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21.4.11

Unlike others, fiscal bill treats only symptom, not disease

State Rep. Brett Geymann’s HB 189 provokes an interesting argument about a somewhat questionable state practice, but in that respect, and imperfectly, only tries to treat the symptom, not the disease that direly needs addressing.

The bill would require a two-thirds supermajority in each chamber of the Louisiana Legislature to allow for use in operating budgets of “one-time” money, which the bill defines as money going into any special Treasury fund (that is, not the general fund) not forecasted to go there previously by the Revenue Estimating Conference (which applies to several large revenue streams but not to many small funds collecting taxes and fees for specific purposes) or money that that REC declares as recurring yet originates from one-time transactions, such as “court settlements, the sale of state facilities, and the privatization of state operations.”

From the start, the bill contains a conceptual flaw with its overbroad definition of “one-time.”

20.4.11

Caddo school changes finally begin necessary reforms

Yesterday Caddo Parish School District Superintendent Gerald Dawkins got approved to run the parish's school for two more years although with no pay raise. Perhaps the "Vision 2020" plan recently approved by the Caddo Parish School Board that also extended his contract proved decisive here, as through it Dawkins finally decided rearranging deck chairs isn’t enough with the radical realignment program for the hemorrhaging district to save money - even as that only partially fits the bill.

The plan, which closes and consolidates a number of schools, finally acknowledges that doing less with more will not keep the district financially viable. As of the 2008-09 school year, the district had 42,610 students, a decrease of 8 percent from 1999-2000, even as district revenues increased almost 45 percent to $447 million, per pupil spending rose about 16 percent to $9,511, and average teacher salary jumped 17 percent to $47,191 during that span.

But it wasn’t just the hollowing out of the system that compelled to this restructuring.

19.4.11

Report confirms wastefulness of LA media tax credits

Stopped clocks are right twice a day, and even though generally they place greater priority on spending for spending’s sake rather than in setting priorities, promoting efficiency, and right-sizing government, the collectivists arguing for more tax increases that would cause even fewer people to pull the wagon with increasingly more people on it are right about one thing: the state tax credit giveaways to film, theater, sound, and interactive media are a waste bar none.

Every couple of years the Louisiana’s Department of Economic Development comes out with a report on the impact of those credits, with the latest attempt being unveiled yesterday. It’s always the same song and dance that breathlessly is publicized, focusing mainly on film since about 99 percent of the credits dispersed are in that area – jobs created (in film by the latest 2009 computations, assuming all activity is as a result of the credits, about 4,471), economic impact in varying degrees of directness ($592.6 million), and economic value generated for each dollar in credits ($5.59).

But hidden in the report, and what you never hear from the LED propagandists and their allies in the industry, because it’s required by the law that is the report’s impetus, is the tax dollars, local and state, actually generated by the credits and how much the credits cost.

18.4.11

Bill unreasonably pumps too much from taxpayers


While laudatory with its emphasis on providing more and better options to encourage improved health among children, HB 313 by state Rep. Scott Simon places too many demands on taxpayers when much less expensive and disruptive solutions are available.

This bill would mandate that state buildings, exclusive of those for elementary and secondary education at the local level, must provide a private room with ample electricity and plumbing to allow breast pumping for women. Unfortunately, it is a solution that could cost taxpayers potentially millions of dollars in renovation costs now, and extra costs in future building, searching for an essentially nonexistent problem.

It’s helpful to understand what’s involved in this issue. First, note that Louisiana Revised Statutes 51:2247.1 essentially gives a nursing mother the right to breastfeed in any public accommodation in a manner not segregated from the rest of the public. Of the minority of women who breastfeed, the majority already enjoy this protection and need no special rooms for their ability to enjoy it. Thus, clients in state buildings or their employees who can have their babies brought into the workplace, even just during lunch hour, need no special room.

17.4.11

Merge LA retirement systems to improve performance

At least some progress has come at the poster child for problems with Louisiana’s retirement systems, the Municipal Police Employees Retirement System, has taken and looks to take other steps to rein in the potential for abuse of retiree and taxpayer dollars. But risk unnecessarily exists unless more drastic changes make their way into law.

As previously noted, MPERS launched questionable investment strategies and compounded with lax oversight controls created a situation that accelerated poor financial performance and allowed siphoning off additional funds to fraud. As a result, retirees from almost all municipal police forces in the state draw lower pensions and taxpayers must pony up more money and/or forgo increased service to compensate.

To date a trio of bills, SB 2 by state Sen. Elbert Guillory, HB 426 by state Rep. Chuck Kleckley and HB 332 by state Rep. Kevin Pearson, seek to address fundamental shortcomings in managing the funds designed for state employees. Kleckley’s bill addresses three of the four major funds by adding state executive branch representation, while Pearson’s alters of the composition of MPERS trustees specifically and Guillory’s addresses the same for the small Registrars of Voters Employees' Retirement System, adding the potential for much more informed and professional management.

Still, it’s not enough at getting at the root of the problem. Part of the breakdown at MPERS came because the trustees, with the exception of ex-oficio members the chairmen of the respective House and Senate Retirement Committees who rarely attended trustees meetings, were all current or retired officers with little background in finance. Adding the executive branch officers can provide more sunshine and opportunities to interject expertise into governance, but appointed representatives still would predominate. At MPERS, it was this majority of trustees that approved implementation of unsound managerial practices in the first place.

But related to the potential for inexpert majorities to make unwise decisions is Louisiana simply has too many separate retirement systems. Besides the four major “state” systems, there are the nine other “statewide” systems (such as MPERS) and then 20 designed for specific local jurisdictions. All having separate boards of trustees and only the four state systems at present with any formal state executive branch presence (under the jurisdiction of the state treasurer), it creates a lot of appointed positions but little guaranteed expertise.

Much better would be to dramatically reduce the number of systems, perhaps even to the minimum of one as practiced in Maine and Hawai’i. It may not have to be even that low, as similar-sized states neighboring Mississippi and Oregon have only four, while larger Wisconsin has just three and much bigger Ohio has six and New York nine.

There seems to be no logical reason to have so many systems separated out as they currently exist in the state, other than decades ago as state and local agencies agreed with the advantages of offering retirement benefits to their employees these systems came into being in piecemeal fashion. Are the investment objectives, given their specific kinds of employment, so different among registrars’ employees, municipal police employees, and employees of most state agencies? Why cannot a single board invest on behalf of all?

Having fewer systems means fewer boards with inexpert trustees and the reduced possibility of their activities escaping oversight. It also increases investment options by having larger pools of assets to put to work and limits the impact that bad investments can make. True reform of the structure of retirement systems in Louisiana would consolidate the many systems into a very few and putting board membership policies into place that would maximize oversight and professional management – making a repeat of what happened at MPERS over the past dozen years much less likely.