Tantrums don't change facts of need for closing, reform

Feel better now, after the three-hour tantrum about the closing of the Southeast State Hospital? Feel better now, after the six-month tantrum about education reform? I hope so, because neither changes the fact of the rectitude both of the closure and reform.

If modern liberalism were in charge in most respects of public policy-making in Louisiana, these actions of a meeting to protest the closure and of a recall petition directed at Gov. Bobby Jindal would resonate perfectly with that ideology’s dependence upon emotion and assertion of feelings to formulate policy, with inconvenient facts shoved aside in a blizzard of illogic. But it isn’t, and the facts remain.

Louisiana as a state, both in terms of public and private mental health beds per capita, is in the top quarter of states, and plenty of beds exist in the Regions 1 and 9 that had been served by the hospital. Some family members will have to travel longer distances to visit patients, but it’s not the state’s job to give them curb service, only to do the best it can (often for free) to treat the afflicted. Many families and patients also have the option of private and non-profit providers in the area.

Closings teach privatization loaf better than none at all

Facing fiscal pressure and changing demographics, the Gov. Bobby Jindal Administration went for Plan B concerning correctional institutions, probably leading a number of state and local policy-makers bemoaning that they got what they wished for.

This past legislation session, and in the previous one, Jindal had budgeted to privatize some state prisons beyond the two already permitted in state law, as well as this past session planned to close two others. As occurred the year before, no further privatization occurred, but the closures happened despite an attempt to make an end run around Jindal’s authority on the matter.

Apparently, the numbers indicated that this was not enough, so last week the Administration announced the closure in two months of the C. Paul Phelps facility in southwestern Louisiana that would save an estimated $12 million a year. Demographic and local capacity trends such as they are, that space has turned surplus. Naturally, the decision left some state legislators and city officials whining about how a few local residents will lose jobs and a few businesses will lose subsidized inmate labor.

Hypocrite moans when others may get taxpayer largesse

It seems for some being at the public trough is not enough. They also have to act as hypocrites when it appears others may be trying to push their snouts into the mix.

Complaints arose from one Louisiana film studio boss when he discovered that the National Aeronautics and Space Administration was renting out part of its Michoud Assembly Center for use as a film studio. Patrick Mulhearn of Raleigh Studios claims that the federal government, which is required to recover costs when possible on facilities, set rental rates for another studio to use its unused space at below-market rates, which would violate federal rules. NASA says it does not and no demand in the aerospace area means the space would not get used for the general purpose of the facility.

Raleigh uses space at Baton Rouge’s Celtic Media Centre, leading Mulhearn to whine, “All I've been given is hearsay from producers who tell me that our rates are more expensive than theirs. The taxpayers didn't fund [Michoud] to make movies. … I know that [Celtic’s owners] never would have built this facility if they knew they were going to have to compete with NASA.”

LA Third District tilt hinges on differing GOP strategies

As usual in these kinds of cases, the reason for the intensity of Louisiana’s Third House District contest between U.S. Reps. Charles Boustany and Jeff Landry is because they are so similar on the issues – which produces an opportunity actually to dissect and discuss the issues.

Trying for his fifth term, Boustany, from an old-line political family in Lafayette, got matched with freshman Landry, with a much newer political pedigree, because of redistricting brought about by Louisiana’s failure to grow much in population in the last decade. Both being Republicans in an area that has evolved into a solidly conservative national electoral district, one will win.

Certainly they differ in style. Boustany takes a measured approach that focuses more on the deal-making aspect, while Landry forcefully articulates issue preferences that highlight policy and where preferences differ among representatives. To oversimplify, they pose the “insider” vs. the “maverick,” and provide contrast on the eternal political question of democratic rule of whether meaningful policy gains can come given the costs of compromise in their achievement.

LSU System consolidation, excising best scenario

Comments by Gov. Bobby Jindal appear to map out the direction a major part of higher education governance, and related to that organization of the state’s charity hospital system, will take beginning soon.

Jindal voiced support for combining the top job at both the Louisiana State University system and at its largest entity Louisiana State University Baton Rouge. The system oversees four campuses that award degrees all the way from associates to doctoral in many fields, other campuses dedicated only to graduate degrees in professional areas, specialized research-only institutions, and two systems of charity hospitals. Presently, the same individual on an interim basis holds both this system presidency and the chancellorship at LSUBR.

Earlier this year, outside advocacy groups and some members of the entity that governs the system, the Board of Supervisors, indicated a desire to implement a “one LSU” concept, which essentially would bring the disparate parts of the system under the authority of LSUBR. Instead of them operating as separate institutions, in essence they would become parts of LSUBR. The professional schools would become separate colleges, the research institutions managed by LSUBR, the other teaching campuses satellites of the Baton Rouge campus, and the hospitals now also run by it.

Pension system tries to distract from needed reforms

As policy ideas about Baton Rouge continue to circulate that would reduce the amount of money coming into Louisiana’s two dominant retirement funds by assets, each tries to crow about its performance when anything beyond surface analysis reveals their warts. First it was the Louisiana State Employees Retirement System which tried to mask its subpar performance over the past decade and more; now it’s the Teachers Retirement System of Louisiana.

TRSL sent out a news release with the latest results from a research firm comparing its performance to other state pension funds, and to a smaller subgroup of those with similar asset amounts. Over the five-year period ending in 2011, TRSL returned 10.7 percent and 2.6 percent in private equity and real assets, respectively. The U.S. average was 7.4 percent for private equity and 1.8 percent for real assets. The release did not give such statistics for the peer group; unfortunately, the report is not publicly available, so TRSL’s place among its peers cannot be determined, but it seems that positive news in that category would have been reported in the release.

