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30.4.20

Data contradict Edwards statewide ban claim

The Democrat Gov. John Bel Edwards Administration fed Louisianans a demonstrably false line to back his extension of Louisiana’s economic shutdown.

Earlier this week, Edwards said just about all of the current restrictions countering the Wuhan coronavirus pandemic he had proclaimed into place would apply statewide through May 15. A number of Republican legislators questioned this approach, noting that infection rates varied considerably across the state and so a regional strategy that would focus on local governments imposing restrictions would serve the twin goals of leaving the vulnerable parts of the population less so going forward by the swifter acquisition of herd immunity among the healthy subset and in reviving livelihoods. As justification, he said that three of the state’s nine health care regions showed an increase in virus incidence and one held steady. Additionally, several parishes had some of the nation’s highest infection rates among counties.

That explanation never made sense. Imposing statewide restrictions on less-affected areas beyond what local authorities would deem prudent in no significant way would do any better in controlling the virus anywhere, and following Edwards’ tactic to its logical conclusion means no state should loosen restrictions (or the several that don’t have any at the statewide level should impose these immediately) until the absolutely worst case (at this time, New York) feels that it can. (And even New York will take a regional approach.)

29.4.20

Looming LA financial disaster unaddressed

It’s an abacus reading nobody wants to see. Or, apparently talk about in Louisiana to this point, at least among the policy-makers who matter. But they can’t avoid the harsh reality of the disaster state finances will encounter both this and next fiscal year, and perhaps even beyond.

Every state will take a noticeable hit from the Wuhan coronavirus pandemic and the significant economic slowdown it has triggered for more than a month, with more to come. However, Louisiana remains more vulnerable than just about any, with its oversized energy and tourism sectors, underperforming economy, and inefficient fiscal structure. Two different assessments place the state as the sixth-most and the most vulnerable economically to the crisis.

The math is painful, both for this concluding fiscal year and the next. One analyst sees the state encountering a 40 percent shortfall from its current budget, which in state-supported dollars means in the neighborhood of an $8.3 billion haircut. Some back-of-the-envelope calculations don’t support such an extreme view, but produce sobering numbers nonetheless.

28.4.20

Edwards continues botching virus response

I don’t suppose leopards change their spots. And now the Legislature must act.

Having botched the initial response to the coming of the Wuhan coronavirus pandemic, perhaps it should have been expected that Democrat Gov. John Bel Edwards wouldn’t do much better when it came to start handling the back end. Yesterday, Edwards announced the status quo on gubernatorial-ordered restrictions until May 15, with the small exception that elective medical procedures could commence that are time sensitive and that some interactions may increase, such as with outdoor dining and curbside delivery.

Edwards argued that Louisiana’s high per capita infection rate mandated the feet-dragging, which is ironic because Edwards policy decisions in no small measure needlessly aggravated the crisis. By not preparing adequately for a clearly coming threat and then issuing draconian directives indiscriminately applied, he permitted increased chances at infection, decreased opportunity for herd immunity to be acquired in low-risk populations, and now is delaying the ability of the public to get back on its feet economically.

27.4.20

Reckoning here for underfunded LA pensions

Even as Louisiana seems to have Wuhan coronavirus pandemic expenses covered and adequate unemployment insurance reserves, it will see significantly higher expenses from Medicaid and the earned income tax credit as a result of the economic attenuation from gubernatorial responses to the virus. But the real busting of its fiscal year 2021 budget comes when adding in extra pension costs.

Currently, those two extra expenditures for the budget year starting Jul. 1 track at about $140 million. But this doesn’t include additional obligations due to pension funds because of the large market downturn as economic consequences of the pandemic began to bite.

This is because accounting standards dictate that a government pension fund should not have an excessive unfunded accrued liability, or the amount predicted paid out minus contributions and investment changes, 30 years in the future. Thus, in Louisiana each year a computation is made about the amount left unfunded and amortized over the next 30 years, which then should be paid that year above forecast investment gains (according to statute an assumed rate of return fixed by a panel) and contributions. These contributions are a mix of an employee share, 8 percent for most, and an employer share which starts at a base but then elevates to whatever level necessary to make the next year’s payoff of the UAL.

26.4.20

Smart reopen can redeem botched lockdown


Having botched Louisiana’s response on the upswing of the Wuhan coronavirus pandemic, Democrat Gov. John Bel Edwards has a chance at partial redemption on its downhill side.

Tomorrow, Edwards is expected to outline his next response to the dwindling crisis. As of today, the seven-day rolling average of new cases registered only a two percent increase and deaths rose just four percent. Further, the outbreak largely remains confined to St. Tammany, Orleans, St. Bernard, Plaquemines, Lafourche, Jefferson, St. Charles, St. John the Baptist, and St. James Parishes, which have only 29 percent of the state’s population but 61 percent of the cases and deaths.

Compared to his neighbors, Edwards is well behind the curve. A week ago, the governors – all Republicans – of South Carolina, Georgia, Florida, Alabama, Mississippi, and Tennessee announced measures continuing through this week of substantially reopening their economies, although local officials retain the authority to impose more restrictions. Independently, Republican Texas Gov. Greg Abbott has done the same. Nothing along these lines has come from Arkansas Republican Gov. Asa Hutchinson, because Arkansas, along with a handful of other states, never imposed measures to shut down large swaths of the economic sector.