Lack of political will crippling best LA budget solutions

Smoke signals emanating from important decision-makers concerning Louisiana’s 2011-12 budget suggest competing views on its formation, and that some degree of synthesis will end on shaping the plan.

At a panel set up by the Louisiana Association of Business and Industry, member of the Senate Finance Committee state Sen. Jack Donahue argued that the state needed more aggressively to pursue cost-cutting recommendations made by a commission he headed, which would include constitutional and statutory changes to add flexibility to state spending choices. As it stood, a forecast deficit of $1.6 billion (more guidance to be provided on that later today) would have to be removed from a pool of $2.6 billion because of the hundreds of dedicated funds existing in the state. Almost by default, this strategy removes rationality and prioritization as a goal from budgeting decisions.

However, it seems little enthusiasm exists for Donahue’s call to increase ability to plan by importance of function, at least in time for the upcoming budget. Because constitutional amending would have to occur, necessitating a vote of the people, these could make their way to the people in time to affect this budget cycle only by dealing with them in a special session. While one is on the way to deal with redistricting, no hint has emerged this other issue will come up during that.

LA higher education must plan mergers, closures now

Perhaps advocates of more efficiency in Louisiana higher education should take the recent retreat of Southern University Baton Rouge from raising admissions standards as a slap in the face. Then again, the new statewide 2012 admissions standards alone threaten creating greater system inefficiencies that must be addressed.

SUBR had plans to raise the average American College Test score to 22 by 2012 and increase its minimum grade point average in high school coursework from 2.0/4.0 to 2.5. This would have been on top the elevated state requirements that essentially changed the current standards that, relative to SUBR, mean students will have to have at least a 2.0 (they don’t have to now), that this be on core courses, and creates a minimum ACT subscore of 18 on English and 19 on math (by 2014 with no minimum required now). Instead, SUBR has decided to indefinitely postpone implementation of this.

Little wonder, since even the incoming state standards promise to trigger an alarming drop in enrollment when they go into effect. While the voluminous reporting of Louisiana higher education includes many things, one thing not regularly reported is average ACT scores for schools. But percentage of students on the Taylor Opportunity Program for Students gives a decent proxy of how many students may be denied admittance by 2014, as one of its requirements is a minimum ACT of 20 and core GPA of 2.5. This information also is not made directly available by the Board of Regents but can be found in their TOPS reports.

LA officials unwisely disregard looming pension crisis

As much deserved attention has gone to the budgetary difficulties Louisiana faces in fiscal year 2011-12, undeservedly pushed out of focus has been the ticking time bomb known as Louisiana’s unfunded accrued liability (UAL) for its pensions to state workers. State politicians and retirement systems officials don’t want people to think it’s a problem, but pesky watchdogs keep trying to counter that illusion.

The latest comes from an article in National Affairs that looks at the postures of all states on this matter and finds most of them having at least some problems (it also includes an analysis of expected health care-related forecast expenditures as well). Louisiana is ranked as having the tenth worst situation in per capita terms at a total between pensions and health care of around $24 billion or $6,000 per capita.

This comes on the heels of a report issued last year, again reviewing the sorry state of pension funding among states and which identified Louisiana as the sixth worst in fiscal shape, in that, at current rates, it would run out of money by 2020 and then present a bill for $4.3 billion or 27 percent of projected state revenues the next year (using a forecast of 8 percent return for and 3 percent revenue growth into the systems).

TX shows way for desirable LA higher education changes

As debate continues in Louisiana over how to make higher education deliver more efficiently in order to reduce budgetary pressures, Texas forges ahead with ideas with which Louisiana needs to take a good, long look.

Two approaches nationally drive the call for reform in higher education resource allocation, the linking of university performance to student outcome and greater transparency. Louisiana has more aggressively entertained the former with the implementation of the GRAD Act, but has not really engaged in the latter.

Not like Texas, and in particular Texas A&M University. While Louisiana State University Baton Rouge might have the defeated the Aggies in the Cotton Bowl, A&M puts the Tiger administrators to shame with its willingness not just to put some financial figures in the public domain, but for giving them some context and to use them in management decisions. For example, while in Louisiana it’s possible for the public to get access to public college faculty members’ salaries, in Texas schools must post online, in an easily-accessible way the budget of each academic department, the curriculum vitae of each instructor, full descriptions and reading lists for each course and student evaluations of each faculty member – and A&M has taken the further step of computing cost-benefit analyses for each faculty member in order to reward high performers with bonuses.

