We’ve known for a long time that Agriculture Secretary Bob Odom, when making policy, does so on the basis of what’s best for Odom’s political fortunes, not what’s best for Louisiana. This week carried more disheartening confirmation of that.
A couple of days ago, Odom got approval from the Louisiana Agricultural Finance Authority to guarantee even more state money to a group that is supposed to lease the Lacassine sugar mill, built mostly by state employees whose job descriptions don’t include anything about construction work with $45 million of taxpayers’ money backed by money that is supposed to go to treat boll weevil infestations. This is on top of another $7 million loan guaranteed by another state agency.
Odom sometimes claims he’s actually got a sale pending on it all for $60 million, which could be to the cooperative that intends to lease, or maybe to a billionaire of Willie Nelson which then the lease agreement would have to go with. He can’t say for sure, but he does know that “This thing here is fixing to pop open so much.” Even better, there’s supposed to be an ethanol plant built next to it encouraged by the new state law that will force consumers to subsidize producers if the price is competitive (whether that condition actually holds true is another matter) – even though the original investor backed out inviting a state lawsuit.
26.7.06
Why doesn't Blanco push tax cuts like other governors?
Upon reading about the tremendous tax cuts other Democrat governors have delivered to the citizens of their states, you have to ask, why not in Louisiana?
If Oklahoma’s Gov. Brad Henry could give cuts in the area of $777 million in the past two years, why can’t fellow Democrat Louisiana’s Gov. Kathleen Blanco do the same? (And what about cutting by other Democrat governors including New Mexico’s Bill Richardson – a former Clinton appointee!) After all, in the special sessions after the 2005 hurricane disasters the state cut about that much from its budget – and then Blanco stumped to restore almost all of those cuts in the 2006 regular session. Why could not the cuts have been translated into tax cuts?
The states have the same basic potential. Both have a heritage as oil-producing states nad those prices are going through the ceiling now. In fact, Louisiana has more slack because (for the latest year available, 2003) it ranked 23rd in per capita revenues coming into state government, while Oklahoma was only 42nd, yet they are almost even in terms of expenditures per capita (for the latest year available, 2003) with Oklahoma being a little higher. (Teachers there even got a raise this year – and still they make less than the typical Louisiana teacher.)
This creates a situation very hard to understand. Louisiana takes in, per capita, $435 more than it spends, while Oklahoma actually spends $115 per capita more than it takes in (in 2003). Yet Oklahoma is the one cutting taxes and Louisiana isn’t?
The question is worth restating: if a state like Oklahoma, whose government draws in fewer per capita resources than Louisiana’s and is a state not much “wealthier” than Louisiana (Oklahoma’s median annual household income being less than a $1,000 higher than Louisiana’s for the latest available year, 2003) can give tax cuts equal to five percent of its revenues, why has Blanco spent her time trying to raise taxes instead of generally cutting taxes?
Yesterday, Henry got renominated to run for reelection later this year. Next year, Blanco seeks reelection. Maybe it’s time Blanco got with the program.
If Oklahoma’s Gov. Brad Henry could give cuts in the area of $777 million in the past two years, why can’t fellow Democrat Louisiana’s Gov. Kathleen Blanco do the same? (And what about cutting by other Democrat governors including New Mexico’s Bill Richardson – a former Clinton appointee!) After all, in the special sessions after the 2005 hurricane disasters the state cut about that much from its budget – and then Blanco stumped to restore almost all of those cuts in the 2006 regular session. Why could not the cuts have been translated into tax cuts?
The states have the same basic potential. Both have a heritage as oil-producing states nad those prices are going through the ceiling now. In fact, Louisiana has more slack because (for the latest year available, 2003) it ranked 23rd in per capita revenues coming into state government, while Oklahoma was only 42nd, yet they are almost even in terms of expenditures per capita (for the latest year available, 2003) with Oklahoma being a little higher. (Teachers there even got a raise this year – and still they make less than the typical Louisiana teacher.)
This creates a situation very hard to understand. Louisiana takes in, per capita, $435 more than it spends, while Oklahoma actually spends $115 per capita more than it takes in (in 2003). Yet Oklahoma is the one cutting taxes and Louisiana isn’t?
The question is worth restating: if a state like Oklahoma, whose government draws in fewer per capita resources than Louisiana’s and is a state not much “wealthier” than Louisiana (Oklahoma’s median annual household income being less than a $1,000 higher than Louisiana’s for the latest available year, 2003) can give tax cuts equal to five percent of its revenues, why has Blanco spent her time trying to raise taxes instead of generally cutting taxes?
Yesterday, Henry got renominated to run for reelection later this year. Next year, Blanco seeks reelection. Maybe it’s time Blanco got with the program.
25.7.06
Louisiana insurance tussle has national implications
Apparently, the attempt by Allstate Insurance to drop wind and hail coverage on roughly 30,000 homes in the Louisiana coastal parishes has ramifications that far exceed the state’s boundaries.
