When the Gov. Kathleen Blanco Administration got the advantage on Louisiana House Republicans last week on HB 3, it seemed curious why they didn’t press their advantage. Now we see it is part of a more complicated strategy demonstrating House Republicans still have fight in them to bring more sane spending practices to the state.
HB 3 is the enabling bill to bond out capital outlay projects listed in HB 2, but requires a two-thirds vote. Enough of the minority House Republicans have voted against it to keep it from passing. But last week it appeared enough defections among them would occur to allow Democrat Blanco’s House Democrat leadership to ram it through – and they did, but only after some delay as negotiations continued concerning the GOP’s next tactic.
As now revealed publicly, this reverted to the one they pulled off in last year’s special session, regarding the state’s spending cap. The Constitution allows spending by state government in a year to grow only as fast as the economy; spending beyond that requires the two-thirds vote which enough Republicans can block, and did months ago.
13.6.07
Blanco budget blather erroneous, unconvincing
If Gov. Kathleen Blanco ever taught English composition before her political career, it doesn’t show in her latest press release defending her budget now in front of the Legislature. This document shows she clearly doesn’t know what words mean and she uses them in ways that don’t support her attempted message.
Take the word “significant,” where she argues “I have asked the Legislature to adopt significant tax relief for our citizens.” While her roughly $150 million in proposed tax cuts, many not directly to citizens, could sound like a lot, it represents barely more than a half percent of the entire budget – insignificant.
How about the word “balanced,” where she states “I believe the people deserve a balanced package that includes the tax relief we all want, while making the bold investments that will lift up Louisiana.” But the portion of tax cuts in her budget represented less than 5 percent of the overall surplus, and the new recurring commitments are about a third of that total – terribly imbalanced on the spending side.
Or the word “investment,” which Blanco uses to buttress her “balanced” claim in referring to the free spending of her budget, lumping both one-time and recurring expenditures as “investments.” Some of those, especially of the one-time variety such as transportation needs, you could call “investments” because they have a good chance of producing long-term beneficial results (with the notable exception of funds to attract jobs). But other, mainly recurring, expenses such as creation of a thousand or so new jobs in a state whose population is shrinking and giving raises to them and to public school teachers without any individual accountability just throws good money after bad.
One additional demonstration that casts doubt on whether Blanco even understands what she writes is her passage “These investments will allow us to provide even greater tax relief in the future, as we decrease dependency on state programs and increase the quality of life for all of our citizens.” In other words, she asserts that the state has to spend first and therefore be the engine of economic growth in order for the citizens to have their monies returned to them only sometime down the road.
This simply is ludicrous and reflective of her core liberalism. People, not government, drive economic growth so the more money that they can keep the more reliably produced is that growth, so tax cuts must come prior. Further, she is entirely oblivious to the fact that her desire to make large increases in recurring expenditures in many cases will increase dependency not so directly on state programs, but the state itself, an inefficient use of resources that will sap growth.
Let’s put it this way, if Blanco decides to launch a post-political career as an investment adviser who will “invest” your money in a “balanced” way to give you “significant” returns sometime down the road, don’t walk away from her, run.
Take the word “significant,” where she argues “I have asked the Legislature to adopt significant tax relief for our citizens.” While her roughly $150 million in proposed tax cuts, many not directly to citizens, could sound like a lot, it represents barely more than a half percent of the entire budget – insignificant.
How about the word “balanced,” where she states “I believe the people deserve a balanced package that includes the tax relief we all want, while making the bold investments that will lift up Louisiana.” But the portion of tax cuts in her budget represented less than 5 percent of the overall surplus, and the new recurring commitments are about a third of that total – terribly imbalanced on the spending side.
Or the word “investment,” which Blanco uses to buttress her “balanced” claim in referring to the free spending of her budget, lumping both one-time and recurring expenditures as “investments.” Some of those, especially of the one-time variety such as transportation needs, you could call “investments” because they have a good chance of producing long-term beneficial results (with the notable exception of funds to attract jobs). But other, mainly recurring, expenses such as creation of a thousand or so new jobs in a state whose population is shrinking and giving raises to them and to public school teachers without any individual accountability just throws good money after bad.
One additional demonstration that casts doubt on whether Blanco even understands what she writes is her passage “These investments will allow us to provide even greater tax relief in the future, as we decrease dependency on state programs and increase the quality of life for all of our citizens.” In other words, she asserts that the state has to spend first and therefore be the engine of economic growth in order for the citizens to have their monies returned to them only sometime down the road.
This simply is ludicrous and reflective of her core liberalism. People, not government, drive economic growth so the more money that they can keep the more reliably produced is that growth, so tax cuts must come prior. Further, she is entirely oblivious to the fact that her desire to make large increases in recurring expenditures in many cases will increase dependency not so directly on state programs, but the state itself, an inefficient use of resources that will sap growth.
Let’s put it this way, if Blanco decides to launch a post-political career as an investment adviser who will “invest” your money in a “balanced” way to give you “significant” returns sometime down the road, don’t walk away from her, run.
12.6.07
Grinding axes detracts from providing real solutions
You know vested interests that have run this state into the ground are scared when they try to take advantage of a non-story created an opportunist to try to score cheap political points to distract the public from a threat to their power and privilege.
Originally on New Orleans’ WWL liberal Garland Robinette’s radio talk show, and then on this area’s balanced Pat Culverhouse program, local demographer and for-hire political consultant Elliott Stonecipher asserted that Republican state Rep. Mike Powell, his daughter Rachel, and Republican state Senate candidate Jay Murrell had done unpaid work for former Shreveport mayoral candidate Jerry Jones. The reporting he questioned according to state campaign finance records is one for $12,344.75 paid on Jun. 6, 2006 to CPL Media Marketing, run by former Shreveport Journal editor Carl Liberto.
