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2.8.12

To lower LA high sales tax rate, undo Stelly plan leftover

The invaluable Tax Foundation’s latest report on sales taxes placed Louisiana in the third-highest spot for combined state/local rates, having only the 38th ranked state rate but the highest weighed local rate. In fact, in a sense, the state rate is both not high enough and too high, courtesy of the remaining part of an unwise constitutional change almost a decade ago.

While lower rates in any form of taxation are preferred, taxation itself is a necessary crime of theft in order for government to operate. But if we are to allow government to take our property, the general immorality of that is mitigated by making sure the burden is borne equitably by making sure it is done the most efficiently – in the manner that is least costly and most likely to encourage economic development that therefore brings wealth to all who contribute by their participation in creating that wealth. That is, nobody should be under- or over-taxed relative to their contributions to societal wealth creation.

Unfortunately, Louisiana’s present system violates efficiency rules. Most egregious at the state level is its refusal to collect from a broad base with undifferentiated rates. Its income tax is graduated and pockmarked with exceptions, while its sales tax exempts certain considered essential commodities and is subject to various tax-free calendar dates (such as the one this coming weekend). This distorts collection through avoidance strategies and wastes resources in pursuance of those strategies. Particularly with the sales tax, it misses opportunities to collect more without dampening economic development by ignoring the elasticity of taxable goods, and with income taxes it discourages investment and encourages debt.

1.8.12

Bernhard return should worry Democrats, Dardenne

As speculated, what if the impending sale of Baton Rouge’s Shaw Group frees the inner politician of its founder and former chairman of Louisiana’s Democrats’ Jim Bernhard? For one presumed future gubernatorial aspirant and the new party leadership it comes as most unwelcome news.

Bernhard will make at least $55 million off the deal if it goes through as planned, retiring at its consummation, even a portion of which would make him more than competitive in any political contest in the state. Some believe he might get an early start and run for his area’s Public Service Commission open seat. Businessman Ed Roy and state Rep. Erich Ponti, both Republicans, have announced their intentions to contest the seat for which qualifying beings in two weeks.

The thought is that Bernhard, who ran a Fortune 500 company whose products were subject to PSC regulation, would be seen as a natural fit for voters in a contest that downplays ideology that could offset his Democrat affiliation. That kind of contest also could mute statements from his brief past experience overseeing state Democrats, where his lack of political experience showed with so many articulated illusions about what both major parties represented – if he chooses to run and as a Democrat; he was a self-proclaimed independent prior to switching apparently at the behest of friend former Gov. Kathleen Blanco.

31.7.12

NW LA legislators need to turn cheap talk into real action

Maybe northwest Louisiana state Reps. Richard Burford, Thomas Carmody, Jim Morris, Alan Seabaugh, and Jeff Thompson finally will get serious about reforming Louisiana’s budget process so that it aligns resources to needs in order of priority with a right-sized government. Because up until now they have been all words and no deeds, and speaking fraudulently at that.

These guys, who include every Republican member of the House from the area save state Rep. Henry Burns, pledged themselves as founding members of the Louisiana Budget Reform Coalition – with Morris being tabbed its vice chairman – along with another 20 House members. The group is an offshoot of efforts during the past legislative session to pare down the size of the state’s budget principally by refusing to scoop monies sitting in hundreds of dedicated funds to transfer to the state’s general funds in order to pay for spending. It failed, but got attention and produced impetus apparently to make formal this group.

Unfortunately, that exercise was entirely disingenuous. The only difference between most of the “one-time” money they declared taboo and revenues coming into the general fund is bookkeeping in nature. Most of these funds, like those going into the general fund, are recurring in nature, except that the constitution or statute directs them to be spent on a particular purpose. The problem is, some portion of these end up being in excess of what is spent on those purposes, usually because those items aren’t that important but got locked in because of the power of particular interests that wished to see guaranteed financing of something. Then these dollars become useless, siphoned from the public yet piling up year after year unless an appropriations bill termed a “funds sweep” is passed rescuing a part of them for some often more important purposes.

30.7.12

Reform rightly rolls on even if political reasoning prevails

The recent ruling on injunctive relief sought by education reform opponents from a new Louisiana law’s implementation seems more timed to political considerations than rooted in law, even as its opponents’ arguments appear meritless, in order to store reserves of political capital.

On Aug. 1, the first distribution of public funds as part of reforms that permit families below certain incomes with children attending subpar public school to use these to pay for education at a private school outside of Orleans Parish will commence (a similar program already has operated in Orleans for a few years). Opponents filed suit weeks ago on the bases that this violated the Constitution by sending money through the Minimum Foundation Program for what is not done by public schools and that the instrument authorizing this did not have enough votes to pass in the House.

The matter was taken up by 19th District Judge Tim Kelley, with it defended by a contract lawyer for the state Jimmy Faircloth. It was almost a reunion of sorts: Kelley is the husband of the first commissioner of administration for Gov. Bobby Jindal, Angelé Davis who two years ago returned to the private sector, while Faircloth was Jindal’s executive counsel during some of that time (Kelley, like all judges in the state, was elected to office). In the hearing, Kelley washed his hands of the matter, accepting Faircloth’s argument that the law states that state courts cannot enjoin administrative actions that would promote deficit spending, which would occur having to pay out the scholarship vouchers yet being unable to tap the MFP to do it if enjoined.

29.7.12

Obama DOJ asks sacrifice of rule of law to follow agenda

Let it never be said that the Pres. Barack Obama Administration’s Department of Justice won’t go all out for its allies and fellow travelers, wherever they may be regardless of the issue of controversy. Nationally, for political gain we’ve seen it for no valid constitutional reason attempt to prevent efforts at reducing voting fraud  and abjure from prosecuting those who attempt to intimidate voters. In Louisiana, in order to intimidate those not considered on its side to help those it considers friends we’ve seen threats against those unwilling to increase the possibilities for voter fraud and now is trying to push around the state’s Supreme Court.

It’s trying to bolster the possibility that black Democrat Associate Justice Bernette Johnson, whose surrogates have claimed contrary efforts denote racist sentiments, will get appointed as the Court’s chief justice upon the retirement of Chief Justice Kitty Kimball at the end of the year, by intervening in a suit brought by Johnson in federal court to prevent Kimball from convening the Court to decide who her successor will be. In the federal court where the suit rests, DOJ filed a brief arguing Johnson should inherit this role, whereas Kimball’s approach would acknowledge the juridical ambiguity involved and have the Court clarify, which means Johnson may not be eligible to assume the spot at this time.

Essentially, Johnson began serving on the Court in late 1994, but not as a member of the Court. This was because of a consent decree the state made in the early 1990s with the federal government, specifically overseen by the Eastern District Court of Louisiana, that would allow her position elected as a state appellate court judge to participate in the decision-making of the state’s Supreme Court, as a solution to what the state agreed was racially-gerrymandered judicial districting. She was first elected to the Court only in 2000, after two other justices presently serving with her.