Budget continues progress in right-sizing LA govt

Not a lot of surprises emerged in Gov. Bobby Jindal’s budget, but what ones did come from the specifying of details after months of general discussion were good to see, and brought Jindal nearer to his stated desire to see smaller, more efficient state government.

This one as a whole shows a small net spending decline despite small forecast increases in both the state general fund and federal funds, because of a roughly one-tenth decline in dedicated fund revenues. “One-time” monies total around $230 million, below the $377.5 million increase in the general fund revenue forecast between this budgeted and the fiscal year after, significant because of the House of Representatives rule that requires a two-thirds instead of simple majority vote to use such funds if they total higher than the forecasted change. (If this fails, the budget would cut from health care expenditures.)

As far what was known to be coming, the Jindal Administration will hope to breach the education special interests whose support of the current way of doing things continue to shortchange Louisiana’s children, but since that aggregate spending amount largely is cordoned off from politics, all Jindal could do was say no increase would come to that amount beyond that necessary by formula – appropriate as the state continues to shed students in its public school systems, even as reforms previously taken show some hope in reversing that. Jindal’s proposal to increase vastly parental choice is not budgeted in, but past data suggest it could drop spending levels and produce outcomes as least as good.

Abolishing clemency powers unpardonable mistake

No doubt prefiled HB 85 by Democrat state Rep. Austin Badon is more political jab than serious policy, but the issue deserves a nontrivial hearing.

This bill would amend the Constitution to abolish the governor’s authority to issue pardons and would retain only the automatic pardon provision for first-time perpetrators of nonviolent crimes and some violent offenses. This would make Louisiana unique as the only state not to grant some kind of executive clemency power for nearly all state crimes; currently in 41 states governors, many requiring the recommendation of a board (such as Louisiana), and in nine states an executive board may exercise sweeping pardon powers.

Companion legislation filed by Badon, HB 84, would excise the state’s Board of Pardons, the imprimatur of which is necessary for a request to go to the governor. It also wipes out the governor’s power to commute sentences and to grant reprieves, along with the Board’s role in that process.

Desperately bad arguments against reform betray fear

Maybe now we know why the Louisiana State Employees Retirement System’s investment return barely beat that of a risk-free 30-year U.S. Treasury bond over the past five years – because its top officers aren’t very good critical thinkers, as evidenced by the sloppy, if not illogical, arguments they try to make against reforms proposed for the state’s retirement system for most of its non-education employees. Or maybe this display of intellectual piffle shows they're just desperate to stop an erosion of their power and privilege.

Gov. Bobby Jindal has proposed altering regulations regarding LASERS, one of the four state (major) retirement funds and which is responsible for about a third of the unfunded accrued liability taxpayers must face (inflated in no small part by its failure in recent years to achieve its stated target of an 8.25 percent rate of return on its roughly $10 billion investment portfolio). These would have current employees pay 11 percent rather than 8 percent of their pay into retirement (the private sector average is 18 percent), and calculate the value of their defined benefit pensions (which few in the private sector offer any more) on the average of their (usually last) five years instead of three, and in addition for future employees raise the retirement age for most jobs from 55 to 67 (matching the regular retirement age for Social Security), and enroll them in a defined contribution systems that acts like an individual retirement account (which most private sector employees now offer).

Dim bulb #1 is LASERS Executive Director Cindy Rougeou, who complained that these kinds of changes ultimately would constitute a change of provisions that “would violate the constitutional restriction against impairing existing benefits.” She further declares that, because LASERS is the only state system about which these kinds of changes have been contemplated, that these changes are not comprehensive enough to merit adoption, and she promises “protracted litigation” over the matter.

Higher admission criteria will fail without other reforms

The politics of demagoguery and putting of special interests first are coming home to roost for Louisiana as the day draws closer to the implementation of just one of many needed changes in its higher education delivery, in potentially setting the state up for failure. One hopes this serves as a wake-up call to implement needed others before the system takes a turn, reversing the small progress of the past few years, to even greater inefficiency and ineffectiveness.

Readers of this space have known that looming changes to admissions standards for baccalaureate-and-above institutions, beginning this fall and continuing through 2014, will reshape profoundly the landscape of higher education, forcing a significant shift in students and thereby resources from these institutions to community colleges. This will create more slack resources for the senior colleges although, theoretically, increased performance will come from the student body as a whole, as marginal students no longer would begin an academic career at a four-year university and have a better chance of degree completion.

Particularly affected will be the lowest performing universities, in terms of retention and graduation rates. During last year’s debate over the combining of Southern University New Orleans, the University of New Orleans, and Delgado Community College, this space pointed out the impending standards increase alone justified the effort.

Landrieu needs to lead, not pose, on spending issues

As noted in yesterday’s post, one challenge Louisiana must meet as it evolves towards a more effective and efficient indigent care system is dealing with mental health issues. This requires analysis and leadership rather than the posturing exemplified by New Orleans Mayor Mitch Landrieu.

Part of mid-year budget corrections involves the state reducing funding for indigent mental health care. As Medicaid funds from federal sources few recipients for this service, states pick up the bulk of this, and Louisiana, with its aberrant charity hospital system, until recent years funneled the vast bulk of its spending on this to those institutions or to nursing homes. With cuts now necessary until the end of this budget cycle, these hospitals must absorb the bulk of them, including disproportionately those in the care of the indigent mentally ill.

This upset Landrieu, who asserted an issue looming large for his administration was crime, and he noted correctly that less servicing of the indigent mentally ill increases crime and its costs. He called these cuts therefore counterproductive and implored Gov. Bobby Jindal generally and the Louisiana State University System specifically to reconsider them.

Painful cuts point out need to dismantle charity system

While mid-year budget corrections disrupt optimal planning, and Louisiana’s fiscal structure exacerbates the problem by shielding much, some low-priority areas, from reductions to force them upon very few and higher-priority areas of state government, the silver lining again is the opportunity for the exercise to accelerate beneficial reform – as one state legislator accidentally may have discovered.

To be implemented immediately, joining the rest of higher education and also other areas of health care provision, Louisiana’s charity hospital system for the remainder of the fiscal year will suffer cuts that officials predict will have a measurable impact on service provided to the indigent. These also will slice a few hundred jobs off of the state payroll.

State Rep. Joe Harrison seemed rather miffed that one such facility in his district, Houma’s Leonard J. Chabert Medical Center, would endure such belt-tightening, to the tune of 80 positions and $2.9 million less. He publicly announced he would investigate in the upcoming session to separate the facility from the Louisiana State University System that runs these hospitals and create its own independent district.