But Liberto confirms that Rachel Powell was employed by him for this work. And did Stonecipher witness this transaction he claims was fradulent? No, he just “knew” of it. Jones himself can’t verify it, either. Not only does he say all three individuals including Rachel Powell were present when he discussed the matter, but obviously he knew it was for CPL because that’s how he reported it on his form. And it’s entirely reasonable that Rachel Powell, a recent college graduate relatively inexperienced in this field, would be accompanied by her father and family friend Murrell for assistance, as well as that Mike Powell and Murrell themselves provided advice to Jones (as they have many times for many Republican candidates in Caddo Parish) during his campaign. There’s simply nothing untoward about any of this.
Despite this, now Democrat state Sen. Robert Adley says he wants the matter referred to the Louisiana Board of Ethics regarding Mike Powell, who also serves as the Louisiana Republican Party’s counsel. One must wonder on what basis Adley can file a complaint about Mike Powell under the ethics law – after all, the Jones campaign would be the one on the hook for misreporting. Is Adley actually claiming Mike Powell took a bribe, money out of his daughter’s and Liberto’s pockets for some unfathomable purpose despite all evidence to the contrary?
So why did this non-story hit Gannett newspapers, and now, a year after the expenditure took place? The answer to the first question is it serves the varied interests of the reporter, John Hill, Stonecipher, and Adley (as a proxy for area and statewide Democrat interests).
Stonecipher (who in essence is accusing Mike Powell of some undefined ethical lapse) himself had a conflict with Powell when Powell served on the Caddo Parish School Board, concerning a friend of Stonecipher’s employed by the Board alleged to have behaved unethically the act of which may have involved Stonecipher (of which a caller to the Culverhouse show reminded the audience); thus, potentially motivating his wild remarks on this matter. Further, Stonecipher has a publicity-seeking tendency, often reflected in his remarks to the media about politics that, to those unlike Stonecipher who are formally trained in the area such as me, sometimes come across as goofy, if not outright counter-factual. Getting your name out in the compliant media, even if you don’t really know what you’re talking about, can’t be bad for his business – especially when you try to settle an old score and can impugn the reputation of one of your competitors (the liberal Democrat Liberto) in the process.
Hill, who I have known for over 15 years, is in the business of selling newspapers and who, in my opinion, in that time span regrettably has become more partisan in tone, probably saw this as something worthy of reporting – particularly because it is election season and one of the names involved, Murrell, is newly running for office. That’s where Adley comes in.
Adley is part of the good-old-boy elective structure of Bossier Parish, comprised of Democrats and Republicans-In-Name-Only – of whom the latter’s electoral leader and Adley ally, state Rep. Billy Montgomery, is an opponent of Murrell’s for the Senate. (Powell is unlikely to face any serious opposition for reelection this fall.) This band fears Montgomery’s loss, even more Murrell’s winning so anything, no matter how trumped up, that casts even indirect negative aspersions on Murrell those of Adley’s ilk will pursue. (Adley also may do this to distract voters from his attempts as a Senate leader this legislative session to defeat meaningful tax reductions – in a committee meeting he called the reduction of income tax rates “irresponsible” – despite a record state surplus).
There’s just no credibility to any of this, and Adley knows this (or obviously he’s not very bright). Opponents of Powell and Murrell want to manufacture an issue and to try to keep it alive, given the Board’s schedule, into September – a month before elections. It’s these kinds of things which reaffirm my own personal support for Murrell – we need to move away from petty, obfuscating, baseless political tactics and start talking real solutions that those of Adley’s stripes who are long on rhetoric have failed to provide for so many years.
Originally on New Orleans’ WWL liberal Garland Robinette’s radio talk show, and then on this area’s balanced Pat Culverhouse program, local demographer and for-hire political consultant Elliott Stonecipher asserted that Republican state Rep. Mike Powell, his daughter Rachel, and Republican state Senate candidate Jay Murrell had done unpaid work for former Shreveport mayoral candidate Jerry Jones. The reporting he questioned according to state campaign finance records is one for $12,344.75 paid on Jun. 6, 2006 to CPL Media Marketing, run by former Shreveport Journal editor Carl Liberto.
But Liberto confirms that Rachel Powell was employed by him for this work. And did Stonecipher witness this transaction he claims was fradulent? No, he just “knew” of it. Jones himself can’t verify it, either. Not only does he say all three individuals including Rachel Powell were present when he discussed the matter, but obviously he knew it was for CPL because that’s how he reported it on his form. And it’s entirely reasonable that Rachel Powell, a recent college graduate relatively inexperienced in this field, would be accompanied by her father and family friend Murrell for assistance, as well as that Mike Powell and Murrell themselves provided advice to Jones (as they have many times for many Republican candidates in Caddo Parish) during his campaign. There’s simply nothing untoward about any of this.
Despite this, now Democrat state Sen. Robert Adley says he wants the matter referred to the Louisiana Board of Ethics regarding Mike Powell, who also serves as the Louisiana Republican Party’s counsel. One must wonder on what basis Adley can file a complaint about Mike Powell under the ethics law – after all, the Jones campaign would be the one on the hook for misreporting. Is Adley actually claiming Mike Powell took a bribe, money out of his daughter’s and Liberto’s pockets for some unfathomable purpose despite all evidence to the contrary?
So why did this non-story hit Gannett newspapers, and now, a year after the expenditure took place? The answer to the first question is it serves the varied interests of the reporter, John Hill, Stonecipher, and Adley (as a proxy for area and statewide Democrat interests).
Stonecipher (who in essence is accusing Mike Powell of some undefined ethical lapse) himself had a conflict with Powell when Powell served on the Caddo Parish School Board, concerning a friend of Stonecipher’s employed by the Board alleged to have behaved unethically the act of which may have involved Stonecipher (of which a caller to the Culverhouse show reminded the audience); thus, potentially motivating his wild remarks on this matter. Further, Stonecipher has a publicity-seeking tendency, often reflected in his remarks to the media about politics that, to those unlike Stonecipher who are formally trained in the area such as me, sometimes come across as goofy, if not outright counter-factual. Getting your name out in the compliant media, even if you don’t really know what you’re talking about, can’t be bad for his business – especially when you try to settle an old score and can impugn the reputation of one of your competitors (the liberal Democrat Liberto) in the process.