But, as with an analysis of LASERS, this kind of relative comparison means little without looking at absolute performance metrics. One of these is to compare the return on investments of the fund. At the end of fiscal year 2011, it held about 60 percent in equities, about 15 percent in bonds, and the remainder in “alternative investments,” which appear to be real estate and commodities among other things. Reviewing return for the past five years reported (that is, performance for FY 2007 through 2011), which includes more than just the categories cited in the release, the average annual return for it was 3.074 percent, compared to the Standard and Poor’s 500 Index (which is based on equities) return of a 4.143 percent. In other words, the fund would have done better by plowing everything into an index fund representing the S&P 500.

Charity hospital transformation plan needs implementation

With news that most of Louisiana’s charity hospitals may get downsized confirms the move to dismantle the system as it is has come to the stage of a realistic alternative future, also bringing big change to some other related areas of policy, and not a second too soon to benefit the state.

Spurred by the sudden loss of a good chunk of its Medicaid reimbursement from the federal government – the vast majority of these public hospitals’ business is paid for that way, making Louisiana public institutions a wildly disproportionate user of those funds – at first former system leaders developed a strategy to cope by using mainly reserve funds, necessary because they remained invested in the notion that public hospitals providing free care to the indigent must exist.  In retrospect, this appears now accepted then only because of the compressed time frame, but that the basing of the response on the concept of necessity of public hospitals was not considered viable over the long haul.

As such, the officials in charge of the entire ten-hospital system and of the Health Care Services Division that oversees seven of them, while the remaining three in Shreveport, Monroe, and Pineville are organized separately under the auspices of the Louisiana State University Health Sciences Center Shreveport, were removed and the new officials came up with a different strategic paln for the system that largely gets it out of the direct provision of hospitalization services. In its most radical version, the plan calls for all but the New Orleans one to be downsized in bed capacity to 10, with the New Orleans one set at 150.

Despite high state support, structure hurts LA universities

Today is a big day in Louisiana higher education, a sector sliced many times in recent years by planned and surprise budget cuts, with for most institutions the reporting of enrollment figures (a couple of days late because of Hurricane Isaac closures) that will determine its revenue picture for the remainder of the year. Yet any good news (that is, enrollment increases, meaning more revenue) for institutions only will delay the day of reckoning coming to Louisiana higher education as a whole unless major policy changes occur.

Although the report from the State Higher Education Officers Organization came out six months ago, recent interviews concerning data from its State Higher Education Funding 2011 edition demonstrate that education policy to date has not significantly changed the headwinds Louisiana higher education faces. Some of the larger trends affecting it the Louisiana State University Board of Supervisors has heard recently. But the specific ills as they apply to this state’s higher education system remain unaddressed and therefore unresolved.

Much moaning and groaning has circulated concerning funding of Louisiana higher education, as the state in total has retracted over a half a billion dollars, or about a fifth of its total state subsidization, since 2008. Tuition increases have made up a good portion of the difference, leading to another lind of carping about students (and taxpayers, through the Taylor Opportunity Program for Students) paying more, but institutions and governance boards still complain that not only are further significant cuts positioned to bring apocalyptic results to their sector, but that increases in state subsidization only may improve quality delivery.

Downplay disguises union influence in LA politics

Long predating the bogus “fact check” mania spawned in recent times by the mainstream media, for a number of years the Baton Rouge Advocate has run a version of it called “Ask the Advocate,” providing some kinds of answers to questions presumably generated from stories in the newspaper. However, the answers don’t always accurately capture the meaning and context of the issue in reference, which can mislead when the discussion is politics.

A case in point regards its explanation of teacher union presence in Louisiana. The relevant part of the article reads: “Q. There has been a lot of talk lately about teacher unions. How many parishes in Louisiana actually recognize collective bargaining for teachers? A. Seven of Louisiana’s 70 school districts have collective bargaining rights with one of Louisiana’s two teacher unions.” It then lists the districts and whether it is the Louisiana Federation of Teachers or the Louisiana Association of Educators that represents in each.

Of slight annoyance, the snippet implies that only 7/70 = 10 percent of teachers enter into collective bargaining. In fact, the proportion is a bit higher, the latest figure available being 11.6 percent. More perturbing, the way the question is phrased, focusing solely on collective bargaining, restricts the inquiry into the implied part of the question – there is “a lot of talk about teacher unions” because they are inserting themselves forcefully into the political process, which goes far beyond just collective bargaining. (It also negates the fact that there actually are three statewide unions, the other being the Associated Professional Educators of Louisiana, which has no collective bargaining units established and declines to identify itself only as a union saying it is a broader professional organization).

Tax break panel's attitude putting it on course to fail

If Louisiana legislators remain invested in the same ideology that has spawned the hundreds of tax exceptions, not a single constructive thing will emerge from the effort.

Last week, the Revenue Study Commission reviewed a number of these in an effort to parse out whether policy as it exists in this regard optimally forgoes revenues because of these exceptions. Part of the exercise allowed arguments, particularly from current beneficiaries, stating cases as to why their breaks, some of which on the surface seem very questionable, should continue.

And so we got from them arguments like Lt. Gov. Jay Dardenne’s, who oversees arts policy as part of his portfolio, defending the sales tax exemption on art sales in the state’s designated 63 arts districts, who claimed it was a economic redevelopment tool that cost only $500,000 over the past two years but the districts themselves had economic activity of over $1 billion. Bullion dealers say introduction of a sales tax exemption on sales above $1,000 caused their business to increase many times. A representative with the New Orelans Jazz and Heritage festival said a new exemption applies to sales tax on admission and vendor sales helps “maintain a ticket price that is reasonable.”