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13.3.08

Session results showing reform attitude unentrenched

As Gov. Bobby Jindal is discovering, you can lead a legislator to decent legislation, but you just can’t make him pass it. Conniptions gushing from the Louisiana Legislature over the past few days hammer home this point.

In its second special session of the year devoted on this occasion to fiscal matters, the House adjusted Jindal’s desired spending priorities by shaving money off of assistance to higher education, paying down the state’s unfunded accrued liabilities when it could be done for less than 24 cents on the dollar, and by slicing money from bridge repair, in order to send it to rural roads desires that otherwise are not part of the state’s plan for transportation. Jindal apparently had to swallow these redirections for needed rural legislator votes to raise the state’s spending cap.

(A review of the Constitution lends credence to the belief that these nonrecurring expenses could not be used for one-time tax rebate relief. Given the ambiguity, it would be wise to amend the Constitution to allow precisely that. Even if it generally is not a good idea, the option still should be available.)

Then the Senate tacked on some (relatively) small extra expenses in order for Jindal’s proposal to allow tax deductions for private school tuition and home schooling to pass, making expenses of textbooks and school uniforms deductible for any family with children in any school. This was on top of the Senate already forcing Jindal not only to phase in his plan to redirect transportation revenues to transportation-only capital expenditures in order to eat away at a $14 billion backlog of transportation needs, but also in containing a trigger that would shunt these revenues into the general fund to be spent on any purpose if otherwise a deficit was estimated.

It could have been worse as complaints were had that the $137 million of the $1.088 billion nonrecurring fund surplus that were not dedicated to a specific highway project (not including bridges) would be decided by the Jindal Administration and there were moves to take some of that money and dedicate it to other projects not involving transportation. Naturally, this sentiment reflects legislative hypocrisy in that it fully is within the power of legislators to decide this on their own, but for political reasons they default that choice to the governor.

Additionally, the removal of the $30 million shows the same old mentality that has made the state an inefficient user of the people’s money: deciding state spending priorities more on the basis of politics than genuine statewide needs. This shortcoming could fixed if the state would lower taxes, declare itself out of the business of financing local government needs, and then invite local governments to raise taxes to fund their own projects.

If this is the only damage to Jindal’s plans – and it appears it will be – then the session like the previous one largely will be a qualified success. Still, the fact that legislators let politics in the areas of spending priorities interfere with better uses of those funds shows just how much work reformers have in getting the state to spend the people’s resources in the wisest possible fashion and in repudiating the idea that government exists primarily to enable cooperative activities rather than to redistribute wealth.

12.3.08

Vitter situation differs from Spitzer's; resignation unneeded

Some Louisiana Democrats and some media are trying to use calls for former Democrat New York Gov. Elliot Spitzer to resign (which he did) stemming from the revelations that he employed high-priced prostitutes to argue once again that Sen. David Vitter should resign from his post, almost a year after Republican Vitter acknowledged that he had committed a “serious sin” when his phone number was discovered among records of an alleged prostitution ring. Unless one is an absolutist about moral behavior for politicians, such a demand lacks logic and/or smacks of the politics of convenience.

State Democrat Executive Director and failed candidate for his party’s central committee Chris Whittington said that if Republican governors called upon Spitzer to resign, so should Vitter – an obvious shot not only at Vitter but a subtler one at Gov. Bobby Jindal since he sits on the executive committee that makes those statements. To review, Vitter said his behavior occurred several years ago, prior to his current position, on rare occasions, has never admitted to fornication, and never had been charged with any crime. Spitzer also has not been charged with a crime, has not admitted to fornicating, although his behavior has apparently been occurring for years, prior to and during his reign as governor, right up until at least a month ago.

If one believes elected officials must not have even a hint of scandal surrounding them, then one could argue both Vitter and Spitzer should resign – as well as the likes of Democrats Sen. Mary Landrieu and Rep. William Jefferson for crimes, respectively, alleged and indicted. But beyond this, frankly, absurdly moralistic view that assigns guilt without legal proof and fails to distinguish between policy-making and governance, a reasonable moral view shows big differences, and not just because Vitter appears to be a repented sinner and Spitzer isn’t.

Spitzer as governor is not just a policy-maker, but implementer as head of his state’s executive branch. As part of that, he must take care to see that the laws are faithfully executed and done so impartially and evenly. If he demonstrates that he personally is willing to bend the laws, or to act hypocritically and selectively in their execution, it calls into question his fitness to lead the state. (Worse, as attorney general prior to his becoming governor he also was in charge of enforcing these very laws.) Such behavior which demonstrates certain undesirable qualities directly impacts on how the state will be run, with the likelihood that those qualities get translated into practice. Resignation excises a practitioner of these qualities demonstrated to be ill for the polity.

Vitter, by contrast as a legislator, only makes law. If we are to judge fitness for office, the criterion here is the quality of those laws, or to put it differently, the prudence in his policy-making. You can have rascals in personal behavior in office but if they confine themselves to making policy, absent an absolutist position it’s hard to argue there is a moral basis that they are unfit to serve in office (which does not mean there isn’t a political basis to disqualify them: voters offended by their behavior and/or policy-making can throw them out of office at the next opportunity).