Hill, who I have known for over 15 years, is in the business of selling newspapers and who, in my opinion, in that time span regrettably has become more partisan in tone, probably saw this as something worthy of reporting – particularly because it is election season and one of the names involved, Murrell, is newly running for office. That’s where Adley comes in.
Adley is part of the good-old-boy elective structure of Bossier Parish, comprised of Democrats and Republicans-In-Name-Only – of whom the latter’s electoral leader and Adley ally, state Rep. Billy Montgomery, is an opponent of Murrell’s for the Senate. (Powell is unlikely to face any serious opposition for reelection this fall.) This band fears Montgomery’s loss, even more Murrell’s winning so anything, no matter how trumped up, that casts even indirect negative aspersions on Murrell those of Adley’s ilk will pursue. (Adley also may do this to distract voters from his attempts as a Senate leader this legislative session to defeat meaningful tax reductions – in a committee meeting he called the reduction of income tax rates “irresponsible” – despite a record state surplus).
There’s just no credibility to any of this, and Adley knows this (or obviously he’s not very bright). Opponents of Powell and Murrell want to manufacture an issue and to try to keep it alive, given the Board’s schedule, into September – a month before elections. It’s these kinds of things which reaffirm my own personal support for Murrell – we need to move away from petty, obfuscating, baseless political tactics and start talking real solutions that those of Adley’s stripes who are long on rhetoric have failed to provide for so many years.
11.6.07
Electoral, public pressure needed to pry open records
It’s like pulling teeth when it comes to getting information from the Legislature about nongovernmental entities it funds with Louisiana taxpayer dollars. This year looking to be $7 million worth, almost all of these groups have nothing to do with public policy or improving the quality of life for the state. As one insider put it referring to one particular organization slated for $300,000, the group is “a typical [legislator] pass-through to friends.”
Only last year, under heavy public pressure, did Gov. Kathleen Blanco start requesting any minimal information at all about these amendments, the legislator requesters of which generally are known to only a few individuals. The Legislature then grudgingly followed. But that seems to be as far as the at least the House of Representatives will go. A request by a newspaper to find out who was requesting what – which are forms sent by representatives to the Appropriations Committee – was turned down by the body’s appropriate officer, Clerk Butch Speer.
Speer argued that in his opinion, based upon LA Const. Art. III, Section 8, as interpreted by the LA First Circuit Court of Appeals in Copsey v. Baer, 91-0912 (Dec. 27, 1991) 539 So.2d 685 (La. App. 1st Cir.), that the information was “internal communications of legislators with their staff” because it was “background information provided by legislators to their staff” and thus exempt. Whether this assertion actually comports with case law is another matter.
The Constitution’s connection to Speer’s claim is tenuous, the relevant passage being, “No member shall be questioned elsewhere for any speech in either house.” The court case and opinion in question that apparently expands this passage to cover this instance I don’t have access to at this time, but a helpful summary I found on its surface gives Speer some support: “legislative work files related to two bills from prior sessions of the Louisiana legislature were privileged from public records disclosure under the legislative privileges and immunities clause of the Louisiana Constitution, Article III, § 8,” and the opinion states that “demand for legislative files in this case calls for an inquiry into the motivations behind the preparation and introduction of legislative instruments into the Louisiana Legislature….”
Without knowing more (and not being a lawyer much less one with expertise in this area), it seems to me that Speer’s interpretation is challengeable. But it’s not necessary to pursue judicial solutions to this problem when two political solutions exist that can change the situation almost immediately.
One would be for the Senate to get on the stick and pass HB 266 by state Rep. Blade Morrish. This bill would legally require the provision of the information in question. The bill sailed through both House committee and the chamber itself without any opposition, landing in the Senate Finance Committee almost a month ago – which has sat on it ever since. Don’t count on any movement unless there is a great public outcry.
But even quicker would be if Blanco would come out and announce she would line-item veto any spending of this nature whose sponsor does not publicly identify himself. This has even less chance of happening than the passage of HB 266 – and is one more reason why the citizenry should elect Rep. Bobby Jindal as governor this fall, as he has served notice that he won’t put up with this nonsense.
Only last year, under heavy public pressure, did Gov. Kathleen Blanco start requesting any minimal information at all about these amendments, the legislator requesters of which generally are known to only a few individuals. The Legislature then grudgingly followed. But that seems to be as far as the at least the House of Representatives will go. A request by a newspaper to find out who was requesting what – which are forms sent by representatives to the Appropriations Committee – was turned down by the body’s appropriate officer, Clerk Butch Speer.
Speer argued that in his opinion, based upon LA Const. Art. III, Section 8, as interpreted by the LA First Circuit Court of Appeals in Copsey v. Baer, 91-0912 (Dec. 27, 1991) 539 So.2d 685 (La. App. 1st Cir.), that the information was “internal communications of legislators with their staff” because it was “background information provided by legislators to their staff” and thus exempt. Whether this assertion actually comports with case law is another matter.
The Constitution’s connection to Speer’s claim is tenuous, the relevant passage being, “No member shall be questioned elsewhere for any speech in either house.” The court case and opinion in question that apparently expands this passage to cover this instance I don’t have access to at this time, but a helpful summary I found on its surface gives Speer some support: “legislative work files related to two bills from prior sessions of the Louisiana legislature were privileged from public records disclosure under the legislative privileges and immunities clause of the Louisiana Constitution, Article III, § 8,” and the opinion states that “demand for legislative files in this case calls for an inquiry into the motivations behind the preparation and introduction of legislative instruments into the Louisiana Legislature….”
Without knowing more (and not being a lawyer much less one with expertise in this area), it seems to me that Speer’s interpretation is challengeable. But it’s not necessary to pursue judicial solutions to this problem when two political solutions exist that can change the situation almost immediately.
One would be for the Senate to get on the stick and pass HB 266 by state Rep. Blade Morrish. This bill would legally require the provision of the information in question. The bill sailed through both House committee and the chamber itself without any opposition, landing in the Senate Finance Committee almost a month ago – which has sat on it ever since. Don’t count on any movement unless there is a great public outcry.
