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30.10.08

Still time for Jindal to act to cushion looming deficits

That the state may be looking at a shortfall of over $1 billion for 2009-10 is unfortunate. That to some degree this could have been mitigated is unquestioned. That it can be managed with a minimum of budgetary agony should not be doubted, if we start now.

It’s not like we weren’t warned, certainly often enough by this space. Under Gov. Kathleen Blanco, when it became apparent that federal disaster relief spending was going to fatten state coffers, the immediate impulse should have been to start bankrolling this bonanza in the Budget Stabilization Fund to the tune of $1 billion-plus a year. Instead, Blanco withdrew funds from it. At least Gov. Bobby Jindal didn’t buckle so badly to legislative demands when he had a shot to infuse money into it in 2008, but that he only dumped in the minimum showed a lack of foresight in planning. And here we are again, with a chance to put the entire projected surplus for 2007-08 into the fund.

Had these suggestions been followed which would have pushed the fund to $4 billion, for this upcoming fiscal year the entire projected deficit could have been withdrawn from the fund (a third may be taken every two years). This would have bought time for the 2008 tax cuts to kick in that will add hundreds of millions from increased economic activity to come to fruition. Regardless, it’s not too late to send the entire projected last year surplus to the fund where maybe it could support a third of this year’s projected deficit.

Besides better revenue management, spending also must be addressed. Given the state’s eccentric eligibility of funds reduction without extraordinary measures, health care is the single largest item by far where controls would have to be instituted. The looming crisis once again demonstrates that Louisiana must rid itself on a fixation for institutionalized solutions both for triage and long-term care. As regards the former, restructuring the health care system to move away from overwhelming dependence on state-owned facilities to provide indigent care will save funds. As regards the latter, putting more care into home- and community-based care by getting rid of the tremendous reliance on nursing homes to produce more efficient and effective solutions will save the state hundreds of millions of dollars.

The Jindal Administration obviously is acting correctly to identify areas of savings now, but it needs to be more proactive in seeking out reduced expenses and banking money. That the possibility exists that Democrats could control the majoritarian branches of the federal government come 2009 brings added urgency to the issue, since strict adherence to promises made by their presidential\al candidate Sen. Barack Obama will cause more economic difficulties. Padding the Budget Stabilization Fund and speeding up the restructuring of health care to reduce reliance on institutional care will help to cushion the blow.

29.10.08

Sham complaint completes Democrat election tactic

Louisiana Democrats are looking for a little election insurance by their complaints that there’s some sort of discrimination going on in dropping voters off rolls for failure to verify their information, part of a longer-term plan launched months ago where the charges have only political, not factual, bases

In front of a Louisiana legislative committee, a party operative claimed something fishy was going on, alleging something was amiss with a disproportionate elimination of “non-Republicans” from eligible voter rolls. After the books close for an election date, registrars are empowered to identify questionable registrations and ask for confirmation. If none is received, the doubted registration is cancelled.

The numbers, however, tell a different story. Statewide, the proportion of Democrats struck from the rolls was about 3.5 percent higher than their statewide proportion of the electorate, for Republicans it was about the same lower, and it was about identical for other and no party registrants. Certainly the allegation that “non-Republicans” were disproportionately struck was false, but had to be made to hide the partisan overtones of the complaint.

Accounting for the small difference for the two major parties, besides the obvious fact that, socioeconomically speaking, Democrats typically are on the lower end of the scale and therefore more likely to be transient, this time out the higher rate may be due to activities such as special interests running registration drives that had a high degree of questionable registration requests in the first place. Months ago, Louisiana Democrats tacitly approved of the efforts of Project Vote, affiliated with the radical Association for Community Reform Now (ACORN, once associated with Sen. Barack Obama prior to and early in his political career), and of another group allied with them called Voting is Power, to turn in as many new registrations as possible. Containing as many as a third bogus requests, the strategy was to overwhelm registrars in the hopes that it would dull efforts to challenge the less obvious questionable information to allow those who otherwise might be ineligible to vote to be eligible for mobilization and voting on election day. Alert registrars may have snuffed this strategy since the drives were targeted at signing up people who demographically typically register as Democrats.

