A continuing tight budgetary environment in Louisiana has gotten observers to consider picking up the knife to slaughter some sacred cows. First it was the motion picture tax credit, and now perhaps the Tuition Opportunity Program for Students?
This space on several occasions has spilled the ills of the program that pays for all tuition costs at any public community or technical college, or at any public baccalaureate institution and perhaps even more in some cases, or a portion of tuition at a private baccalaureate institution, for high school graduates in the state or of families claiming residency in the state. The idea was to get presumably college-ready students to a college in the state, drawing both on those who might have left the state and those who otherwise did not have the financial means to attend college.
But because of the program’s relatively low standards and tying the award directly to tuition levels, it did not evolve into a true scholarship reward but rather an entitlement program. Among its several pernicious effects – inflating the number of marginal students who would not complete degrees going to college, providing a disincentive to achieve past a point of mediocrity in high school, providing an incentive for colleges to raise tuition and to lower standards to capture revenues without regard to quality and efficiency – in these times the fact that it self-defeats greater reliance on tuition as a way of responding to budget reductions seems to be getting the increased attention of policy-makers.
Posted by Jeff Sadow at 11:30
Unfortunately, the chickens continue to come home to roost as the consequences of Louisiana’s over-generous retirement system, as a segment of retirees in the state’s two largest suffer at the hands of a system that directed too much money to those encouraged to work too little.
At Senate interim committee hearings the latest statistics revealed that in the Louisiana State Employees Retirement System some 18 percent, and in the Teachers’ Retirement System of Louisiana 39 percent, of retirees received monthly benefits that were below the poverty level for a two-person household. The few cost of living increases to retirees that have come about in the past several years have not matched general price inflation.
The numbers at first glance seem unsettling, but overstate the problem of large numbers of retirees living hand-to-mouth. First, some in both systems worked for the state as only one career, and have either a private pension, something like an IRA, or Social Security benefits coming their way as well. Second, some were part-timers, which in part explains why the TRSL figure is so much higher, a portion of which are part of households with another member either still employed or with a retirement from a full-time job. Third, even for those who worked in either system full time, some will have another household member either employed or also with retirement income. Fourth, these households get a small break in that they are exempt from state income taxes. Finally, many of these may be single households.
Posted by Jeff Sadow at 11:55
It’s not so much in monetary terms that a Louisiana rife with commissions and boards acts as a drain on the state, but in the inefficiency that this condition brings to policy-making for which the citizenry pays.
This year’s annual report on the number of boards and commissions not in and of themselves a separate state agency by the Legislative Auditor reveals nearly 500 of them. The law also requires computing the costs of personnel serving on these (salaries, per diem payments, and travel expenses), which is at the least approaching $5 million. Note that this does include the overall expenses of these, which can be considerably higher but most of which would be spent by other agencies if that function needs to be performed, nor costs of staff, which also would have to be paid for by another agency if it performed that function, or already is as many of these bodies have minor administrative assistance from personnel on loan from other agencies.
The member personnel expenses can be deceiving somewhat. For example, the Louisiana Developmental Disabilities Council is required by federal law and spending on this category is paid for by federal funding, so the state does not have the option to not have it and does not pay state funds for these kinds of expenditures. But perusing the list of all of them brings considerable questioning into the utility of many of these entities, which by their abolishment or consolidation into another agency would save on these kinds of expenses.
Posted by Jeff Sadow at 09:00
Gov. Bobby Jindal means it, and is willing to pay handsomely to get it. But unlike some of his past appointments, if he gets the job done, it will repay Louisianans many times over.
Last week, Jindal appointed former administration official Tim Barfield as secretary of the Department of Revenue, with the specific instructions that he serve at the point to reform the state’s tax structure. Riddled with exceptions that create inefficiencies, the current system is designed more to satisfy political constituencies than as a regime that encourages investment through market signals that will increase the overall tax take without raising rates through the efficiency provided by a fairer, flatter, and perhaps even with lower rates system.
This joins with the Legislature, which has launched a special committee to investigate the matter. Given past fizzled efforts, this act doesn’t seem likely to lead to much so Jindal explicitly backing this effort may produce the needed pressure to make sure months from now the report that gets issued doesn’t only have a few very uncontroversial conclusions make it into law and have the rest disappear until the next go-around on the issue in the distant future.
Posted by Jeff Sadow at 10:30