A&M’s pioneering effort wasn’t without problems. Originally, it also published salaries and cost per student for individual faculty members but the effort was rife with errors and provided inadequate context – for example, while by the numbers somebody pulling six figures who taught few students may have seemed far less efficient than another who taught a thousand at a much lower salary, the latter may have little chance to teach as effectively if given very large classes. As a result, A&M eventually pulled the report from public view.

Still, it was a step in the right direction and certainly the idea to use the data privately to reward productivity is solid. As always, the devil is in the details in terms of the definition of “productivity.” Using the above example, the likely reason one faculty member makes much more than another is a record of voluminous research (usually defined as number of publications and papers presented, with some subjective analysis of their quality factored in). And while research production is good for teaching ability because it further informs an instructor, often there is little correlation between teaching ability and research production, if in fact this is not a negative relationship. Further, courses offered may reflect more arcane research interests than in necessary offerings in a discipline. Yet this archetype reaps the highest rewards in academia, the exact opposite of the primary purpose for its existence: where the best teachers (meaning those whose students learn the most and the most useful information in a fashion that sharpens their critical thinking skills) should be expected to teach more students and receive the highest salaries.

As such, to some degree Louisiana should emulate Texas and A&M. Thus, even though it’ll be all busy dealing with redistricting and budgeting this spring, the Legislature would be wise to pass legislation that:

· Requires putting online (within three links of the home page is the Texas standard) the budget of each academic department, the curriculum vitae of each instructor, the salary of each instructor, the number of students taught by each in the previous year, the average salary cost (including fringe benefits) per student for each, the average grade point average for each class taught by each in the previous year, full descriptions and reading lists for each course from the previous year, and student evaluations of each faculty member from the previous year (with an explanation of the methods/instruments involved)

· Mandates each department require an assessment of its graduates of its majors offered, outline how that assessment is conducted, produce the aggregate scores of the assessments, compute the number of graduates in each major, and publish these previous years data online as well

· Put online, for the previous year, overall university profiles of faculty salaries, by mean and mean per quartile, numbers of tenured, tenure-track, non-tenure-track, and adjunct faculty, list all administrative and staff positions with brief job descriptions and their salaries, the budget of each non-academic department, and ratio figures of administrative/staff costs to faculty costs, and ratio of the number of staff/administrators to full-time faculty equivalents

Not only would this produce information that can be used for innovative productivity enhancement plans as A&M is attempting and assist in budgeting and strategic planning, it also would increase transparency so students and their families can weigh the deployment of their (and maybe taxpayer) dollars in higher education decisions. As Louisiana’s public continues to become more skeptical about the utility of higher education spending in the state, these changes can restore its confidence in this area and lead to more efficient allocation of resources.

Informed consensus predicts demise of Third District

Maybe Gov. Bobby Jindal isn’t going to interject himself into the redistricting process, but myself and several other Louisiana political scientists – all of whom who have studied and/or participated in the process – were willing to when we were part of a panel devoted to the topic at the Southern Political Science Association meeting in New Orleans last Friday.

Speculation about the placement of the state’s Congressional districts, with their necessity of paring from seven to six due to population loss, we considered to some degree. We concluded the matter mostly open-and-shut that today’s Third District, running from Acadian parishes on the west in a swath curling all the way across to the most southerly and easterly parts of the state, was a goner, its spoils divided among several existing districts. Several reasons suggested this:

· It will produce five districts favorable to (with four absolutely safe for) Republicans and one to (and safe absent scandal for) a black Democrat, an important consideration where roughly three-quarters of each legislative chamber is composed of Republicans and black Democrats, with a governor from the GOP

· The population distribution by race in the state makes it about impossible to draw any more than one minority/majority district, but the requirement that at least one majority/minority district get drawn makes New Orleans the epicenter of that district, menaing to increase in size to get its additional population it only can move south or west – and west, as well as the Northshore, are constrained by the necessity of drawing a separate district grabbing at least part of Jefferson Parish, boxed in as this (currently the First District) is by geography (Mississippi to the north and east)

· The Third District’s representative of days-old tenure, Jeff Landry, has no seniority compared to all other majority/majority district holders nor any time in elective office – important because the more senior members have built up contacts among state legislators and have leverage over them even in this earmark-less era, none of which Landry has delivered

· Without Jindal applying little to no pressure, the two most important figures in the decision will be House and Governmental Affairs and Senate and Governmental Affairs Committee, respectively, Chairmen state Rep. Rick Gallot and state Sen. Bob Kostelka – both from north Louisiana and almost neighbors, so it is unlikely they would look favorably on any remapping that, as the continuance of anything like the Third would require, would put all of north Louisiana in one district, as it now is split between the Fourth and Fifth in essence creating double representation

