn doesn’t remember what happened prior to 1991 in the world, so to remind him, a number of states across the globe until then tried this approach – it’s called communism. And it didn’t work, and it doesn’t work even when we try it on a smaller scale in America because of the natural inefficiencies in how government uses resources and how the private sector does. Optimal economic growth occurs precisely because government stays out of the marketplace as much as possible, not through its wholesale intervention by expropriating people’s resources and then redistributing them.

On behalf of college faculty in the state, I want to apologize that somebody who holds faculty rank actually associates his name with the drivel printed under Hilburn’s name. Many of us are not idiots, and I don’t want the citizens of this state to think “why should we give college faculty raises, or even support higher education, if there is such ignorance being taught” as is represented in Hilburn’s column.

"Magic bullet" sick tax ready to slay consumers

This shapes up to be a big week in Louisiana politics – will business as usual or will a new tone of sensible, people-oriented fiscal policy prevail in the battle over the state’s next budget? The first battle in the war between these ideologies may come over health care – but not in the way many anticipated.

It appears that, after a lot of talk otherwise, Gov. Kathleen Blanco has thrown her lot in the “business as usual” crowd. No greater indicator of this can be her abandonment of trying to reform the health care fiscal structure of the state in order to use existing funds more efficiently in favor of embracing the same old tax-and-spend strategy that lies behind a 1.5 percent tax on hospital revenues.

The “magic” behind all of this is that “the cost of this fee or includ[ing] the fee as an
itemized and separately listed amount on any statement” cannot be “sent to any patient,
responsible party, insurer, or self-insured employer program.” In other words, it’s the old “somebody else pays for it” dodge that is a myth. Let me assure you, consumers of health care will pay for it. One way would be to jack up expenses for procedures, but if government reimbursement rates won’t allow for that (for those places that have any – specialty hospitals who deal with private-pay only don’t have to follow them), there are plenty of ancillaries on which costs will rise (ever look at a hospital bill and notice how much dressings, saline, toilet paper, etc. costs?).

And it will happen. Why it is not supposed to happen is that the federal government is supposed to reimburse more than what hospitals pay out (note however that Louisiana citizens also pay federal taxes to support this). But that is in the aggregate – many hospitals, including all of the specialty ones, will receive less in reimbursements than they pay out in the tax. They will have to find creative ways to shift the additional cost of doing business that the tax creates onto the shoulders of patients, insurers (who pass it on to consumers), etc. or else they have to scale back operations, reducing the availability of health care. Either Blanco’s plan makes health care more expensive or reduces its provision, directly contradicting the bill’s stated purpose to “Preserve and enhance the availability of inpatient and outpatient hospital care for all patients.”

Legislative Republicans have got it right when they say the state needs to learn to make priorities and spend efficiently, rather than looking for another group to roll for more money. If the House GOP stands firm on this bill, they have the numbers to force Blanco to think this way, too.