Alario budget strategy making him conservatives' friend

Oddly, if not ironically, conservatives may end up having Sen. Pres. John Alario to thank for keeping the focus on right-sized, sensible government in Louisiana as the state grapples with a looming budget deficit for fiscal year 2016.

In days gone by, the Democrat-turned-Republican often fronted efforts to expand government spending with commensurate tax increases as part of that. Whether for convenience sake and/or genuine ideological change, as Louisiana began electing legislators more compatible with their own worldviews and that worldview itself began to deemphasize populism, Alario became more conservative/reformist in his voting habits (in this term, his Louisiana Legislature Log voting score has crept up over 60, right about at the GOP Senate average).

And now he is throwing cold water onto House efforts, backed by some of its majority Republicans and party leadership, to raise taxes, most of these for at least a few years, as a budgetary solution by expressing a preference that the Senate will seek temporary means by which to balance the budget – implying suspensions of existing tax breaks would comprise the bulk of any revenue enhancements. As Alario’s greatest skill is herding lawmakers in a particular direction, chances are good it is this way at this time the Senate will head and thereby pressure the House to do the same.

Higher education policy going badly wrong this session

While budgetary constraints present in this cycle could have pressured Louisiana to embark on a long overdue and needed reshaping of its delivery of higher education, if anything in regards to this area policy-makers are engaging in counterproductive backpedaling.

The state’s inefficient system has three issues that prevents it from improving both its quality and efficiency, all interrelated. First, it is overbuilt, ranking 18^th in per capita spending on higher education as a consequence of too many institutions chasing too few students, particularly when it comes to baccalaureate-and-above schools. Second, its funding is imbalanced, where taxpayers subsidize disproportionately compared to other states its spending, while average tuition ranks (for study at senior institutions) only 40^th among the states even as in per capita income ranks Louisiana 29^th, meaning the ability to pay is there for families but its taxpayer spending on this is outsized. Third, it spends inefficiently within institutions, as evidenced by the fact that the baccalaureate-and-above institutions in the similar state of Oregon generate much more proportionally of their own resources with lower expenditures per capita, in part by having a much higher proportion of their students in junior institutions.

These realities mean the optimal reform course would seek to demote, merge, or close senior schools, to raise tuition levels, and to reshape incentives so as to prevent inefficient expenditures. Institutional realignment at the four-year-degree-and-above level can’t happen overnight, but at least the groundwork can begin this year. Tuition increases and shifting of incentives, however can commence to take effect in the next fiscal year that begins in less than two months. Yet with one exception, not only are legislators failing to do what’s best for higher education delivery specifically and the citizenry generally on that issue, but they actually are doing the opposite.

Caddo voters, commissioners continue wasting money

Seven-hundreths of a mill isn’t a lot, but it may have saved the taxpayers’ mother’s milk to the Biomedical Research Foundation of Northwest Louisiana from both voters and the Caddo Parish Commission. Which ensures nearly two more decades of waste of the people’s money.

Recently, voters in Caddo Parish took to the polls to decide whether to stamp approval on two property tax renewals. One was for 1.74 mills mostly for the BRF – actually slightly smaller than its reauthorization in 1997 and original amount in 1993 – to help fund its activities in attracting small technology-related startup firms, in providing venture capital, and in running its small medical operation that consists of overseeing facilities, medical grants, and a subsidiary with a Positron Emission Tomography scanner.

But less than two years ago, the BRF got into a whole bigger business – like a minnow swallowing a whale at a scale more than 50 times larger – when the state awarded it management responsibilities over two of its charity hospitals, in Shreveport and Monroe. The only operator of any state hospitals that had no prior experience doing so (technically through a subsidiary), it has come under criticism for what state officials and auditors have described as a troubled transition period, with monetary disputes spilling into the open and intimations that an original considered partner with the state, Willis-Knighton Health System, should step in before the initial contract was up.

Like herpes, worse comparable worth bill returns

It’s not that bad bills make it into law in Louisiana – it happens far too often. It’s that you would not expect that a committee would pass one along unanimously after many almost-identical versions have been rejected in the past – some this session.