But even quicker would be if Blanco would come out and announce she would line-item veto any spending of this nature whose sponsor does not publicly identify himself. This has even less chance of happening than the passage of HB 266 – and is one more reason why the citizenry should elect Rep. Bobby Jindal as governor this fall, as he has served notice that he won’t put up with this nonsense.
10.6.07
Shreveport needs to support true cable provision reform
In April, the Shreveport City Council joined other local governing authorities in Louisiana in unanimously passing a resolution stating it that invites competition for local provision of cable television services. This was a feel-good-only instrument that does practically nothing to encourage competition or to lower prices for cable customers, and instead creates more opportunity to empower government and incumbent monopolistic cable providers at the expense of consumers.
Actually, it could have been worse. A large portion of the resolution was lifted from language formulated by the Louisiana Municipal Association, but it left out the strongest part of the suggested verbiage that would have stated it was Shreveport’s intent not to enter a franchise agreement with any provider that did not adhere to an attached “model” cable franchise agreement – an agreement skewed in favor of government and existing providers.
Why is the LMA so keen on slighting ratepayers by pushing this resolution and agreement? Because last year, with his most significant bill in his nearly-two decades in the state Legislature, state Rep. Billy Montgomery nearly won a big victory for consumers. HB 699 would have created less bureaucracy, less government intrusion, and genuine competition to bring down cable prices while increasing quality had it been enacted into law.
This bill would have made significant changes to the way in which cable franchising is done in Louisiana:
Currently, negotiating is done locally for cable service which is almost exclusively granted to large cable companies that allows local government to extract concessions from operators such as requiring the making available of service to financially unprofitable customers, in exchange for which cable companies are unregulated in terms of their prices they may charge to customers and in the kinds of payments they must make to local governments (usable as general revenues) which then can be passed along to consumers. Further, local governments are not compelled to grant contracts to providers other than cable even if the offer made by the other providers is much superior to the existing contract with the cable company.
The bill would grant a statewide franchise to phone companies that would make local governments unable to specify requirements concerning customer service and “buildout” (mandating service provision in potentially unprofitable areas), as well as not being able to force providers to carry public access channels or other channels favored by local governments on the basic (minimum) tier of coverage and would allow the state to supersede local right-of-way restrictions.
Thus, the question is, should greater competition be encouraged by allowing in phone companies under fewer restrictions than other franchisees have contracted for (some over 20 years) which will lower prices to consumers and reduce revenues to local governments, or is it “unfair” to do so? Specifically, by ridding the phone companies of having to adhere to local standards (like buildout, customer service requirements not already comprehensively covered by federal law, channel provision, and assessing extra fees that can be passed on to consumers), would that reduce the barriers to entry (costs) to the market enough to encourage phone companies not only to get in the business of offering existing tiers of channels plus channel-selectable services at no extra cost (note that cable companies due to their near-monopoly status offer only a limited form of this and at premium prices) but to expand those services, given their start-up costs are lower because they do not have to adhere to the local demands and the extra expense that they entail?
Opponents brought up a number of spurious arguments against the bill which all fail because of a simple fact: the increased competition brought about by this bill, similar ones of which already have passed in numerous states, will lead to lower costs, better service, and solve any genuine problems, such as encouraging buildout not through government mandate but by market forces. Last month, an American Enterprise Institute- Brookings Joint Center for Regulatory Studies publication noted a bill substantially like HB 699 would save consumers three times the revenue local governments lost by it.
Unfortunately, despite his long tenure Montgomery did not have the power to prevent defenders of the status quo from getting Gov. Kathleen Blanco to veto the bill. In response, the LMA launched a pre-emptive strike with its sham posing as a supporter of competition and reform with its agreement language in order to try to take the steam out of genuine reform attempts like a reintroduced version of HB 699 (which also should allow present franchisees to operate under the new rules). Its suggestion basically invites in new competitors under the old, anti-competitive rules, with the exception that matching offers will be accepted.
Actually, it could have been worse. A large portion of the resolution was lifted from language formulated by the Louisiana Municipal Association, but it left out the strongest part of the suggested verbiage that would have stated it was Shreveport’s intent not to enter a franchise agreement with any provider that did not adhere to an attached “model” cable franchise agreement – an agreement skewed in favor of government and existing providers.
Why is the LMA so keen on slighting ratepayers by pushing this resolution and agreement? Because last year, with his most significant bill in his nearly-two decades in the state Legislature, state Rep. Billy Montgomery nearly won a big victory for consumers. HB 699 would have created less bureaucracy, less government intrusion, and genuine competition to bring down cable prices while increasing quality had it been enacted into law.
This bill would have made significant changes to the way in which cable franchising is done in Louisiana:
Opponents brought up a number of spurious arguments against the bill which all fail because of a simple fact: the increased competition brought about by this bill, similar ones of which already have passed in numerous states, will lead to lower costs, better service, and solve any genuine problems, such as encouraging buildout not through government mandate but by market forces. Last month, an American Enterprise Institute- Brookings Joint Center for Regulatory Studies publication noted a bill substantially like HB 699 would save consumers three times the revenue local governments lost by it.
Unfortunately, despite his long tenure Montgomery did not have the power to prevent defenders of the status quo from getting Gov. Kathleen Blanco to veto the bill. In response, the LMA launched a pre-emptive strike with its sham posing as a supporter of competition and reform with its agreement language in order to try to take the steam out of genuine reform attempts like a reintroduced version of HB 699 (which also should allow present franchisees to operate under the new rules). Its suggestion basically invites in new competitors under the old, anti-competitive rules, with the exception that matching offers will be accepted.
In case you're wondering, this legislative session Montgomery, nor any other legislator, did anything to bring back a version of HB 699. Meanwhile, local cable companies across the state have begin rolling out phone service, taking advantage of statewide approval to do this -- an option denied phone companies trying to get into the cable business when HB 699 was vetoed.
If serious about assisting consumers through lower prices and promoting quality, the Council and other local entities will pass a resolution supporting the concepts of last year’s HB 699, instead of tagging along behind a big-government advocacy smokescreen that allows them to continue to inflict backdoor revenue-raising franchise fees passed through onto consumers.