· It also seems that any plan that keeps something like today’s Third around would create any of odd shapes, non-compact districts, and make strange bedfellows of different areas of the state, at least relative to a plan of carving up today’s Third – these nebulous judicial standards of contiguity, compactness, and community

· More future political careers also might be better served by the division of the Third; for example, the state Senate district of Neil Riser makes up a good chunk of today’s Fifth District and if he harbored progressive ambition he would find something that preserved something like the Third would split his voting base

We agreed that both politically, because there might be Republican control of both legislative chambers by the time the process runs its course, and from a legal/judicial standpoint, given the criteria set forth above plus as there seemed to be no concerns of lack of equiproportionality (districts with fairly equivalent populations) to draw such a plan, that the dismembering of the Third would occur. That doesn’t mean alternatives won’t be offered and debate won’t occur over them, but the dynamics clearly favor this plan.

As for Jindal, we suspect he hasn’t completely detached himself from the process. If he does have a preference, as long as the Legislature seems headed in that direction, he’ll stay out of the process. But if he does and for whatever reason the Legislature doesn’t appear to head in that direction, we may not have heard the last from him on this subject.

Glover campaign finance travails show need for reform

The gamey smell one might have detected around Shreveport mayoral politics came from the campaign finance reports of Mayor Cedric Glover, as revealed in a Shreveport Times article. It just provides more evidence about why the system needs drastic reform, as in getting rid of most of it.

The Times piece highlighted a number of questionable entries in Glover’s reports – missing information, changed names, limits being exceeded, large donations coming from individuals that don’t seem to be in much position to make them or would seem to have any interest in the contest. Glover maintains that his campaign tries not to accept illegal donations but if they look legitimate he’s not going to question them, and he said it tries to be as accurate as possible in record-keeping.

While some of these appear very questionable, Glover does have a point. Unless there seems something very obviously wrong, campaigns are under no obligation to refuse a donation and have little incentive to do anything but this legal minimum in ascertaining the legitimacy of a donation. Further, checking in detail all reports not only is not a required function of the state’s Ethics Administration Program, but also it would have just a tiny fraction of the resources to do this in any effective way. Instead, historically all campaign finance regulations everywhere have relied upon a political solution; that watchdog interests like the media and political adversaries such as opponent’s campaigns or political parties police disclosure forms.

LA bribery strategy suffers another predictable failure

It’s probably too much to hope for, but perhaps the failure of Louisiana’s long-standing “bribe them and they will come” theory of economic development will merit some re-examination after the flop of one of its most high-profile attempts.

It turns out that the corporation that landed millions of dollars in state incentives to run a call center in a state-owned building now has all of 10 employees using it. At this time last year, Accent Marketing announced it would lay off almost all its employees at its Monroe headquarters, at the high-profile former State Farm building. State Farm, when it left the area, donated the building in 2004 to a quasi-public entity known as the Ouachita Economic Development Corporation.

This group, funded by local governments and business, in turn donated it to a private entity run by people connected to it until in 2007 it sold it to the state for $3.25 million. During that time, the entity collected almost a million dollars more from the state for various activities.

Already in over $4 million, former Gov. Kathleen Blanco had the decent idea of razing it and building a new Delta Community College campus into it. But then the huckster Michael Olivier, then her secretary of Economic Development, sang the siren song that those of his ilk use to justify their enormous salaries on taxpayers’ backs, to use it as an incentive with generous state subsidies to lure a private concern there. Half a year later, Accent Marketing showed up and for part of its now 42-month presence employed more than its promised 400 jobs to qualify for as much as $3.2 million in state subsidies on rent. Henceforth it must pay market rates for rent and claims it will stay; for that loss of money, we’ll see how long that lasts and soon the state will have an empty hulk on its hands again.

LA needs to join effort to end birthright citizenship

Last year controversy erupted over Arizona’s refashioning of immigration laws that provided for more state assistance in enforcement. That matter is pending in the courts, even as Louisiana has a similar law that goes farther than Arizona’s in most respects and is much like existing federal law.

As this gets hashed out in courts that may last well into the 2012 election cycle, another issue is gaining prominence: proposing the end of birthright citizenship, or the interpretation that anybody born on U.S. soil not under the actual jurisdiction of another country is a U.S. citizen. Opponents of ending this interpretation argue this is divisive and makes children of illegal immigrants suffer consequences of their parents’ actions, while proponents of the change point out the current situation rewards lawbreaking, encourages illegal immigration, and violates the spirit of current immigration laws (through the creation of “anchor babies,” by birth American citizen children who then years later may use that to bring into the country an unlimited number of relatives who otherwise never would qualify for residency).