RS 22:635.3, Allstate claims, allows it to withdraw certain kinds of coverage even if the stipulation of two catastrophic storms in three years has yet to be met (in the same place; Katrina and Rita were not). Insurance Commissioner Jim Donelon says the law (only Louisiana has such an interventionist law) cannot be interpreted the way Allstate argues, which is that there is a difference between cancelling and nonrenewal and with changing a policy endorsement.
The semantics seem destined to head to court if Allstate carries out its plan at the beginning of next year. And, a reading of the statute indicates that Allstate may be able to claim there has been a “material change in the risk being insured,” especially given that hurricane forecasters universally recognize that a more-active phase of hurricane activity in the cycle has been reached and that improved prediction methods may indicate that past risk was understated.
But by backing off its claim that the second-largest insurer would leave the state unless it could follow through on this, Allstate indicates that its basic homeowner insurance line is too profitable to pass up. Then why push the issue and get Donelon all ginned up about it during an election year, if it’s just throwing the dice hoping to get a better outcome?
This is because Allstate’s move appears to be part of a larger campaign to spread risk out to the Louisiana or American taxpayer. Speakers on its behalf hint that the real solution to it would be to create a state or, better for them, a national risk pool for high-risk homeowner insurance. In short, rather than have the companies and their policyholders responsible for their decisions, make those who have no connection at all to the company, who perhaps decided so exactly on the basis of risk avoidance, bear some of the risk.
To allow this would be a travesty. There’s no good reason why somebody in Alaska, or Hawai’i, or North Dakota, or north Louisiana ought to subsidize somebody who wants to own and insure a house in certain high-risk places in Louisiana – or that a Louisianan would subsidize risky residences in those other states. If you want to take the risk, it’s your responsibility to pay for it, not that of others entirely unrelated to the process.
One hopes Donelon, Gov. Kathleen Blanco who also has rapped the company, and a number of other Louisiana policy-makers don’t get sucked into this pipe dream of spreading the risk to unrelated parties. Not only does it abrogate the idea of self-responsibility, but it’s just not going to happen: you can bet that in the majority of congressional districts, and maybe even in the majority of states, there will be net losers in the subsidization game and this will go nowhere in Congress. So they need to do what’s possible and not waste their time and efforts.
(Of course, subsidization already is being practiced in Louisiana. Ratepayers currently, and perhaps in the future taxpayers, are being forced to make up losses by the state’s entity, Louisiana Citizens Property Insurance, which insures where nobody else will, even if they live in low-risk areas and bought policies through companies with low exposure to the ravaged regions of the state.)
The best solution would be for the state to steer insurance with as light of a hand as possible, giving the free market maximal latitude to determine rates without provider collusion. One very good first step would be getting rid of RS 22:653.3 at the first opportunity and thus maybe save the state some dollars in defending it in court.
RS 22:635.3, Allstate claims, allows it to withdraw certain kinds of coverage even if the stipulation of two catastrophic storms in three years has yet to be met (in the same place; Katrina and Rita were not). Insurance Commissioner Jim Donelon says the law (only Louisiana has such an interventionist law) cannot be interpreted the way Allstate argues, which is that there is a difference between cancelling and nonrenewal and with changing a policy endorsement.
The semantics seem destined to head to court if Allstate carries out its plan at the beginning of next year. And, a reading of the statute indicates that Allstate may be able to claim there has been a “material change in the risk being insured,” especially given that hurricane forecasters universally recognize that a more-active phase of hurricane activity in the cycle has been reached and that improved prediction methods may indicate that past risk was understated.
But by backing off its claim that the second-largest insurer would leave the state unless it could follow through on this, Allstate indicates that its basic homeowner insurance line is too profitable to pass up. Then why push the issue and get Donelon all ginned up about it during an election year, if it’s just throwing the dice hoping to get a better outcome?
This is because Allstate’s move appears to be part of a larger campaign to spread risk out to the Louisiana or American taxpayer. Speakers on its behalf hint that the real solution to it would be to create a state or, better for them, a national risk pool for high-risk homeowner insurance. In short, rather than have the companies and their policyholders responsible for their decisions, make those who have no connection at all to the company, who perhaps decided so exactly on the basis of risk avoidance, bear some of the risk.
To allow this would be a travesty. There’s no good reason why somebody in Alaska, or Hawai’i, or North Dakota, or north Louisiana ought to subsidize somebody who wants to own and insure a house in certain high-risk places in Louisiana – or that a Louisianan would subsidize risky residences in those other states. If you want to take the risk, it’s your responsibility to pay for it, not that of others entirely unrelated to the process.
One hopes Donelon, Gov. Kathleen Blanco who also has rapped the company, and a number of other Louisiana policy-makers don’t get sucked into this pipe dream of spreading the risk to unrelated parties. Not only does it abrogate the idea of self-responsibility, but it’s just not going to happen: you can bet that in the majority of congressional districts, and maybe even in the majority of states, there will be net losers in the subsidization game and this will go nowhere in Congress. So they need to do what’s possible and not waste their time and efforts.