(Where registrars choose to be alert, that is, this happens. It would be interesting to know how many challenges were attempted in Orleans Parish, a Democrat stronghold, where recently as many other urban parishes would routinely remove thousands of names in this process its registrar would remove just a handful. It’s also interesting to note that only since Secretary of State Jay Dardenne got into office have registrars begun much more aggressive checks. Why weren’t Democrats concerned about the process back when it hardly seemed to work?)

This incident is just the final part of the Democrat strategy – wink at the overburdening of registrars, then try to dissuade them from doing their jobs by crying about some mythical unfairness. This is what played out, and we should expect to see it replayed in the years to come.

28.10.08

Sustain Glover veto; find ways to make his budget realistic

In August, Shreveport City Councilman Bryan Wooley announced he had an idea to increase police pay and address retention concerns. The plan that evolved would produce raises that would create a salary compression in the middle ranks of the department while giving smaller raises throughout all ranks except chief. The plan passed at the last council meeting by a 4-3 vote.

But Mayor Cedric Glover vetoed the ordinance last week, meaning the Council’s meeting Tuesday provides an opportunity to override the veto. That would require a 5-2 margin. Glover and through his appointee Chief Henry Whitehorn have at various times have raised three objections to it.

One, that it is not a comprehensive effort including boosts in pay for firemen as well, doesn’t really matter. Wooley’s argument is that a crisis exists among police ranks in that once officers gain experience other jurisdictions with higher pay attract away these officers. Whitehorn disputes that this is much of a factor which is perhaps why he has said he will at some future point present his own plan for the police department without any rush, and perhaps this would be allied with a larger effort to cover all public safety personnel. But if retention is a problem, it’s better to address it sooner rather than later.

Another objection comes from the vetoed ordinance’s pay grade structure which causes the compression. That is, with little monetary reward for being promoted, upward personnel movement may be delayed or unsought in order for officers to retain benefits (such as increased flexibility in work schedules, both with the city and any contracting they do) realized by being senior officers in lower ranks. This could be solved by apportioning more equally the raises either by adding more to the upper ranks or shifting some from lower to higher ranks. However, the first approach would increase the amount of money committed, and the second to some extent would defeat the retention purpose of the raise.

There is some validity to this argument, although while it might slow progression within Shreveport ranks, it would not stop it and it could attract more experienced officers from outside the department. Adding money would solve for it but seems out as an option because it is based upon being financed from a shade under $2 million existing in budgted longevity pay that would be rolled into the new pay matrix and, most crucially, about $1.3 million left over from unfilled positions. Any additions would require cuts from other areas of the budget.

This is what Glover has argued, while Wooley insisted this pot of money can be used without any budget repercussions. But this approach would create bigger problems in the future. If the roughly 5 percent of authorized positions are cannibalized for the raise, then future hiring would require budget expansion. And it seems that if the city thinks 541 positions (plus 20 more if Glover’s budget plans are followed) are needed to protect adequately the city, then scalping these positions implies the police will be undermanned.

This is the most compelling reason why Glover’s veto should be upheld, the erasure of any flexibility for budgeting police force levels. Still, one could argue that if Glover wants to hire 20 additional officers, surely that request could be mutated into a smaller pay raise along Wooley’s lines for the other 541 spots.

Yet here lies the real tragedy of this issue. As I noted previously, the budget Glover has produced is, to be charitable, optimistic. Chances are, given the slowing national economy and fading of the Haynesville Shale bonanza, revenues will not even each their reduced levels and expenses could be higher. In other words, Glover vetoed the ordinance mainly because he knows it will be hard enough to meet his proposed budget with no room to shift any monies around because the cuts he threatened if the ordinance passed are likely to occur in some form even without its passage.

This raise simply never had a chance without deeper cuts being made in city services. That means the divisiveness generated around this issue – pitting officer vs. officer, elevating their hopes and then dashing them with different politicians blaming others for the failure – didn’t have to happen. While Wooley comes out best regardless of what happens – a champion of the police – the sad fact is Wooley either pushed the conflict precisely to score political points or, as the budget situation deteriorated from August to October, he lacked the political astuteness to know now was not the time to forge ahead with it because of the consequences of conflict.

For councilors who voted for the raise to compensate for this mistake, joined by Glover who needs to redeem himself for a budget that tests the boundaries of optimism, they need to find ways to chop the budget even further, taking the saved revenues and putting them into reserves. Thus, if things turn out as Glover hoped reserves will rise from their dangerously low levels, and if not there won’t be any mid-year budget crisis. A successful override would make this cooperation all the more imperative.