7.6.07
Report demonstrates coming crisis of Blanco budget
The Louisiana Family Forum has issued a report on the current fiscal situation in Louisiana. Authored by former Legislative Fiscal Officer Johnny Rombach, its enthusiasm sometimes gets in the way of its message, but regardless the latter is unmistakable: the state is headed towards a fiscal crisis, one potentially exacerbated by policy choices being made during this legislative session.
Rombach makes three points in particular. First, the proposed operating budget of the state creates commitments likely unsustainable in the long run. Essentially, the report argues that the injection of federal aid into the state as a result of the 2005 hurricane disasters has created what we social scientists call a “discontinuity” in the rate of growth of revenue-gathering by the state. It states that the budget was growing at a particular rate, but the presence of aid (here the report gets muddy because it identifies the “Stelly” tax swap – more about that is in the report – and higher oil prices also as contributory factors) manufactured a temporary increase in the rate.
According to the report, the problem will come because recurring spending commitments track that bump up and state government assumes the revenue “bump” will continue to be reflected in revenue-gathering even if the rate of growth goes back to its pre-disaster level. In other words, in their spending decisions (which Rombach points out that 96 percent of that increase over the next couple of years is recurring in nature) Gov. Kathleen Blanco and her Democrat legislative allies assume that extra shot of revenues is not a one-time thing but will continue indefinitely – an assumption the report correctly points out is reckless.
Second, the Stelly Plan – lowering sales taxes but increasing income taxes – the report notes has the perverse effect of increasing the most marginal tax rates among the middle categories of filers, with the worst starting for two-filing families around $65,000 and ameliorating in higher brackets. This is because of the elimination of deductions: the lowest income families take few if any, barely if at all lowering their already low marginal rate, while for the higher income families the amount of deductions that can be taken in almost all cases are relatively small compared to their total incomes, so the relative increase they faced was not as large.
Rombach recommends restoring these mortgage and charitable deductions – a move the Legislature seems prepared to take. Unfortunately, lost in the criticism of the Stelly Plan is an overall critique of the very progressive income tax structure in Louisiana (which the report notes in passing that the Stelly Plan exacerbated, and it does call for lowering tax bracket thresholds to improve this) which is probably a greater impediment to economic freedom and growth in Louisiana. This would emphasize why the Stelly increases were suboptimal – taking money out of the hands of the most productive citizens.
Third, the report investigates the state of secondary and elementary education spending in Louisiana, given that a justification for a good portion of the new budgetary commitments is for this area, particularly raising the salaries of teachers. Echoing a point made often in this space, by no means does Louisiana under-fund in this area, particularly given the dismal performance of schools on a statewide basis and with no means to ensure educator accountability, despite the fact that these implementing measures, such as merit pay, improves education quality.
While the report sometimes is a bit unclear in its assumptions and methodological details, its premise seems sound: Blanco’s current budget makes imprudent choices that will haunt the state fiscally for years to come.
Rombach makes three points in particular. First, the proposed operating budget of the state creates commitments likely unsustainable in the long run. Essentially, the report argues that the injection of federal aid into the state as a result of the 2005 hurricane disasters has created what we social scientists call a “discontinuity” in the rate of growth of revenue-gathering by the state. It states that the budget was growing at a particular rate, but the presence of aid (here the report gets muddy because it identifies the “Stelly” tax swap – more about that is in the report – and higher oil prices also as contributory factors) manufactured a temporary increase in the rate.
According to the report, the problem will come because recurring spending commitments track that bump up and state government assumes the revenue “bump” will continue to be reflected in revenue-gathering even if the rate of growth goes back to its pre-disaster level. In other words, in their spending decisions (which Rombach points out that 96 percent of that increase over the next couple of years is recurring in nature) Gov. Kathleen Blanco and her Democrat legislative allies assume that extra shot of revenues is not a one-time thing but will continue indefinitely – an assumption the report correctly points out is reckless.
Second, the Stelly Plan – lowering sales taxes but increasing income taxes – the report notes has the perverse effect of increasing the most marginal tax rates among the middle categories of filers, with the worst starting for two-filing families around $65,000 and ameliorating in higher brackets. This is because of the elimination of deductions: the lowest income families take few if any, barely if at all lowering their already low marginal rate, while for the higher income families the amount of deductions that can be taken in almost all cases are relatively small compared to their total incomes, so the relative increase they faced was not as large.
Rombach recommends restoring these mortgage and charitable deductions – a move the Legislature seems prepared to take. Unfortunately, lost in the criticism of the Stelly Plan is an overall critique of the very progressive income tax structure in Louisiana (which the report notes in passing that the Stelly Plan exacerbated, and it does call for lowering tax bracket thresholds to improve this) which is probably a greater impediment to economic freedom and growth in Louisiana. This would emphasize why the Stelly increases were suboptimal – taking money out of the hands of the most productive citizens.
Third, the report investigates the state of secondary and elementary education spending in Louisiana, given that a justification for a good portion of the new budgetary commitments is for this area, particularly raising the salaries of teachers. Echoing a point made often in this space, by no means does Louisiana under-fund in this area, particularly given the dismal performance of schools on a statewide basis and with no means to ensure educator accountability, despite the fact that these implementing measures, such as merit pay, improves education quality.
While the report sometimes is a bit unclear in its assumptions and methodological details, its premise seems sound: Blanco’s current budget makes imprudent choices that will haunt the state fiscally for years to come.
6.6.07
Montgomery set to hand Blanco victory over his party
Democrat Gov. Kathleen Blanco looks ready to reverse her loss of months ago to Republicans to increase dramatically state spending – thanks to Republican (in name only) state Rep. Billy Montgomery and if she can get an all-points-bulletin out for Democrat state Rep. Romo Romero.
HB 3 is the enabling legislation to sell bonds to continue capital outlay funding in HB 2, but to pass requires a two-thirds vote of the seated membership of each Louisiana Legislature chamber. Last week, enough Republicans got together to prevent attaining those 70 votes, saying they would keep the bill from passing until Blanco and her Democrat leadership refrained from ramming through a portion of over a billion dollars in recurring spending increases in favor of increasing the relative pittance of tax cuts offered by the Democrats. The GOP is asking for a shift of about $350 million away from spending and into the people’s pockets.