(Of course, subsidization already is being practiced in Louisiana. Ratepayers currently, and perhaps in the future taxpayers, are being forced to make up losses by the state’s entity, Louisiana Citizens Property Insurance, which insures where nobody else will, even if they live in low-risk areas and bought policies through companies with low exposure to the ravaged regions of the state.)
The best solution would be for the state to steer insurance with as light of a hand as possible, giving the free market maximal latitude to determine rates without provider collusion. One very good first step would be getting rid of RS 22:653.3 at the first opportunity and thus maybe save the state some dollars in defending it in court.
24.7.06
Donelon campaigning aggravates insurance problem
Louisiana Insurance Commissioner Jim Donelon has got himself put between a rock and a hard place courtesy of a silly state law, but that’s not stopping him from using the situation to try to boost his campaign fortunes.
Last week, the unelected official who ascended to his place when his predecessor resigned, received unpleasant news from Allstate Insurance, representing one-fifth of home insurance policies in the state. It wanted to drop hail and wind coverage from a little over seven percent of its homeowner policies, presumably in the high risk area on the coast. The trouble was, a law unique to Louisiana prevents any company from doing this unless there have been two catastrophic events within a three-year period. If it could not follow through, the firm said it would exit the market.
Simply, even if the company is reporting decent profits, it fears that another hurricane striking the coast, which would then qualify it stop writing such policies, this or next year could wipe out those profits and eat into reserves. Thus, it would rather leave the market. If that happened, this potentially could foist huge costs on Louisiana taxpayers because, since no new underwriting by major firms is occurring for those kinds of policies, those homeowners might be forced into having policies written by Louisiana Citizens Property Insurance. These are more expensive, by law, and if a disaster does occur and it must pay out, other ratepayers or even taxpayers would be on the hook to subsidize payouts.
This scenario doesn’t necessarily have to happen. If smaller insurers are willing to step up, they might get some chunk of this business. However, they probably would come in at a substantially higher rate. And, since the conflict is likely to drag out past hurricane season, it may become moot since Allstate talks of doing this for next year’s policies. That outcome would entice major insurers possibly to write new policies. Perhaps most frustrating to Donelon, there’s nothing he can do about this because only the Legislature could amend this law; he has no power to make exceptions to it.
Yet, he has rattled sabers about the situation, declaring the state intention to leave is “blackmail” and trying to introduce class warfare into it by noting the profits of the company. It’s grandstanding that is unneeded and likely prompted by the election he will contest Sep. 30. Not having been elected to the office and thus possessing little legitimacy, by talking tough Donelon may think he’ll come out looking like a champion for insurance customers, many who will vote.
Perhaps, but it also shows that he’d just as soon ratchet up the crisis through a war of words than to quietly work behind the scenes. Blasting the company only aggravates a conflict which could lead to a major loss of choice for Louisiana consumers. (Separately, it shows how counterproductive this law is and reminds everybody that public policy choices must be made; is it the responsibility of homeowners’ own resources or taxpayers’ subsidies to permit those homeowners to choose to live in certain parts of the state?)
Donelon chose poorly in putting his campaign ahead of his job.
Last week, the unelected official who ascended to his place when his predecessor resigned, received unpleasant news from Allstate Insurance, representing one-fifth of home insurance policies in the state. It wanted to drop hail and wind coverage from a little over seven percent of its homeowner policies, presumably in the high risk area on the coast. The trouble was, a law unique to Louisiana prevents any company from doing this unless there have been two catastrophic events within a three-year period. If it could not follow through, the firm said it would exit the market.
Simply, even if the company is reporting decent profits, it fears that another hurricane striking the coast, which would then qualify it stop writing such policies, this or next year could wipe out those profits and eat into reserves. Thus, it would rather leave the market. If that happened, this potentially could foist huge costs on Louisiana taxpayers because, since no new underwriting by major firms is occurring for those kinds of policies, those homeowners might be forced into having policies written by Louisiana Citizens Property Insurance. These are more expensive, by law, and if a disaster does occur and it must pay out, other ratepayers or even taxpayers would be on the hook to subsidize payouts.
This scenario doesn’t necessarily have to happen. If smaller insurers are willing to step up, they might get some chunk of this business. However, they probably would come in at a substantially higher rate. And, since the conflict is likely to drag out past hurricane season, it may become moot since Allstate talks of doing this for next year’s policies. That outcome would entice major insurers possibly to write new policies. Perhaps most frustrating to Donelon, there’s nothing he can do about this because only the Legislature could amend this law; he has no power to make exceptions to it.
Yet, he has rattled sabers about the situation, declaring the state intention to leave is “blackmail” and trying to introduce class warfare into it by noting the profits of the company. It’s grandstanding that is unneeded and likely prompted by the election he will contest Sep. 30. Not having been elected to the office and thus possessing little legitimacy, by talking tough Donelon may think he’ll come out looking like a champion for insurance customers, many who will vote.
