Search This Blog

28.1.16

Details good, overall bad in higher education report



Because it ignored the elephant in the room, the higher education transition team report prepared at the behest of Gov. John Bel Edwards makes it irrelevant to any serious discussion about long-term policy in that area.



Much of the minutiae within in made sense. It discussed the mediocrity supported by the Taylor Opportunity Program for Students, and recommended either raising its standards or capping award amounts, the latter an approach sent to former Gov. Bobby Jindal’s desk that he vetoed. It asks to continue building upon former Jindal and Department of Education initiatives to reduce bureaucratic impediments and to align better educational delivery with state needs. It recommends targeting resources to areas of excellence, champions bureaucratic realignments to promote efficiency and better delivery, and advocates helping institutions realize more self-generated revenues from their intellectual products and activities. Tactically, it makes many sound and few unsound points.



But it has two fatal flaws strategically that almost entirely moot its salutary aspects. First, it remains captive to the illusory notion that reductions in state funding act as a “disinvestment” into higher education. Factually speaking, the trend of the last several years where fewer state dollars went into higher education replaced mostly by self-generated revenues (mostly tuition and fees) better represents an overdue rebalancing that formerly underpriced higher education to its consumers and demanded over-subsidization by taxpayers that has left the higher education spending only around $40 million fewer a year than when Jindal took office (although with inflation factored in the decline reaches 13 percent).

27.1.16

Kennedy's running puts him at front of Senate field



The entrance of Republican Treasurer John Kennedy into the Senate contest this fall changes everything about that race.



It also elicits a sigh of relief from Democrat Gov. John Bel Edwards. Kennedy would have posed the strongest challenger to an Edwards reelection, and probably would have defeated the incumbent had the election occurred to day. The treasurer winning the Senate obviously removes that threat, which would be reduced by his running and failing to win it, so now Edwards is a happy camper as a result of Kennedy’s choice. Kennedy likely headed in this direction spurred by his two past failures to snare the office (the first time as a Democrat) and at age 64 he would have to wait three more years to run for governor while not getting any younger.



His entrance makes him the best option at present for Democrats, who do not yet have a declared candidate. Of the Republicans running, only Anh “Joseph” Cao has the potential to have prompted significant crossover voting from Democrats, and, given the vast gulf in experience and publicity that Kennedy has earned over his 17 years as Treasurer and from that perch sniping at existing policy-makers for what he sees as a lack of fiscal probity, Cao as a Republican alternative for Democrats shrivels into insignificance. Kennedy would steal votes from any moderate Democrat that dares to run (the only Democrat name mentioned that comes close to this near-mythical creature is state Sen. Gary Smith), pushing into mathematically impossible territory the chance of such a candidate winning a seat.

26.1.16

Democrats drawing wrong lessons from Edwards win



It looks as if Louisiana Democrats may have learned the wrong lesson from the upset win last year by Gov. John Bel Edwards from the names popping up as potential Senate candidates this year.



Edwards won on a fluke. He chose to compete for a statewide office more insulated from the national politics of the Pres. Barack Obama era that unapologetically illuminate Democrats as representatives from a party well out of the mainstream, with an electorate tilted more to Democrat candidates, and a race that attracted Republican candidates who put personal ambition ahead of supporting the right agenda for the state that led them to sabotage out of spite the one among them that received the most votes.



Do not bet on that combination happening for the Senate contest. With any Democrat running for office more easily tied to the party’s extremism and an electorate more favorable to Republicans than for state offices, any Democrat to have even a ghost of a chance must have centrist views – especially in that none of the Republicans running have built up the fear and loathing many in the GOP had for Sen. David Vitter, defeated by Edwards in a runoff. It seems unlikely that they will repeat the circular firing squad of last year that left out Edwards, who as a result of that sideshow managed in enough voters’ minds to separate his very liberal voting record from an image of himself built on God and guns.

25.1.16

Policy-makers increase size of pension time bomb

The clock keeps ticking, but the mentality that has produced one of the nation’s largest unfunded accrued liabilities in Louisiana continues, increasing the chances for a rude blast going off in 2029.



That’s when the conditions of Art. X, Sec. 29 of the Constitution come into play, which mean that the 13 state and statewide retirement systems must not be actuarially under-funded – that is, the systems each must have enough money on hand to pay for all forecast retirement benefits of their present members and retirees – by an amount generated prior to fiscal year 1989. At present, in the aggregate these have only about 60 percent of that money available, with around nine-tenths of the unfunded accrued liability of roughly $20 billion coming from the Teachers Retirement System of Louisiana and the Louisiana State Employees Retirement System (any subsequent UAL also has statutory limits on reductions for each system in a relatively smaller aggregate amount, with 2038 as the last-established deadline among these).



Because of the imperative, each year the state must pay extra – beyond the statutory limits required for each plan in each system – into pensions to make up for this UAL. That adds up to around $1.5 billion extra footed by taxpayers annually just for these two systems, which includes any local taxes paid as well concerning TRSL as about 90 percent of its members fall under school district jurisdiction, with the remainder under state jurisdiction covering higher education employees (not part of the optional retirement plan) and directly state-run elementary and secondary school employees.