Last December, a different, procedural move enabled Republicans to stop a similar move by Blanco. As the months progressed, their warnings about the cooling budget picture proved true making it prudent for the state to make minimal new commitments. But, true to their roots, the free-spending Democrats ignored the data and pressed on, forcing Republicans into a repeat attempt to slow the spending train down.
Given their current numbers, the GOP could not afford more than seven defections. But given that there are a few liberals among those elected as Republicans, and a few more who were elected initially as Democrats who switched to the GOP out of political opportunism, there remained plenty of opportunities for Democrats to pick off enough of these RINOs.
Last week’s vote showed the Democrats were close. Theoretically, they were two short when assuming those seven who were absent would vote by party. Two of the three Republicans violated that, meaning no further defections could be tolerated.
But in yesterday’s vote, as I predicted opportunist Montgomery flipped his vote (three Republicans were absent but that is like a negative vote so it did not harm their position). That would have given the Democrats 70 votes – except that Romero missed the vote, temporarily saving the House GOP’s effort to cut taxes and spending, buying it a little more time to bargain.
However, with Montgomery, who is running for the Senate in the fall being term-limited out of the House, now off the reservation, if Blanco can get all of their supporters to show up, Montgomery will earn a dubious distinction. His was the crucial vote to increase net taxes across the state in 2002, and now likely his will be the crucial vote that prevents meaningful tax cuts – something Senate District 37 voters should keep in mind as they head to the polls this fall.
HB 3 is the enabling legislation to sell bonds to continue capital outlay funding in HB 2, but to pass requires a two-thirds vote of the seated membership of each Louisiana Legislature chamber. Last week, enough Republicans got together to prevent attaining those 70 votes, saying they would keep the bill from passing until Blanco and her Democrat leadership refrained from ramming through a portion of over a billion dollars in recurring spending increases in favor of increasing the relative pittance of tax cuts offered by the Democrats. The GOP is asking for a shift of about $350 million away from spending and into the people’s pockets.
Last December, a different, procedural move enabled Republicans to stop a similar move by Blanco. As the months progressed, their warnings about the cooling budget picture proved true making it prudent for the state to make minimal new commitments. But, true to their roots, the free-spending Democrats ignored the data and pressed on, forcing Republicans into a repeat attempt to slow the spending train down.
Given their current numbers, the GOP could not afford more than seven defections. But given that there are a few liberals among those elected as Republicans, and a few more who were elected initially as Democrats who switched to the GOP out of political opportunism, there remained plenty of opportunities for Democrats to pick off enough of these RINOs.
Last week’s vote showed the Democrats were close. Theoretically, they were two short when assuming those seven who were absent would vote by party. Two of the three Republicans violated that, meaning no further defections could be tolerated.
But in yesterday’s vote, as I predicted opportunist Montgomery flipped his vote (three Republicans were absent but that is like a negative vote so it did not harm their position). That would have given the Democrats 70 votes – except that Romero missed the vote, temporarily saving the House GOP’s effort to cut taxes and spending, buying it a little more time to bargain.
However, with Montgomery, who is running for the Senate in the fall being term-limited out of the House, now off the reservation, if Blanco can get all of their supporters to show up, Montgomery will earn a dubious distinction. His was the crucial vote to increase net taxes across the state in 2002, and now likely his will be the crucial vote that prevents meaningful tax cuts – something Senate District 37 voters should keep in mind as they head to the polls this fall.
5.6.07
Can electoral considerations save LA ethics bill?
No doubt that certain “supporters” of HB 730 amended it on the Louisiana House of Representatives floor last week, along some members who approved them and the bill as a whole, had the sole intention of trying to sink it later in the legislative process. But their efforts may backfire.
This bill by state Rep. Michael Jackson was to create simple, even innocuous, reporting requirements of legislators. Basically, all it would require them to do is to report contacts or ownership, directly or indirectly, with entities that deal with the state. It was next to nothing in ethics standards, but better than nothing.
On the floor, several amendments broadened the scope to include all state and local officials, even appointed ones, as well as candidates to offices by speeding up the effective date to Aug. 15. It made this a stronger bill, but the motive for many was to make its requirements seem so onerous and unworkable as to give political cover to legislators trying to defeat it.
Surely many House members who didn’t want even the original minimal requirements knew that its next stop was the Senate and Governmental Affairs Committee, which has gained a reputation in recent years under the chairmanship of a regular violator of ethics statutes state Sen. Charles Jones as a graveyard of ethics reform and incubator of measures that serve to increase the amount of potential corruption in the state political system, such as its support of laws designed to impair ballot security at higher taxpayer cost. They hope this committee will do their dirty work for them.
But will it? Senators know that voting against this will look bad to constituents, so anyone gunning for reelection with be hesitant to do so.
If you look at the committee’s composition, only three of its members, Chris Ullo and Noble Ellington with Jones, are term-limited – and Ellington plans to run for a House seat. Reviewing other committee members, it’s unlikely that ex-bagman Cleo Fields would support ethics legislation, but others are running for reelection. It’s possible that since five members are running for election of some sort in the fall, the votes would be there to pass the bill on.
Thus, it may be up to Jones himself to end the life of ethics reform. As chairman, unless the committee majority prefers otherwise, he can simply never bring up the bill. It also could be yanked out of committee by the entire Senate, but while committee and Senate majorities may vote for the bill if presented to them, but they won’t lift a finger to get the vote in front of them. Expect Jones to use his position to strangle even this mild ethics reform, with the blessing of many senators.
This bill by state Rep. Michael Jackson was to create simple, even innocuous, reporting requirements of legislators. Basically, all it would require them to do is to report contacts or ownership, directly or indirectly, with entities that deal with the state. It was next to nothing in ethics standards, but better than nothing.
On the floor, several amendments broadened the scope to include all state and local officials, even appointed ones, as well as candidates to offices by speeding up the effective date to Aug. 15. It made this a stronger bill, but the motive for many was to make its requirements seem so onerous and unworkable as to give political cover to legislators trying to defeat it.