Perhaps, but it also shows that he’d just as soon ratchet up the crisis through a war of words than to quietly work behind the scenes. Blasting the company only aggravates a conflict which could lead to a major loss of choice for Louisiana consumers. (Separately, it shows how counterproductive this law is and reminds everybody that public policy choices must be made; is it the responsibility of homeowners’ own resources or taxpayers’ subsidies to permit those homeowners to choose to live in certain parts of the state?)
Donelon chose poorly in putting his campaign ahead of his job.
23.7.06
If Malone stays out, GOP has better shot in Shreveport
The all-but announced entry of Liz Swaine into the Shreveport mayoral derby probably sets the major-candidate field for the 2006 contest. While state Sen. Max Malone has said he will let everybody know by qualifying (Aug. 9-11) whether he will be a candidate, it seems unlikely, for two reasons.
First, for a Sep. 30 primary launching officially a race for mayor leaves it a bit late; Malone really needs to start media buys prior to then and there’s no evidence of that. Also, with Swaine’s entry the field has become more fragmented, and the reality of electoral politics for this contest is that a late entry of a quality candidate such as Malone not only would not leave him with much of a chance against other quality candidates, but it would decrease the chances of white candidates as well.
Until the primary, the Shreveport electorate needs to be conceived as participating in two distinct contests. There will be little crossover voting in the primary, especially with so many candidates appealing to identifiable segments of the electorate. Thus, state Rep. Cedric Glover and television executive Ed Bradley will almost exclusively divvy up the black vote (newcomer Madjun Ali will receive little of this vote), while Democrat Swaine and Republicans former city official Jerry Jones, current city official Arlena Acree, and retiree Vernon Adams will divide the white vote, roughly in that order.
The two black candidates must share about half of the electorate, while four white candidates must share the roughly other half. As the number of white candidates increases, the odds lengthen that any one of them would exceed the primary vote of both black candidates separately. So, a Malone entrance would make matters worse for all white candidates, most of all for Jones who has picked up support from most Republican Party regulars and most conservative activists.
Swaine’s entrance hurts Acree and Glover the most. White Democrat loyalists without a standard-bearer would have been most likely to gravitate in those directions, but now have Swaine to support. The domino effect it produces also assists Bradley and Jones, by pulling away relatively more support from Glover and Acree.
However, Swaine probably does not have enough upside to make it into the general election runoff. While she likely will head up the list of choices of the dying breed of moderate white Democrats, liberals probably would move to Glover and conservatives to Jones (and almost all blacks going for Glover or Bradley), leaving her too few votes. Her best strategy will be of mobilization; no candidate will do better among occasional voters whose decisions on candidates rest mainly on name recognition and positive affect towards a candidate, not from any study of issues.
Bradley’s chameleon campaign might have been adversely impacted by Swaine’s entrance, but apparently a decision was made there long ago to build as his coalition’s chief base blacks attracted by the playing of the race card, evidenced by his initial refusal, then reluctant disavowal of racist propaganda belittling black politicians who chose to build coalitions with whites. Whether this “blame whitey” chunk of the electorate is enough of a core on which to make a runoff, however, is questionable.
Nevertheless, Swaine’s entry has made Bradley’s prospects noticeably brighter, although Glover still has the edge as the “black” frontrunner. Jones has solidified his status as the “white” frontrunner by her entry by virtue of activist support and resources on hand that will get his message out. Malone’s throwing his hat into the ring, however, not only would divide the Jones vote, but probably would create a situation with two blacks in the runoff in a city where blacks make up less than half the electorate.
The proportion of the electorate comprised by the different races that vote will be the key to the eventual winner. At this point, a Glover-Jones runoff seems the most likely. In any black Democrat/white Republican scenario, crucial would be registration in the city at the end of August and relative turnout. Statistics suggest that white registrations will lag non-whites by about 2,000 by then, but keeping in mind that white turnout exceeded non-white turnout in the 2002 primary by 2.5 percent, this indicates such a runoff would be very close indeed. In this scenario, the quality of campaign organizations becomes most critical and every vote will count.
First, for a Sep. 30 primary launching officially a race for mayor leaves it a bit late; Malone really needs to start media buys prior to then and there’s no evidence of that. Also, with Swaine’s entry the field has become more fragmented, and the reality of electoral politics for this contest is that a late entry of a quality candidate such as Malone not only would not leave him with much of a chance against other quality candidates, but it would decrease the chances of white candidates as well.
Until the primary, the Shreveport electorate needs to be conceived as participating in two distinct contests. There will be little crossover voting in the primary, especially with so many candidates appealing to identifiable segments of the electorate. Thus, state Rep. Cedric Glover and television executive Ed Bradley will almost exclusively divvy up the black vote (newcomer Madjun Ali will receive little of this vote), while Democrat Swaine and Republicans former city official Jerry Jones, current city official Arlena Acree, and retiree Vernon Adams will divide the white vote, roughly in that order.