Legally, Spitzer has not been demonstrated as a known practitioner of hypocrisy and selectivity in execution since he has not admitted to any behavior corroborating that (and, personally, were he or Vitter ever to be proven legally to have committed a serious crime, then my view is serious lawbreakers should resign from office as a matter of moral fitness), so we cannot argue resignation was necessary on that basis alone – even if the fact that he did appears to be a tacit admission. However, it is another aspect of Spitzer’s behavior that elevates his behavior to such a suspicious level that resignation without legal knowledge he has engaged in behavior detrimental to the state made it entirely appropriate.

Just as in the affair of former New Jersey Gov. James McGreevey, what many either don’t realize or are trying to obscure for political reasons is the real problem in their behavior is not the sexual behavior presumed involved, but of the activities surrounding it that showed real disregard for the law if not its actual breaking. McGreevey’s real troubles came because he tried to bend rules to give somebody he claimed was his homosexual lover a government job, and ultimately this guy sued him for sexual harassment.

In Spitzer’s case, it seems federal surveillance showing Spitzer utilizing prostitution services is just the first shoe that dropped. The federal case seems to be more focused on illegal activity Spitzer may have engaged in to hide the transfers of money apparently necessary to finance his assumed sexual libertine lifestyle. This behavior directly affects the public trust and Vitter never has come close to being accused of doing anything like this.

Vitter is no less as effective a policy-maker as a result of his admission and never will be charged or proven as a serious lawbreaker over his matter. On that basis, his resignation would serve no purpose. But Spitzer, as the chief executive officer of New York, faces certain indictment regarding alleged behavior that drastically reduced his ability to effectively discharge the duties of his office in leading the state. For the good of the state, as a practical matter his resignation was appropriate and desirable to prevent a crisis in governing. Those who care to inform themselves about these cases and still maintain they are similar and should end similarly cloud their judgment with a lack of critical thinking and/or political motives.

10.3.08

Vote against cap beach then, for it now principled

Fifteen months ago it was Republicans in the Louisiana House of Representatives that complained about having, and eventually obstructed, a two-thirds override vote to allow the state by a Democrat governor to spend beyond its constitutional cap. Nine months ago they did the same, that time unsuccessfully. Now many are arguing to bust the cap in order for the state to spend a shade over a billion dollars on nonrecurring items supported by the Republican Gov. Bobby Jindal Administration, which have led some, including Democrat lawmakers, to accuse them of inconsistency. But such an accusation is entirely disingenuous and ignores the facts relevant to each situation.

In December, 2006, then-Gov. Democrat Kathleen Blanco called a special session on the heels of the latest Revenue Estimating Conference report that declared substantial nonrecurring and recurring surpluses; the former may be spent only on a narrow range of items that are capital/one-time in nature while the latter may be spent on any purpose. Her call provided for spending in both categories. Even though the call contained some worthy nonrecurring items similar to what Jindal has proposed for the current session, Republicans feared that since the cap breach could not be tied to a specific set of proposals that Blanco could shove through expenditures on recurring items they thought unwise. With over a third of the House’s membership Republican and most holding fast, the resolution never succeeded and Blanco’s spending never materialized.

In June, 2007 during the regular session it was a different story, in somewhat of a different way. The last stand made by the GOP legislators came not on the resolution to break the cap, but on the bill that would authorize borrowing for the capital outlay budget, also requiring a two-thirds majority which really had nothing to do with the cap. That vote was used as a bargaining chip to get Blanco to reduce spending on nonrecurring items. It failed, as she got it and the GOP put up no effort to block the resolution concerning the spending cap. As a result, much more dollars representing recurring commitments were voted into law, creating a budgetary headache for the state that the Jindal Administration will start dealing with during the regular session.

In March, 2008, Jindal’s legislative allies propose only dealing with the nonrecurring revenues, even if the call, loaded with the nonrecurring items, is broad enough to encompass the recurring surplus. Still, any popping of the cap by resolution would apply only to the nearly-past 2007-08 budget which runs until Jun. 30. So as long as legislative leaders are careful in their bills wordings and watchful to prevent anything that would spend money that is recurring in this present budget year from going anywhere, this means a vote lifting the cap will support only the one-time priorities identified by the administration.

Thus, one’s views on various spending cap scenarios past and present do not rely solely upon the attitude “where you stand depends on where you sit,” as one backwoods Democrat populist mistakenly put it. If you believe the state should spend money on prudent one-off purposes such as strengthening under-funded pensions, building needed roads and ports, and providing for coastal restoration, but don’t believe most if any new recurring commitments should be made, then a vote against cap-busting in 2006 is consistent with a vote for it in 2008. In other words, there is no irony in that those who were against it then but who now are for it are not necessarily acting out of convenience, but out of principle.

