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15.6.06

Legislature takes credit but does nothing for consumers

A half a loaf usually is better than none at all, but whether Louisiana consumers got half a loaf is debatable in the Legislature’s machination regarding SB 474 to ameliorate the negative effects of HB 685.

HB 685, now Act 313 of the 2006 Regular Session, would commit the state’s gas distributors to make sure that at least two percent of their product is in ethanol when its production rises above 50 million gallons a year, no later than six months after. The problem is the cost of making the ethanol vastly exceeds now and for the foreseeable future will exceed that of gasoline processing, as well potentially cause environmental hazards.

A sweetheart deal between Gov. Kathleen Blanco and Agriculture Sec. Bob Odom said Odom, in charge of most aspects of the new law, would not implement it unless the price of ethanol production roughly was equivalent to that of pure gasoline. But this gave Odom so much discretion in an unenforceable way that it did little to assuage consumers’ fears.

So, in an amendment attached to HB 454, the Legislature attempted to put into statute a requirement that the new law would go into effect only after the price of ethanol was no more than 10 cents a gallon more expensive over pure gasoline over a 90-day average, even if after the 50 million gallon standard had been reached. The state Senate still must agree to the change, rather strayed from the bill’s original intent, but no doubt Blanco would sign it.

As previously noted, the arrangement between Blanco and Odom could work out well politically for both. Blanco appears to have done something meaningful to please consumers, even if it isn’t, and threw a bone to agricultural and environmental interests, while Odom gets more regulatory power than ever, helps out his friends, and no doubt will find a way to declare ethanol prices meet the proposed standards as quickly as possible, even if they do not. The Legislature now joins this credit-taking parade by arguing it gave force to a measure to save consumers money.

However, its effort hardly carries more substance than the handshake agreement. It doesn’t restrict Odom’s discretion in the matter; a serious attempt to protect consumers would have specified legally in great detail how the determination of the price band would occur.

If the Legislature really had meant business, if it really wanted to do something substantive rather than symbolic, it would have repealed Act 313. But I guess that’s too much to ask if you want to please a few special interests and fool the rest of the public. Once again, it’s Louisianans that suffer at the hands of the state’s government.

14.6.06

Montgomery alienates conservatives with recent vote record

Current state Rep. Billy Montgomery has all but shouted from the rooftops that he wants to run for state Senate District 37 in 2007, given his term-limited status of his current position (as is the current Sen. Max Malone). Speculation is that Montgomery would switch registration to the Republican Party in pursuit of the position.

Yet if that’s Montgomery’s intent, or even if he doesn’t do that but wants to appear more conservative to voters in that, perhaps in the entire state, most conservative district, he is picking a questionable strategy in regards to his committee votes. In the last seven months, on pieces of legislation both symbolic and substantive, he has cast votes that either will anger conservatives, or has avoided them altogether that allowed legislation objectionable to conservatives to go forward. Some examples:

  • In the 2005 First Extraordinary Session, with Montgomery’s help HB 59, which allowed some people without positive identification to vote in upcoming elections, squeaked out of the House and Governmental Affairs Committee 5-4.
  • Later, during floor debate Montgomery argued a vote for the bill in committee did not mean being in favor of fraud, he opposed an amendment that passed that further tightened ballot security, but then helped the defeat the bill.
  • A short while later, his was the decisive vote in House and Governmental Affairs for HB 14 which would have set up the wasteful satellite voting centers.
  • A couple of days later on the floor, Montgomery wobbled back, offering an amendment to HB 14 which effectively did what he had opposed three months earlier, which passed even as the bill foundered.
  • A day later, its companion SB 22 hit the committee and got out on a party-line vote of Democrats 5-4 – except for the absent Montgomery. That was the one that made it into law; Montgomery could have stopped it there by being present with a “no” vote.
  • This session, HB 641 extended and expanded satellite voting provisions. It passed the committee 5-4, with Montgomery absent; again, Montgomery could have stopped it by being present with a “no” vote.
    HB 428 would have amended to constitution to provide term-limits to all state executive elected officials. Montgomery sided with opponents 5-5 to stop it.
  • He also cast the crucial committee vote for HB 927 which would have Louisiana potentially commit to supporting in the Electoral College the national popular vote winner rather than the selection of the people of Louisiana.

    Even when Montgomery got it right he managed to fudge. On HB 562 this session, which would give the people a veto power of legislators’ salary increases, he moved in committee for its adoption, but expressed reservations about whether it would be better as a statute rather than in its proposed form of a constitutional amendment (and he voted for it obviously, even as it failed). However, that would gut the entire purpose of the bill; legislators already increase their salaries by majorities, so it would be no trouble for them at all first to repeal the law and then vote the increase which could still bypass the people.

    In most of these instances he joined a majority of, if not achieving unanimous support of, all Democrats in his vote (which is reflected in his being tied for second-most liberal/populist member of the House in 2005 according to the Louisiana Legislature Log). That partisanship also will not endear conservative voters in that district, and would make it seem any party conversion more one of convenience that a genuine expression of his issue preferences and political philosophy.
  • 13.6.06

    Blanco and/or Odom win on ethanol bill, Louisiana loses

    When understanding why Gov. Kathleen Blanco does what she does in office, never forget that the need to accumulate power tops her list of motivations. She needs it to help her favored constituencies, and if she’s got some extra she might actually use it to benefit the state as a whole, but it all starts with power acquisition.