The two black candidates must share about half of the electorate, while four white candidates must share the roughly other half. As the number of white candidates increases, the odds lengthen that any one of them would exceed the primary vote of both black candidates separately. So, a Malone entrance would make matters worse for all white candidates, most of all for Jones who has picked up support from most Republican Party regulars and most conservative activists.
Swaine’s entrance hurts Acree and Glover the most. White Democrat loyalists without a standard-bearer would have been most likely to gravitate in those directions, but now have Swaine to support. The domino effect it produces also assists Bradley and Jones, by pulling away relatively more support from Glover and Acree.
However, Swaine probably does not have enough upside to make it into the general election runoff. While she likely will head up the list of choices of the dying breed of moderate white Democrats, liberals probably would move to Glover and conservatives to Jones (and almost all blacks going for Glover or Bradley), leaving her too few votes. Her best strategy will be of mobilization; no candidate will do better among occasional voters whose decisions on candidates rest mainly on name recognition and positive affect towards a candidate, not from any study of issues.
Bradley’s chameleon campaign might have been adversely impacted by Swaine’s entrance, but apparently a decision was made there long ago to build as his coalition’s chief base blacks attracted by the playing of the race card, evidenced by his initial refusal, then reluctant disavowal of racist propaganda belittling black politicians who chose to build coalitions with whites. Whether this “blame whitey” chunk of the electorate is enough of a core on which to make a runoff, however, is questionable.
Nevertheless, Swaine’s entry has made Bradley’s prospects noticeably brighter, although Glover still has the edge as the “black” frontrunner. Jones has solidified his status as the “white” frontrunner by her entry by virtue of activist support and resources on hand that will get his message out. Malone’s throwing his hat into the ring, however, not only would divide the Jones vote, but probably would create a situation with two blacks in the runoff in a city where blacks make up less than half the electorate.
The proportion of the electorate comprised by the different races that vote will be the key to the eventual winner. At this point, a Glover-Jones runoff seems the most likely. In any black Democrat/white Republican scenario, crucial would be registration in the city at the end of August and relative turnout. Statistics suggest that white registrations will lag non-whites by about 2,000 by then, but keeping in mind that white turnout exceeded non-white turnout in the 2002 primary by 2.5 percent, this indicates such a runoff would be very close indeed. In this scenario, the quality of campaign organizations becomes most critical and every vote will count.
20.7.06
Odom, Foti derive new ways for state to waste money
As if Louisiana’s governments, certainly state and many local, waste enough money through inefficiency and ill-advised priorities, now potentially more can be wasted through taking on – with little oversight – riskier investments. Both a “low-tech” and “high-tech” version made news recently.
The “low-tech” version involved an old-fashioned loan guarantee made by a state agency, the State Market Commission, controlled by Agriculture Secretary Bob Odom, to help private interests buy the Lacassine sugar mill. The facility, recently completed costing the state $45 million despite financial projections showing it to be dubious, is supposed to be bought from the state for $45-60 million (the actual price depending upon what Odom feels like telling people at any given moment) by something (the actual buyer depending upon what Odom feels like telling people at any given moment) between now and who knows when (the date depending upon what Odom feels like telling people at any given moment).
But it turns out that a group who may be the buyer has gotten a loan guarantee of $7 million from the Commission. This means if it defaults on that loan, which goes towards making the mill operational (the actual date of operation depending upon what Odom feels like telling people at any given moment), the state is on the hook for it. And given the projections, default would not be surprising.
The “low-tech” version involved an old-fashioned loan guarantee made by a state agency, the State Market Commission, controlled by Agriculture Secretary Bob Odom, to help private interests buy the Lacassine sugar mill. The facility, recently completed costing the state $45 million despite financial projections showing it to be dubious, is supposed to be bought from the state for $45-60 million (the actual price depending upon what Odom feels like telling people at any given moment) by something (the actual buyer depending upon what Odom feels like telling people at any given moment) between now and who knows when (the date depending upon what Odom feels like telling people at any given moment).
But it turns out that a group who may be the buyer has gotten a loan guarantee of $7 million from the Commission. This means if it defaults on that loan, which goes towards making the mill operational (the actual date of operation depending upon what Odom feels like telling people at any given moment), the state is on the hook for it. And given the projections, default would not be surprising.
19.7.06
Blanco creates another impediment to recovery
The lesson for today: if Gov. Kathleen Blanco and a handful of state legislators can’t produce legislation to give the shaft to Louisiana taxpayers, there are other ways for them to confiscate the people’s money.
The example here is the decision by the State Civil Service Commission to raise the minimum wage paid to state employees by a buck an hour, even as legislation to do so failed in the past legislative session, and despite the well-known reasons why any hike in a minimum wage, or even the very existence of it, is a bad thing for the entire economy. Incredibly, even so the decision was unanimous.
You might think the members would know better (especially this one). But, then again, they were put there by Blanco (from a list of three nominees by each private university leader in the state), so they pretty much have to vote the way she tells them if they wish to remain. The only exception is the state employee electee, who houses prisoners for a living.