States cannot constitutionally write their own policies on defining citizenship. However, they can lobby the Members of Congress either to make legal changes and/or press for a constitutional amendment to do so. Louisiana should join the fray as changing the current interpretation would produce more policy options in how to deal with the problems of illegal immigration. For example, European states do not follow this policy but instead offer paths to citizenship for the children (and their parents) which could be part of a broader overhaul of current U.S. policy. That option remains unavailable under the current interpretation.

Exemption reform must not index but broaden base

With the single most vociferous advocate of raising Louisiana’s homestead exemption on property taxes retired and his legislator counterpart deferring future activism on the issue, the issue itself deserves another vetting.

Louisiana has the most generous exemption in the nation, on a primary residence of what turns out as the first $75,000 in value on property taxes except for municipalities except in Orleans Parish. Other exceptions exist such as disability and veteran status and may apply to any jurisdiction (such as established by Amendment 3 from the last election). Proponents of the high rate, including those who wish it to go higher, argue it helps those on fixed and/or limited incomes afford home ownership. Opponents of any higher rate, including those who would want it reduced, assert that this shifts the major part of the tax burden onto those owning more expensive homes, business and renters, city residents, and shortchanges jurisdictions other than municipalities (except in Orleans Parish).

This extant rate last changed in 1982, providing fuel to those who wish to raise it. This prompted the likes of former Jefferson Parish assessor Lawrence Chehardy and current state Sen. John Alario to consistently agitate for its increase in the past couple of decades. But its high level means, even with consumer inflation worked in from it latest compuation in Nov., 2010, that today’s equivalent has sunk only to $32,324, well above many states such as neighboring Texas with its $10,000 exemption.

Given that the most efficient form of taxation in terms of revenue collection comes in the form of the lowest aggregate rate spread over the largest pool of payers, state Rep. Kevin Pearson has suggested through legislation in the past two sessions the excellent idea that owners pay on the first $10,000 (meaning practically every homeowner) and then the exemption applies in the $10,000.01 to $85,000 range. Under this arrangement, even the most strapped owners would pay a pittance; as an example in a jurisdiction where the combined millage equals 100 this would be a bill of $100 for the year.

Advantageously, it would achieve the optimal by spreading the burden and increasing revenues by bringing more payers into the system. After implementation, it might also create slower increases in tax rates as a broader range of voters would be affected by these, thereby making them less likely to vote for them, and it would make governing authorities less likely to allow millage levels to remain the same as property values increase, as more constituents would be affected and might disapprove. As Pearson’s past efforts have been rebuffed, hopefully he’ll try again this session.

Another reform attempt, indexation, should not be implemented. Not only would it lock in the artificially high level in Louisiana, it would not address the ability of authorities to roll forward millages as noted above. That is, they may become more likely to vote to allow the millage to go higher, above the level where, applied to reassessed values, the same total collections would remain the same for those properties not transferred in ownership, as a way to beat indexing.

Finally, while the best theoretical idea would be to have no exemptions written into the law or Constitution and instead to allow assessors to make case-by-case exemptions on the basis of numerous factors like income, disability, age, veteran status, etc., that assessors are elected officials threatens too much to bring political considerations into play. Thus, Pearson’s idea without indexing has the best chance for enactment that is fair and improves efficiency.

As for the level of the exemption, its relatively high level warrants no increase for some time, perhaps decades. With ardor for its argumentation cooled, perhaps more attention will shift to Pearson’s better solution.

An eternal lesson: keep close watch on all govts

As 2011 approaches and observing that Bossier Parish seems to have no difficulty, even in trying economic times, in finding money to service road construction, as well as reviewing the past year and digesting the renewed enthusiasm that the people have acquired courtesy of over-reaching national government to monitor the activities of government, it makes me think back some years ago about an object lesson concerning how government operates. The specific example is Bossier Parish's, and the apparent whimsy of situation might amuse save for the unsettling consequences implied had things turned out differently.

Perhaps somebody remembers in the days leading up to the 2006 fall elections that a sign touting an affirmative vote for Bossier Parish raising property taxes essentially threefold, at what was then the southern end of the Arthur Ray Teague Parkway, was moved a short distance away only a few days before that election. Blame me for the consternation.

I first noticed the sign on Sep. 21 and became simultaneously curious and concerned. It didn’t state who sponsored it, and it was in a spot I thought might be part of the public right-of-way, and certainly was on public property (Bossier City’s). Obviously, it was an attempt to encourage passage of the measure which should bring pause to anyone who believes in fairness by government: Bossier City was permitting a pro-vote sign, supporting a Bossier Parish measure which would enrich the parish coffers by $2 million a year, to be placed on its property, regardless of whether its citizens supported such a measure.