Surely many House members who didn’t want even the original minimal requirements knew that its next stop was the Senate and Governmental Affairs Committee, which has gained a reputation in recent years under the chairmanship of a regular violator of ethics statutes state Sen. Charles Jones as a graveyard of ethics reform and incubator of measures that serve to increase the amount of potential corruption in the state political system, such as its support of laws designed to impair ballot security at higher taxpayer cost. They hope this committee will do their dirty work for them.
But will it? Senators know that voting against this will look bad to constituents, so anyone gunning for reelection with be hesitant to do so.
If you look at the committee’s composition, only three of its members, Chris Ullo and Noble Ellington with Jones, are term-limited – and Ellington plans to run for a House seat. Reviewing other committee members, it’s unlikely that ex-bagman Cleo Fields would support ethics legislation, but others are running for reelection. It’s possible that since five members are running for election of some sort in the fall, the votes would be there to pass the bill on.
Thus, it may be up to Jones himself to end the life of ethics reform. As chairman, unless the committee majority prefers otherwise, he can simply never bring up the bill. It also could be yanked out of committee by the entire Senate, but while committee and Senate majorities may vote for the bill if presented to them, but they won’t lift a finger to get the vote in front of them. Expect Jones to use his position to strangle even this mild ethics reform, with the blessing of many senators.
4.6.07
Shortfall response testifies to Blanco's lack of leadership
Is there any better illustration about the lack of leadership and refusal to take responsibility by Louisiana state government than how Democrat Gov. Kathleen Blanco proposes to “solve” the Road Home funding crisis?
The program for individual homeowner hurricane recovery looks to be $4.3 billion short, mostly because the state tried to pull a fast one on the federal government by surreptitiously expanding the program beyond the federal government’s intent to fund and shifting federal aid in ways federal law prohibits (the state claims it actually knows federal rules better than federal officials do and that the federal government should have known of these things). Despite being snookered, outraged federal officials and lawmakers kindly have taken the position that a bailout will occur if the state puts up some earnest money.
Blanco, who resisted that idea despite withering criticism, this weekend once again closed the barn door and ran after the horse, suddenly deciding to pledge to make up the shortfall with $718 million of funds – from the state in name only. Turns out they are mainly redirections of other federal funds for other purposes and also the recently waived matching requirement from the federal government for some of the over $60 billion the state has received from the federal government so far in recovery monies.
She complains that the state already has forked over $4.6 billion in its “own” funds to aid in recovery – itself a distortion of the truth. Take the sales tax money collected off the federal tens of billions of dollars, then slice out the state income tax proportion from all the imported workers assisting in the recovery, and you’ll find that’s close to that figure – it became the state’s money to spend only because the federal government made it available in the first place for the state to collect through taxation.
That fact illustrates that much of the state’s huge budget surplus is itself a creation of a bubble economy that already is dissipating. In essence, it’s a one-time bonus, so wouldn’t it make sense to spend it on a one-time thing like the Road Home instead of the pie-in-the-sky budget with large increases in recurring spending being pushed through the Legislature? Remarks to the state Senate Finance Committee by Blanco’s Commissioner of Administration Jerry Luke LeBlanc show just out of touch with reality the Blanco Administration is on this point.
LeBlanc, when asked why not dip into the state surplus for the Road Home shortfall, said “We have 144 members of the Legislature to deal with on that issue ... You don’t know what consensus you can reach.” Perhaps he can be forgiven for having been out of the Legislature for three whole years after a service there of over a decade for forgetting this, but the governor does have something called a line item veto. I’ll walk LeBlanc through this to help him out: Blanco calls in legislative leaders, tells them they had better commit a few hundred million of the surplus to Road Home, or she’ll use her line item veto take out about that much spending (vetoes that will be sustained with GOP legislator help) and then they can all get together in a special session in the middle of election season to dedicate it to the Road Home. She’d have that money set aside faster than it takes her to change her mind.
That’s called leadership, something to which Blanco is unsuited totally. Instead, she and her ilk that comprise the legislative leadership are like bratty, ignorant children who have to be dragged kicking and screaming into place until they do the right thing. The federal government is going to have to be the parent again here, in this case laying down one edict: take the $718 million thus pledged, add the $400 million set aside for the German steel mill that predictably never came to the state, and then it’ll talk about coughing up the rest. So this requires one more dose of tough love for the state government that refuses to grow up and take responsibility for its own actions and fate, instead of blaming others and wanting them to do the real work.
The program for individual homeowner hurricane recovery looks to be $4.3 billion short, mostly because the state tried to pull a fast one on the federal government by surreptitiously expanding the program beyond the federal government’s intent to fund and shifting federal aid in ways federal law prohibits (the state claims it actually knows federal rules better than federal officials do and that the federal government should have known of these things). Despite being snookered, outraged federal officials and lawmakers kindly have taken the position that a bailout will occur if the state puts up some earnest money.
Blanco, who resisted that idea despite withering criticism, this weekend once again closed the barn door and ran after the horse, suddenly deciding to pledge to make up the shortfall with $718 million of funds – from the state in name only. Turns out they are mainly redirections of other federal funds for other purposes and also the recently waived matching requirement from the federal government for some of the over $60 billion the state has received from the federal government so far in recovery monies.
She complains that the state already has forked over $4.6 billion in its “own” funds to aid in recovery – itself a distortion of the truth. Take the sales tax money collected off the federal tens of billions of dollars, then slice out the state income tax proportion from all the imported workers assisting in the recovery, and you’ll find that’s close to that figure – it became the state’s money to spend only because the federal government made it available in the first place for the state to collect through taxation.
That fact illustrates that much of the state’s huge budget surplus is itself a creation of a bubble economy that already is dissipating. In essence, it’s a one-time bonus, so wouldn’t it make sense to spend it on a one-time thing like the Road Home instead of the pie-in-the-sky budget with large increases in recurring spending being pushed through the Legislature? Remarks to the state Senate Finance Committee by Blanco’s Commissioner of Administration Jerry Luke LeBlanc show just out of touch with reality the Blanco Administration is on this point.