SB 219 by Sen. Edwin Murray tackles the fiction that, all things considered equal, women do not receive equal pay compared to men. Reams of academic studies have demonstrated when accounting for all conditions, such as differences in occupation choices, hours worked, educational attainment, taken time off, reliability, and seniority between sexes, any difference in pay statistically goes to zero, or even favors women in certain cases. That makes perfect sense: there are few hardcore sexists out there in the business world who would not want to maximize profits by getting the best workers for their value, and that means ignoring sex as well as a host of other factors when these have nothing to do with the job at hand.

Proponents of this legislation, ultimately designed to extend government control over business with this goal obscured by presentation of a solution to a nonexistent problem, understand that and over the years have adopted a number of strategies to try to work around this fact. The tried-and-true tactic is to introduce the concept of “comparable worth” into such legislation, revealed upon seeing phrases such as “all employees shall be compensated equally for work that is the same or comparable in kind and quality” [emphasis added]. In other words, rather than let the market decide valuation of activities, some artificial construct makes that determination; for example, something is deemed wrong if nurses, a field primarily staffed by women, with bachelors’ degrees make less money than computer technicians, who primarily are men, with associates’ degrees, as a science degree like nursing should produce more “valuable” work. Et voilà, to explain the difference it must be sexual “discrimination” at work.

Unnecessary tax increases could haunt propagators

If Louisiana’s disease was a budget imbalance, it’s hard to see where the alleged cure of tax increases was not worse. Which may require another round of treatment that the authors of this previous round may find hazardous to their political health.

Last week, the state’s House of Representatives dug into the flesh of taxpayers of all kinds, with uncoordinated measures bordering on the irrational, in proposing tax hikes of $677 million – and left wishing they could have done more. A critical mass of the majority Republicans had to join almost all Democrats to pass these measures. At day’s end, chamber leaders declared they wished these proceeds to go entirely to fund higher education, essentially wiping out any reductions from this year’s baseline levels, perhaps as a ploy to pressure health care interests to lobby for additional increases to make up for a gap formed from a combination of not funding for next fiscal year previous improvements to charity hospital operations requested by their nongovernment managers, the opening of the new one of these in New Orleans, and to fund present and future pension payments for the previous state employees of the facilities prior to the state turning over management, of $200 million.

Few of the actions taken made any fiscal sense, these being passage of HB 218, which changes carrying periods for net operating losses by corporations that would reduce incentives to make decisions primarily for their tax implications; of HB 402, which increases taxation on income earned in other states, thereby encouraging making it in Louisiana; and of HB 549 (which actually is unlikely to contribute any additional revenues this year), which begins to reduce the horizontal drilling credit when oil reaches $70 a barrel, recognizing that at a certain point prices become high enough to need less in the way of incentive to perform expensive drilling. These aren’t perfect pieces of legislation in the larger scheme of balancing revenues and spending, but when considered in isolation at least they recognize that tax policy should steer behavior towards activities that increase economic output and therefore government tax take beyond the value of the break.

Liberal hypocrisy evident on LA tax increase roads bill

Reaction – essentially, none – by some to increasing both sales and gasoline taxes shows the level of partisan hypocrisy attached to policy specifically associated with Republican Gov. Bobby Jindal but more generally imbued within Louisiana’s political left.

Earlier this week, the House Ways and Means Committee advanced a pair of bills by state Rep. Karen St. Germain, HB 778 that would hike the state sales tax one cent for 10 years, and HB 777 that would raise permanently the gasoline tax from 20 to 30 cents a gallon. The former barely drew a peep and passed out without objection, while the other got more discussion – more about specific projects than anything else – and was forwarded on a 7-3 vote. Both would be dedicated to infrastructure.

The massive silence about the merits of the sales tax increase in particular stands in sharp relief to events of a couple of years ago, when Jindal proposed a tax swap plan that basically would have eliminated income taxes with raising the sales tax 2.25 percent, knocking out many exemptions, and expanding that taxation to many services. The plan was revenue neutral at the start but its simplification aspects and making sales taxation broader while zeroing out income taxation promised to encourage economic growth that in the future would have made it revenue positive.

