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16.6.11

Discredited information may serve to cost taxpayers

The intrigue surrounding the plan sale of Louisiana’s Preferred Provider Organization simultaneously keeps getting more convoluted and sillier, which provides considerable incentive for the Gov. Bobby Jindal Administration to move on it after the governor’s expected reelection this fall to the detriment of Louisiana’s employees, retirees, and taxpayers.

Jindal has proposed beginning in 2012 (as the state’s benefits system for its employees is moving to a calendar year for operation starting then) to get the state out of the business of running the PPO, which serves about a quarter of state employees. Only one other state even does this with the remainder doing what Louisiana does for the other three-quarters of its employees/retirees, offer either self-insured plans run by a third-party administrator, or have them offered completely in both financing and administration by a third party. The extra 150 or so employees to run the PPO cost the state an additional $10 million annually, and the plan itself consistently has seen its rates priced about five percent higher than those of competing comparable plans, costing employees, retirees, and taxpayers (because they fund the state’s match) more.

None of the savings, or one-time money, that would come from the plan sale were allocated into this upcoming year’s budget, and this contractual matter was one that needed only approval from the Joint Legislative Committee on the Budget if a contract was to be let. Nevertheless, it became a partisan lightning rod and a point of contention for those who put saving government jobs ahead of taxpayer’s money.

15.6.11

Last ditch try to stop reform plays on lawmaker vanity

Opponents of more efficient government refuse to go quietly in the waning days of the 2011 regular session of the Louisiana Legislature, in one instance trying one last move to reverse a policy defeat many years in the making with an appeal to pre-election legislator vanity.

On the surface, SB 207 by state Sen. Willie Mount primarily appears as a way to provide reporting on the implementation of the state’s nascent coordinated care network. As previously noted, such systems to provide care for the indigent exist commonly among the states and, when implemented correctly, do provide better care at reduced costs.

Presently, Louisiana operates under a much less efficient fee-for-service arrangement, which encourages quantity of provision over quality.

13.6.11

House tax cut version Trojan Horse for tax increases

So, you’re a political conservative who thinks government spends too much and absconds with more of what people earn than it should. Now what do you do when asked to choose between the dueling versions of state Sen. Rob Marionneaux’s SB 259? Both eliminate individual income taxes over 10 years, but, from the perspective of a Louisiana conservative, which should you favor?

The version already approved by the Senate begins the process a year earlier in 2013. It also includes corporate income taxes. But it also makes it all contingent on the Legislature’s willingness to take a document produced by Jan. 6, 2012 by a panel, which may contain either or both or revenue enhancements through the elimination of tax exemptions and/or spending cuts/efficiencies in state government, and make it binding by passing a concurrent resolution that forces the state to undertake these strategies.

Only the House Ways and Means Committee has dealt with it yet, but its version dispenses with the cuts, does not include corporate income taxation, and starts a year later. The panel stays but its conclusions would have no bearing on a process that automatically occurs.


Proponents of the Senate approach say this will put a plan in place to prevent crisis budgeting in the wake of revenues that, in the short term, will be lower as this source of taxation disappears and could tempt tax increases.

Shreveport film rebate strategy subverts development

As the Louisiana Legislature let slip away another opportunity to trim waste even as it battles to overcome a sparse revenue picture, it's instructive to review one of the most wasteful expenditures and to realize its reach extends beyond just the state level.

Under even less trying circumstances last year, no changes were made to the state's rebate program for filmmakers. Nor have the preceding year's typically disappointing statistics raised any desire in the Legislature to stop the insanity. But this is not the only government assistance of this fashion that movie-makers can get. Perhaps not wanting to be outdone by their colleagues at the state level, Shreveport politicians (and Caddo Parish lawmakers, for that matter) seem just as eager to throw away taxpayer dollars on dubious schemes that create opportunities for a few to follow their vanities but which do not provide more and wider spread economic development.

In 2009, the city announced rebates to two film producers for monies spent in Shreveport, about $138,000 on $5.4 million spent directly. These are considered rebates of sales taxes and represented about three percent of that total. They came about in 2009 when what was considered a disappointing 2008 for that kind of production made the city want to create a junior version of the state’s program.

Why from a fiscal standpoint is anybody’s guess. The state’s program is far more generous, so this means either Shreveport competes only against other Louisiana cities or can add very little incrementally as an incentive on top of those offered by the state to entice production as opposed to out-of-state competitors. As a result, we can expect this to have next-to-no impact, if any at all, and be a poor choice for tax dollar usage.

At least it’s not as bad as Louisiana’s program, where the state gets back in increased tax revenues only about a sixth of what it doles out, at last count costing state taxpayers $100 million extra (or the equivalent of 40 percent of the budget cuts to the state’s higher education system, or enough to assist about 3,000 more disabled Medicaid recipients per year). Or as bad as any other states’ program; as studies have show over the past 15 years not a single state incentive program, Louisiana’s included, has brought in more tax dollars that it shelled out.

That so many states and local governments have gotten into this racket makes the problem only worse, as they beggar each other in trying to woo all of these artists, increasing the corporate welfare transferred from taxpayers. Worst of all, it lowers the quality of what is getting made as the cost floor gets ratcheted down. The last thing we need are more Z-movies being made instead of students or the medically impoverished getting served.

But thinking about it at the local level, why is Shreveport subsidizing mostly out-of-state entities in a narrow band that adds about zero to local economic capacity? In the last year audited statistics are available, 2008, the city reaped nearly $110 million in sales taxes, so if 2009 replicates that figure, the figure given out represents about 0.125 percent of all sales taxes. So why didn’t the city just knock off a tenth of a percent on its general sales tax instead of such a narrowly-tailored credit? This broader-based tax relief would have spurred more increased economic activity than shoveling it all to a handful of individuals bent on self-actualization and skewing the local marketplace away from more productive uses of capital and the more useful jobs created by that.

So, if you’re a Shreveporter wanting his tax dollars stretched to cover things like servicing massive infrastructure debt, money-losing hotels and convention centers, declining airport services, closed parks, and the like, tough luck. But at least you can go rent yourself a movie made here and try to pick out all the locations. After all, the unemployed and underemployed have lots of time on their hands, and the disproportionately low-skill jobs that typify the Shreveport labor market leaves salaries where about all you can afford for entertainment is renting a flick.

12.6.11

Jindal veto, Legislature override serve each's interests

A week or so after the 67th anniversary of D-Day, Gov. Bobby Jindal looks set to suffer V-Day, or his need to cast a veto that may result in only the third successful override of a gubernatorial rejection under Louisiana’s 1974 Constitution.

The Legislature seems ready, willing, and able to assist him. After the Senate processed HB 591 by state Rep. Harold Ritchie in its unamended form, quickly with a speed seldom seen, got it hightailed over to the House for the speaker’s signature, back to the Senate for its president’s, and then zipped to the Governor’s Office within a short period of time (they actually have three days to do it) to start the clock on the governor’s portion of time dealing with the bill.


Art. III Sec. 18 deals with the procedure, meaning essentially in the next several hours he has to cast that veto or the bill becomes law.