The example here is the decision by the State Civil Service Commission to raise the minimum wage paid to state employees by a buck an hour, even as legislation to do so failed in the past legislative session, and despite the well-known reasons why any hike in a minimum wage, or even the very existence of it, is a bad thing for the entire economy. Incredibly, even so the decision was unanimous.
You might think the members would know better (especially this one). But, then again, they were put there by Blanco (from a list of three nominees by each private university leader in the state), so they pretty much have to vote the way she tells them if they wish to remain. The only exception is the state employee electee, who houses prisoners for a living.
18.7.06
Veto session attempt primarily about political futures
It’s been a long time since there’s been a veto session of the Louisiana Legislature, because so seldom do legislators want to challenge the governor. That state Rep. Billy Montgomery has started an effort to do so tells us about his and Gov. Kathleen Blanco’s political futures.
The last governor to have bills vetoed was Buddy Roemer. It was no accident that a year later Roemer found he could not even make the general election runoff for a second term against a pair of future convicts. Only a weak governor would have a veto sprung against her, but it’s not a good sign for Blanco’s future prospects to even have it being actively considered.
No doubt Montgomery sincerely believes in the merit of the bill the veto of which he wants overridden – as well he should, for HB 699 was a bill that never should have been vetoed. Its compelling argument that consumers will benefit from lower cable rates overwhelms the weak facts and twisted logic of the special interests that opposed it, local government and cable television companies. But that may not be even the primary reason Montgomery is kicking up a fuss.
Term-limited in the House, Montgomery has eyes on the Senate District 37 seat, perhaps the most conservative in the state which therefore gives Montgomery a thin record for it. Traditionally one of the more populist, liberal members of the House, this year Montgomery compiled a more reformist, conservative voting record, and HB 699 was a big part of it. Shepherding the bill through wins him some credit, but a final victory or at least the effort to reach it would be even better.
Since Montgomery has so little to hang his hat on in terms of conservative/reformist credentials, the more he can milk HB 699, the better his chances of winning in 2007. Even if Montgomery could rally a majority in both houses to call the session, with just one vote to spare in both the House and Senate and a number of previous bill supporters probably skittish that an affirmative override vote on their part would lead to Blanco avenging herself on their capital outlay requests next spring, the odds for a successful override aren’t good.
Still, Montgomery must figure the publicity can only do him electoral good, and he is doing the right thing. But, to properly understand the motivations here, were Montgomery a genuine conservative/reformer and/or he was not running for that open seat, it’s very doubtful he would have gone to these lengths. It’s nice to have a leopard working for you, but they don’t change their spots overnight.
The last governor to have bills vetoed was Buddy Roemer. It was no accident that a year later Roemer found he could not even make the general election runoff for a second term against a pair of future convicts. Only a weak governor would have a veto sprung against her, but it’s not a good sign for Blanco’s future prospects to even have it being actively considered.
No doubt Montgomery sincerely believes in the merit of the bill the veto of which he wants overridden – as well he should, for HB 699 was a bill that never should have been vetoed. Its compelling argument that consumers will benefit from lower cable rates overwhelms the weak facts and twisted logic of the special interests that opposed it, local government and cable television companies. But that may not be even the primary reason Montgomery is kicking up a fuss.
Term-limited in the House, Montgomery has eyes on the Senate District 37 seat, perhaps the most conservative in the state which therefore gives Montgomery a thin record for it. Traditionally one of the more populist, liberal members of the House, this year Montgomery compiled a more reformist, conservative voting record, and HB 699 was a big part of it. Shepherding the bill through wins him some credit, but a final victory or at least the effort to reach it would be even better.
Since Montgomery has so little to hang his hat on in terms of conservative/reformist credentials, the more he can milk HB 699, the better his chances of winning in 2007. Even if Montgomery could rally a majority in both houses to call the session, with just one vote to spare in both the House and Senate and a number of previous bill supporters probably skittish that an affirmative override vote on their part would lead to Blanco avenging herself on their capital outlay requests next spring, the odds for a successful override aren’t good.
Still, Montgomery must figure the publicity can only do him electoral good, and he is doing the right thing. But, to properly understand the motivations here, were Montgomery a genuine conservative/reformer and/or he was not running for that open seat, it’s very doubtful he would have gone to these lengths. It’s nice to have a leopard working for you, but they don’t change their spots overnight.
17.7.06
Public needs to watch Regents matters closely
If I had little experience with working in government, in higher education, in Louisiana, I likely would shrug off reports that power plays are going on at the state’s Board of Regents, of these fantastic scenarios that certain people are trying to be put into positions of power, that the governor’s husband was trying to rearrange the higher education system, that political agendas come first. But ….
Most people go through their lives with only minimal daily contact with government (which unfortunately often becomes reflected in a lack of interest or knowledge about government and political issues of the day). They’re engaged enough interacting with free markets, raising families, or pursuing other ends to make it difficult to fully understand that (1) daily happenings in government agencies have only a tenuous connection with the real world, (2) daily happenings in academia have almost no connection with the real world, and (3) both of these conditions are compounded in extremity by a hyper-politicized political environment built so much on personalized power bases such as in Louisiana.