9.3.08

Jindal plans for nonrecurring surplus best for growth

As the special session on the (mostly nonrecurring) surplus begins in the Louisiana Legislature, it is worth noting that the call could allow for a variety of uses of the funds. Gov. Bobby Jindal is going to push for a largely sensible set of mostly spending priorities. But there are two other alternative uses which should be explored theoretically before deciding to spend it on nonrecurring items.

First, not politically popular but not a bad idea would be instead of putting the Constitutionally required portion (in this instance, $73 million) into the Budget Stabilization Fund (i.e., the “rainy day fund”), to put it all, over a billion dollars, there. The Jindal Administration has warned that budget shortfalls are a distinct possibility after next year, so the money could be sequestered and used in, say (according to law), two of the next four years, plus it would generate a healthy amount of interest, perhaps $100 million, over that span.

However, the risk in doing this is that it may provide a false sense of security to lawmakers in the future, encouraging them to make up deficits with it instead of making different spending choices. Even the Jindal Administration is not immune from falling into this trap; for example, in the regular budget coming during the regular session $60 million is added to nursing home reimbursement when in fact simple changes in those standards to approximate other states’ rules would save Louisiana nearly $100 million a year.

The other option, again focusing only on the nonrecurring funds, would be to distribute the billion or so dollars as one-time rebates to taxpayers. (Since these are not recurring monies, they cannot be used for a permanent cut in taxes such as by reducing marginal rates.) By itself, this idea has considerable appeal – if government has taken too much of the people’s money to finance current activities, then why not give it back to its rightful owners?

But in a larger context, it’s not as good of an idea. First, if the purpose of letting people keep more of what they earn (besides its inherent morality) is to promote economic growth, that is accomplished through supply-side activities – working, saving, and investing – not through demand-side priming; typically, a “bonus” of the kind a rebate is does not stimulate these activities but is spent in ways that don’t encourage productivity or wealth creation. Second, while a largely ineffective idea of promoting economic growth at the national level, they are even less effective when isolated to the state level.

Nonetheless, this is still a good idea even if not nearly as effective as cuts in marginal tax rates – until you compare the small good that would come from that with the larger good being served where the proposed spending is to go. Addressing about three percent of total roads needs, saving $297.5 million in unfunded pension costs before 2029 (about a fortieth of the outstanding balance), and making a down payment of $300 million on coastal restoration when at least $10 billion more will be needed (fortunately for the state, much coming from the federal government) – in the long run, these uses among others will provide greater economic development benefits than a one-off rebate.

If proponents of giving the people’s money back to them are serious about the issue of greater economic development during this session, they will talk about using the almost billion dollars in declared recurring surplus funds most of which is intended to be dealt with (except for cutting business taxes and tax deductions for tuition and other education expenses) during the regular session – legislation doing so permitted by the call. Economic realities suggest that the spending priorities for the nonrecurring funds advanced by the Jindal Administration will lead to better economic growth than the alternatives of “saving” it all or giving it all back as a “bonus” to taxpayers.

After primaries, Scalise, Jenkins still favorites to win

All four party primaries for the 1st and 6th House Districts in Louisiana could have been settled without an April runoff. Instead, some close calls mean each district still will have elections then.

Concerning the First, the only real question was whether state Sen. Steve Scalise could be stopped and, given just a pair of token candidates in the Democratic primary, thereby forcing any balloting at all in the district next month. Whoever wins the GOP primary will win the district, and Scalise seemed the only candidate that could win outright. As it was, he came close but got forced into a runoff picking up only 48 percent of the vote. State Rep. Tim Burns beat out Slidell Mayor Ben Morris largely on his ability to finish second on the south shore and win on the north shore, even in St. Tammany Parish. But Scalise’s close third places on the north shore and crushing south shore wins will make it almost impossible to beat him in April.

Two subplots engaged in the Sixth. On the Republican side, whether former state Rep. Louis “Woody” Jenkins could win outright was answered when he missed it by 84 votes, pending provisional ballots. Jenkins consistently rolled up half the vote in every parish and it will be interesting to see in runner-up Laurinda Calongne will contest the runoff as odds are incredibly stacked against her that she could win. Unless she is hoping for a miracle, expect a withdrawal, but that means a contest still will happen in this district in April.

This is because as for the Democrats, state Rep. Don Cazayoux proved the strongest with 35 percent and will face in April state Rep. Michael Jackson who got 27 percent. The crucial margin for Cazayoux may have come from non-Democrats who are permitted to vote in this party’s primaries, as whites who register as no party (independent) typically vote at substantially higher rates than blacks of the same registration.

Whether that will translate into a victory remains to be seen. Black candidates picked up 46 percent of the vote and the next highest white candidate former gubernatorial staffer Andy Kopplin got most of his votes in East Baton Rouge. From Pointe Coupee, Cazayoux might not inspire enough passion among those voters while Jackson is sure to sweep up black votes regardless, especially in his home East Baton Rouge.

The larger implications are that Scalise almost certainly will be the new congressman from the First, while Jenkins will be almost as certain a winner in the Sixth should Jackson be able to overtake Cazayoux. If that doesn’t happen, Jenkins’ chances of winning drop to slightly better than even.