    This helps to explain why she signed HB 685 and the way in which she did it. This bill mandates that state gasoline retailers, after a certain point, have two percent of their sales comprised on ethanol. Presently, this guarantees a price increase to Louisiana consumers.

    Benefits from this bill politically for her could be less reliance on imported oil, maybe better environmental conditions through fewer hydrocarbon emissions, a bounty to agriculture producers and, just maybe in time for the 2007 elections, lower gas prices. This increases her standing among environmentalists, agricultural interests, and maybe even consumers.

    But, as we know the lower prices are unlikely to occur within the next year, if ever, a price tag to the bill that would overwhelm any benefits in the minds of most voters. So, Blanco had to find a make it appear that she would be responsible for any benefits that come from the bill, but not for the costs.

    The perfect opportunity presented itself with “making” Agriculture Secretary Bob Odom sign an unenforceable pledge that will have no effect on the law’s working that the law will not go into effect unless the price of gasoline with ethanol falls below that of pure gasoline. This gives Odom free reign to issue regulations governing a wide range of aspects concerning implementation of the law. But it also gives Blanco a chance, if as probable the ethanol-blend price remains above that of pure gasoline for the foreseeable future, to wash her hands of the consequences and shift any blame publicly to Odom.

    Like Blanco, Odom also thinks primarily in power acquisition. This regime gives him more power but with the risk that he could be perceived as the one to blame if prices go up. They will, but Odom also is smart enough of a politician to be able to find a way to finesse the situation to his advantage, which is to subsidize agricultural interests that maintain him in office while not becoming enough of a lightning rod for consumer anger. In the way he’ll get the regulations written, he’ll find a way to implement the law by claiming prices are lower yet the objective, valid situation will be they are actually higher.

    Blanco may end up making her political opponent Odom look bad, one reason why she made this deal. However, Odom may avoid that and could turn the tables on her by succeeding with it and increasing his power relative to hers, a reason for him to accept the deal. Most likely both could win, with Blanco taking all sorts of credit while Odom fools enough people on the pricing issue to aid his favored constituency, even as their power struggle continues without either gaining significant advantage on this issue over the other.

    If that ends up the case, there’s another thing we can’t forget about politics in general – there are winners and losers in political conflict. If Blanco and Odom win that means, as so often has happened under the tutelage of these political hacks, Louisianans lose.

    12.6.06

    State rosy budget picture masks long-term problems

    As the progress of both the state’s operating and capital budgets shows, the good news about financial bonuses coming through this spring is a fiscal crisis from the hurricane disasters of 2005 has been averted, for now. The bad news is this merely papers over the structural problems inherent to Louisiana’s spending habits.

    The conditions have allowed a lot of goodies to be tossed into the operating budget. But as state Rep. Jim Tucker astutely observes, these take all the impetus out of breaking the state of its inefficient spending habits often geared more towards satisfying special interests rather than fulfilling the needs of the entire state, in terms of the widest range of individuals specifically benefiting and that is gets done at lowest cost to the taxpayer.

    A case in point is the state’s incredible over-reliance on long-term care in institutions rather than in the community. A restructuring of the system towards the opposite a couple of years ago was calculated to save nearly $100 million, and would provide better targeted, more appropriate care.

    Instead, last year Gov. Kathleen Blanco briefly broached the matter then abandoned it, and nary a peep has come out this year about it. In fact, the state continues to move in the direction of inefficiency; SB 613 by state Sen. Sherri Smith Cheek which essentially would take the wasteful existing reimbursement formula for nursing homes for long-term care and institutionalize it into law inexorably is making its way into law without drawing a single vote in opposition to this point.

    Nursing home operators claim doing so would bring more financial predictability to their operations, making it easier to obtain private sector financing. But I’m sure any business sector (especially one which gets 85 percent of its revenues from the state to the tune of about $800 million) would love such guarantees rather than have to compete in the marketplace against more efficient alternatives, yet the state doesn’t oblige them. This bill serves only as a shield to better protect this industry, at the expense of the taxpayer.

    Situations like this riddle the budget, and bring back memories of a decade ago when the Republican Congress set about slashing taxes and the rate of growth of government spending through welfare reform and other measures (over vetoes of Pres. Bill Clinton) that produced an economic boom in Louisiana and elsewhere. But instead of taking advantage of the situation to slim down without pain, then-Republican Gov. Mike Foster and a compliant Democrat Legislature changed things little so a few years later budget problems returned and the structural problem of inefficient spending and misplaced priorities, which if solved would prevent these reoccurrences, continued.

    Blanco and her Democrat leaders in the Legislature are following the same path; the same mistakes being repeated again. Will it take Republicans residing in the Governor’s Mansion and controlling the Legislature after 2007 to change this?