27.10.08

Glover's Shreveport budget papers over looming problems

Bossier City should take Shreveport’s cue and release its executive budget online prior to legislative consideration. Then again, if the news is as bad financially as it is for Shreveport that might discourage it.

The unambiguous message from Mayor Cedric Glover’s budget was Shreveport is ailing financially, encumbered by mistakes made in the past by some still with positions of power and authority in the city. Glover himself must shoulder some of the blame despite not being a city official from 1995 to 2006, as he often was point man in the Legislature for his predecessor Keith Hightower’s decisions, aided and abetted by some current members on the City Council, who have caused this condition.

Reading between the lines (which is what this space is all about) of the commentary provided by Glover in the document, one finds the indicators of the deterioration:

26.10.08

Long's "share," Obama's "spread" wealth equally immoral

I suppose it was inevitable ever since Louisiana Treasurer John Kennedy running for the Senate asserted that incumbent Sen. Mary Landrieu was the most liberal senator in the state’s history, given his attempts to tie Landrieu to her party’s presidential candidate Sen. Barack Obama, that somebody in the media would make a comparison between Obama and the senator Kennedy thinks was even more conservative than Landrieu, Huey Long. The acts reviewed in the article were good, but the conclusion missed the point.

The author argued that the “spread the wealth” concept that underlies Obama’s philosophy as he articulated to a potential voter now known as “Joe the plumber” differs from Long’s “Share Our Wealth” platform, insofar as Obama wants to raise direct taxes on upper-income individuals (while refusing to admit these would be passed in large part indirectly to all individuals) whereas Long not only supported those kinds policies but also wanted caps on personal wealth. Different verbiage also drew another observer to mistakenly proclaim that the two philosophies differed.

But a proper understanding of human beings, their behavior, and the genuine purposes of government shows the ideologies of Obama and Long are one and the same. Recall that any time government works to subvert the open and fair processes of a truly free market – one shielded from government interference that would distort the voluntary exchanges going on among households – inefficiencies are introduced that negatively impact every member of society by destroying potential productive wealth that would accrue to society as a whole. Further, the interference is a confiscation of property that has accrued to households through a moral process whereby resources go to those in proportion to their contributions to the overall wealth of society. Thus, to introduce this artificiality that in isolation itself is an immoral act, a moral justification must be found.

In general, there is widespread agreement that for some kinds of government activity there inherent purposes provide benefits that may justify the taking of the people’s resources – national defense being the most compelling. Even redistribution of wealth, as implied by both Long and Obama, can be justified as a moral activity when it is to those who through no fault of their own are unable to enjoy a minimal standard of living.

The problem is, the likes of Obama want government to do far more than these tasks because either they intellectually misunderstand the moral purpose of government or they disregard it in the pursuit of power and privilege. The “spread the wealth” idea is a classic example of such an error. To believe it is government’s job to spread wealth means one must not understand or admit to the fundamental truth of market exchanges; rather, it rests on the wholly mistaken notion that somehow it’s not “fair” that some have great wealth and others do not, that somehow the market is “rigged” by those who are better off to give advantages to some and not others perhaps in some systematic fashion, and that wealth levels are a result of “life’s lottery” instead of the ironclad rule that resources go to people on the basis of their contributions to society.

Of course, there is only one institution that has the ability to “rig” the market – and that is government itself. So if there is “unfairness” requiring “spread the wealth,” it is because government is too controlling of markets by levying too many taxes, issuing too many regulations, grating too many subsidies, and redistributing too much money – exactly the opposite of what Obama argues. So the deniers like Obama must come up with some bogeyman to deflect away from this verity and sustain their views – in his case, the wealthiest, most productive citizens who already pay for the majority of government operations.

So a proper understanding leads one to know that, despite their differing policies on the subject, Obama and Long’s views are one and the same: acceptance of confiscation of morally-obtained resources for the purposes of favoring certain interests that have no moral claim or justification for use of these resources. It is not unusual to have for the majority of American politicians (including Landrieu) exhibit the same attitude; the only thing atypical about it is that Obama and his ilk like the Democrat congressional leaders envision a higher level of violence against the people on this account than the norm.