LeBlanc, when asked why not dip into the state surplus for the Road Home shortfall, said “We have 144 members of the Legislature to deal with on that issue ... You don’t know what consensus you can reach.” Perhaps he can be forgiven for having been out of the Legislature for three whole years after a service there of over a decade for forgetting this, but the governor does have something called a line item veto. I’ll walk LeBlanc through this to help him out: Blanco calls in legislative leaders, tells them they had better commit a few hundred million of the surplus to Road Home, or she’ll use her line item veto take out about that much spending (vetoes that will be sustained with GOP legislator help) and then they can all get together in a special session in the middle of election season to dedicate it to the Road Home. She’d have that money set aside faster than it takes her to change her mind.
That’s called leadership, something to which Blanco is unsuited totally. Instead, she and her ilk that comprise the legislative leadership are like bratty, ignorant children who have to be dragged kicking and screaming into place until they do the right thing. The federal government is going to have to be the parent again here, in this case laying down one edict: take the $718 million thus pledged, add the $400 million set aside for the German steel mill that predictably never came to the state, and then it’ll talk about coughing up the rest. So this requires one more dose of tough love for the state government that refuses to grow up and take responsibility for its own actions and fate, instead of blaming others and wanting them to do the real work.
3.6.07
Blanco, GOP play chicken again; will GOP blink this time?
Once again, in a different way than last December, a game of chicken has emerged between the Democrats that control Louisiana’s government and the minority Republican legislators. Last time Gov. Kathleen Blanco blinked. Will the same happen six months later?
In last year’s special session, even as they comprised only about 40 percent of the membership of the House, Louisiana Republicans managed to prevent huge new spending increases sponsored by Blanco and backed by her Democrat legislative leaders because the Louisiana people thoughtfully had amended the state Constitution to prevent growth of government spending faster than growth of the economy. To override this spending cap required a two-thirds vote, and with only a very few Republicans defecting, that spending was defeated.
Six months later, Blanco has used two dynamics to neuter this strategy as she again plans massive spending increases. First, her administration made estimates using methods questionable, if not outright violating, the Constitution to calculate a limit far in excess of the intentions behind that amendment. Second, she shifted monies into almost all of the almost two dozen dedicated funds parts of state spending practice, which do not count against the cap because they technically aren’t spent (but may be for the funds’ purposes starting Jul. 1) – a tactic not really available to her six months ago because the Jul. 1 start of the fiscal year was so far off.
This left the GOP with one recourse where as much as a two-thirds vote was needed – HB 3, the bill that permits the state to borrow money. They defeated it seven votes short of two-thirds, in essence holding over $5 billion in capital outlay requests hostage.
But that sounds more dramatic than it actually is. In reality, perhaps 5 percent of this authorized spending will occur within the next year because the state also has a borrowing limit. Still, it puts a project in a pipeline for money which, more often than not, means it eventually will get funded, even if it’s a decade later.
Drawing closer to state elections this fall than a year ago accentuating the electoral consequences of decisions, more defection among Republicans may occur before their leaders can broker a deal to reduce spending and increase tax cuts in exchange for letting HB 3 go through. The companion bill to it, HB 2, contains some projects that some of the “Republicans in Name Only” who were elected as Democrats who are running for reelection or for Senate seats, such as state Rep. Billy Montgomery, or liberal Republicans like the non-term-limited state Rep. Tom McVea.
Among the seven representative missing the vote, five were Democrats meaning if party loyalty held (not a single Democrat voted against it), there are 68 votes. Both Montgomery and McVea not only voted for HB 3, they also voted against an HB 1 amendment to cut back spending. If these two RINOs fall back into their liberal spending ways, Republicans lose. But if the GOP leadership can minimize the total defections to one, always having at least 36 opposed, they will win for a second time in six months – and again making the people of Louisiana winners against a reckless, out-of-control bloated state government.
In last year’s special session, even as they comprised only about 40 percent of the membership of the House, Louisiana Republicans managed to prevent huge new spending increases sponsored by Blanco and backed by her Democrat legislative leaders because the Louisiana people thoughtfully had amended the state Constitution to prevent growth of government spending faster than growth of the economy. To override this spending cap required a two-thirds vote, and with only a very few Republicans defecting, that spending was defeated.
Six months later, Blanco has used two dynamics to neuter this strategy as she again plans massive spending increases. First, her administration made estimates using methods questionable, if not outright violating, the Constitution to calculate a limit far in excess of the intentions behind that amendment. Second, she shifted monies into almost all of the almost two dozen dedicated funds parts of state spending practice, which do not count against the cap because they technically aren’t spent (but may be for the funds’ purposes starting Jul. 1) – a tactic not really available to her six months ago because the Jul. 1 start of the fiscal year was so far off.
This left the GOP with one recourse where as much as a two-thirds vote was needed – HB 3, the bill that permits the state to borrow money. They defeated it seven votes short of two-thirds, in essence holding over $5 billion in capital outlay requests hostage.
But that sounds more dramatic than it actually is. In reality, perhaps 5 percent of this authorized spending will occur within the next year because the state also has a borrowing limit. Still, it puts a project in a pipeline for money which, more often than not, means it eventually will get funded, even if it’s a decade later.
Drawing closer to state elections this fall than a year ago accentuating the electoral consequences of decisions, more defection among Republicans may occur before their leaders can broker a deal to reduce spending and increase tax cuts in exchange for letting HB 3 go through. The companion bill to it, HB 2, contains some projects that some of the “Republicans in Name Only” who were elected as Democrats who are running for reelection or for Senate seats, such as state Rep. Billy Montgomery, or liberal Republicans like the non-term-limited state Rep. Tom McVea.
Among the seven representative missing the vote, five were Democrats meaning if party loyalty held (not a single Democrat voted against it), there are 68 votes. Both Montgomery and McVea not only voted for HB 3, they also voted against an HB 1 amendment to cut back spending. If these two RINOs fall back into their liberal spending ways, Republicans lose. But if the GOP leadership can minimize the total defections to one, always having at least 36 opposed, they will win for a second time in six months – and again making the people of Louisiana winners against a reckless, out-of-control bloated state government.
Subscribe to:
Posts (Atom)