I’m embarking on 20 years teaching in higher education, with all but four of those years in Louisiana institutions, most of those at my present location. But I also have the benefit of an M.B.A. and a short tenure managing in the banking industry, and I can tell you that the decisions made in the latter, private sector area are much more rationally related to reality (because of the imperative that the free market distributes resources in proportion to agents’ contributions to society) than in the former, which features government-run institutions heavily dependent upon tax dollars (directly or subsidized) where it is political power, not merit, that determines the distribution of resources. I could, but won’t, give a number of examples of this personally known by me just from my own institution, and others at which I’ve taught.
So when in Louisiana you have state senators and former regents complaining about political agendas to ditch certain people and to bring in others, and to reorganize the entire structure of higher education apparently to favor a certain interest led by the governor’s husband, as far-fetched as all of this sounds, not only is it believable, it might even be true. That by itself doesn’t mean the personnel changes or potential reorganization would not be positive. But it would be reprehensible if the reason for such changes was not after careful study of all available facts and options, but because of politics.
This is why the search for a new chancellor for the Louisiana State University System, new appointees to the Board of Regents, and any alterations to the organization of higher education in the state that may result must be scrutinized very carefully by those connected to higher education, legislators, and the citizenry. Even that may not be enough to prevent politics – even with procedures to maximize impartiality I’ve seen rigged search committees/pre-determined hiring decisions, “studies” that blatantly push one side of an argument, and Gov. Kathleen Blanco can stick whomever she wants on the Board of Regents where they have the power to do whatever they want (short of legislative intervention).
Not reelecting Blanco would nip in the bud the possibility of this specific issue becoming a problem, but the general conditions remain regardless. Only a vigilant public can control for that. So, even if living in the real world takes up so much time and effort, keeping up with what goes on in the unreal world of Louisiana higher education is something all citizens need to do to make it work the best that it can.
(P.S. Note disclaimer in small type below for those of you who are unable to understand the obvious.)
Most people go through their lives with only minimal daily contact with government (which unfortunately often becomes reflected in a lack of interest or knowledge about government and political issues of the day). They’re engaged enough interacting with free markets, raising families, or pursuing other ends to make it difficult to fully understand that (1) daily happenings in government agencies have only a tenuous connection with the real world, (2) daily happenings in academia have almost no connection with the real world, and (3) both of these conditions are compounded in extremity by a hyper-politicized political environment built so much on personalized power bases such as in Louisiana.
I’m embarking on 20 years teaching in higher education, with all but four of those years in Louisiana institutions, most of those at my present location. But I also have the benefit of an M.B.A. and a short tenure managing in the banking industry, and I can tell you that the decisions made in the latter, private sector area are much more rationally related to reality (because of the imperative that the free market distributes resources in proportion to agents’ contributions to society) than in the former, which features government-run institutions heavily dependent upon tax dollars (directly or subsidized) where it is political power, not merit, that determines the distribution of resources. I could, but won’t, give a number of examples of this personally known by me just from my own institution, and others at which I’ve taught.
So when in Louisiana you have state senators and former regents complaining about political agendas to ditch certain people and to bring in others, and to reorganize the entire structure of higher education apparently to favor a certain interest led by the governor’s husband, as far-fetched as all of this sounds, not only is it believable, it might even be true. That by itself doesn’t mean the personnel changes or potential reorganization would not be positive. But it would be reprehensible if the reason for such changes was not after careful study of all available facts and options, but because of politics.
This is why the search for a new chancellor for the Louisiana State University System, new appointees to the Board of Regents, and any alterations to the organization of higher education in the state that may result must be scrutinized very carefully by those connected to higher education, legislators, and the citizenry. Even that may not be enough to prevent politics – even with procedures to maximize impartiality I’ve seen rigged search committees/pre-determined hiring decisions, “studies” that blatantly push one side of an argument, and Gov. Kathleen Blanco can stick whomever she wants on the Board of Regents where they have the power to do whatever they want (short of legislative intervention).
Not reelecting Blanco would nip in the bud the possibility of this specific issue becoming a problem, but the general conditions remain regardless. Only a vigilant public can control for that. So, even if living in the real world takes up so much time and effort, keeping up with what goes on in the unreal world of Louisiana higher education is something all citizens need to do to make it work the best that it can.
(P.S. Note disclaimer in small type below for those of you who are unable to understand the obvious.)
13.7.06
Blanco, special interests try to spin her veto choices
All of Gov. Kathleen Blanco, cable companies, and local governments went into damage control mode to justify the special treatment handed out to certain special interests, to the detriment of consumers and taxpayers, with her recent veto decisions.
Blanco is fooling nobody by her issuance of an executive order which will have nongovernmental recipients of line item largesse in the state budget submit documentation and financial statements regarding their uses of the funding. All it does is to require reporting, it does not mandate any evaluation of the actual merits of the uses to which the money is put. True accountability would be to make sure the spending is in accordance with an essential need of the state. Or, as Treasurer John Kennedy noted, the time to scrutinize questionable projects is before they get into the budget, not after they have been put there by legislators.
Cable television interests attempted to spin away criticism of the veto of HB 699, which leaves its provision essentially in a monopoly controlled by them and local governments. Sharon Kleinpeter, vice president of governmental and public affairs for Cox Communications (which, by the way, is reducing its presence in the state with the recent completed sale of its north Louisiana operations), said the bill was unnecessary because there are no real barriers to competition in the cable industry.
That’s not entirely true. The barrier is local government’s attitudes and economic reality – nothing in the law requires any government to accept any offer to provide services. At present, the large fixed costs for provision of infrastructure makes it prohibitive to new entrants. Thus, one part of HB 699 would have waived off certain costs to new entrants in order to encourage competition – costs, in fact, emanating from the whims of local governments. One was the ability of local government to use pass-through fees on cable subscribers to raise revenue, a stealth fee increase on its citizens. Another was mandating “buildout,” meaning forcing providers to create supply in economically unviable parts of their jurisdictions. Both mean higher rates, one as a fee, and the other as a subsidy.
This is why HB 699 would have reduced costs to consumers and provided more choice. And that’s why both local governments and cable companies fought it – the former to protect its additional revenues, the other to protect its monopoly status, with the latter point brought home when Cox immediately raised its rates in two locations the day of the HB 699 veto.
Thus, it is with incredible arrogance and/or stupidity that one representative of local interests, Roland Dartez, executive director of the Police Jury Association of Louisiana, said, “We really think we’re going to be able to protect the consumers a lot better this way.” No, it just protects your ability to squeeze more out of them. It is also with incredible skepticism that one should greet Louisiana Municipal Association Executive Director Tom Ed McHugh’s statement, “We can work with the industry … to get them out competing quicker than the bill itself.”
If McHugh is serious, he’ll ask for legislation which gets rid of the stealth fee increase ability of local governments and negates buildout provisions. After all, if rates do go down with competition, demand will increase supply which will bring more money into government coffers from the sales tax on the rates and it will increase the economic incentives to supply in areas previously unprofitable. If he doesn’t, it shows his group's members merely wants to protect their power and privilege.
Legislation along these lines needs to reappear and pass next session. Maybe in an election year Blanco will listen more closely to the people than to special interests.
Blanco is fooling nobody by her issuance of an executive order which will have nongovernmental recipients of line item largesse in the state budget submit documentation and financial statements regarding their uses of the funding. All it does is to require reporting, it does not mandate any evaluation of the actual merits of the uses to which the money is put. True accountability would be to make sure the spending is in accordance with an essential need of the state. Or, as Treasurer John Kennedy noted, the time to scrutinize questionable projects is before they get into the budget, not after they have been put there by legislators.
Cable television interests attempted to spin away criticism of the veto of HB 699, which leaves its provision essentially in a monopoly controlled by them and local governments. Sharon Kleinpeter, vice president of governmental and public affairs for Cox Communications (which, by the way, is reducing its presence in the state with the recent completed sale of its north Louisiana operations), said the bill was unnecessary because there are no real barriers to competition in the cable industry.
That’s not entirely true. The barrier is local government’s attitudes and economic reality – nothing in the law requires any government to accept any offer to provide services. At present, the large fixed costs for provision of infrastructure makes it prohibitive to new entrants. Thus, one part of HB 699 would have waived off certain costs to new entrants in order to encourage competition – costs, in fact, emanating from the whims of local governments. One was the ability of local government to use pass-through fees on cable subscribers to raise revenue, a stealth fee increase on its citizens. Another was mandating “buildout,” meaning forcing providers to create supply in economically unviable parts of their jurisdictions. Both mean higher rates, one as a fee, and the other as a subsidy.
This is why HB 699 would have reduced costs to consumers and provided more choice. And that’s why both local governments and cable companies fought it – the former to protect its additional revenues, the other to protect its monopoly status, with the latter point brought home when Cox immediately raised its rates in two locations the day of the HB 699 veto.
Thus, it is with incredible arrogance and/or stupidity that one representative of local interests, Roland Dartez, executive director of the Police Jury Association of Louisiana, said, “We really think we’re going to be able to protect the consumers a lot better this way.” No, it just protects your ability to squeeze more out of them. It is also with incredible skepticism that one should greet Louisiana Municipal Association Executive Director Tom Ed McHugh’s statement, “We can work with the industry … to get them out competing quicker than the bill itself.”
If McHugh is serious, he’ll ask for legislation which gets rid of the stealth fee increase ability of local governments and negates buildout provisions. After all, if rates do go down with competition, demand will increase supply which will bring more money into government coffers from the sales tax on the rates and it will increase the economic incentives to supply in areas previously unprofitable. If he doesn’t, it shows his group's members merely wants to protect their power and privilege.
Legislation along these lines needs to reappear and pass next session. Maybe in an election year Blanco will listen more closely to the people than to special interests.
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