Legislature better focus on budget, not on skirting rules

As the Louisiana Legislature embarks upon its version of spinning plates on top of poles, serious confusion stills reigns about just how procedurally this may be accomplished, to the detriment of success in this endeavor.

The metaphor refers to the House’s task in attempting to pass legislation beginning tomorrow allowing for budget construction next week. Part of the strategy relies upon scaling back tax breaks, and it is reported that “that it can trim tax breaks or temporarily end them with just a majority vote.” If that is being recounted accurately, there’s at least one serious problem with that strategy.

The Constitution flat out prohibits a permanent “repeal” of a tax exemption without a two-thirds majority vote of each chamber (and then would require gubernatorial assent, although a veto could be overridden by the same two-thirds majorities), but says nothing about a reduction of an exemption. Nor do a series of attorney general opinions, the latest relevant one 22 years old, address this specific question. For whatever reason, a numerically large faction of House members believe the concepts of “repeal” and “reduce” different enough that they can freelance the former having explicit addressing by the Constitution and the latter ignored by it, and by virtue of this not being mentioned in it specifically as an instance of requiring a supermajority to accomplish therefore defaults resolution of this issue to the typical simple majority rule.

LA retirement fund mergers, transparency necessary

If you thought that the idiocy that surrounded the horrific investment decisions made by Louisiana’s Municipal Police Employees Retirement System was bad, check out perhaps a worse case that argues more illustratively for system reform at all levels.

MPERS, which municipalities may participate in to have managed retirement investments to pay out in pensions for their law enforcement employees, gained infamy for its investments in questionable real estate and golf courses. A neglectful board trusted its administrator on these matters, who later was convicted of fraud, whose flights of fancy caused significant dollar losses to its portfolio, meaning higher costs to law enforcement agencies and, ultimately, to taxpayers.

But MPERS almost seems conservative on this account compared to the absurdities committed by the board and management of the New Orleans Fire Fighter and Pension Relief Fund. Among other “investments” made by this group, the agency that deals with the pensions of these public safety personnel in New Orleans, were buying golf courses and lending to a hotel, an office building, a garage, and to movie production companies. NOFF also went further in investing with an advisor who promised indefinite outsized returns now under investigation for what authorities equate to running a Ponzi scheme.

Far worse LA budget outlook if Medicaid reform absent

As long as quality is maintained in the provision of health care to the indigent, it’s not really important how taxpayers save money, it’s that they do.

At issue is a bill for legislative consideration, SB 109 by state Sen. Ronnie Johns, that would put into law efforts being made by Louisiana’s Department of Health and Hospitals to report information relative to the state’s Medicaid program. This bill, which is making its way smoothly through the process, specifically addresses making comparisons between the state’s prior use of a fee-for-service model that paid regardless of need or quality of service provided and its new model for the past three years, a managed capitation system called Bayou Health that has third party administrators making decisions about the suitability of a procedure and whether it would qualify for reimbursement.

DHH produces numbers that show quality of care, in terms of things such as patient access, is improving as a result. But last fall a Legislative Auditor’s report revealed that some of the data used were incomplete or were not independently audited, making such comparisons less certain. The difficulties came from the data for legacy Medicaid that could work for better comparisons just didn’t exist, and that insufficient resources were allocated for independent verification or even accurate reporting of some data-based conclusions, the latter of these DHH now has instituted protocols to address.

State senate tilt metaphoric to LA political change

A presumed legislative semi-rematch from 2011 serves as a microcosm of whether Louisiana Republicans fully consolidate their status as the majority party in the state, whether Democrats lapse into relevance only as a  regional force based on ethnicity, and whether the political culture truly has transformed.

Last week Republican Beth Mizell, narrowly-defeated in 2011 against Democrat state Sen. Ben Nevers, announced she would have another go at that seat. That loss of around 400 votes took many by surprise, and not just because Nevers in his first try in 2003 had won without having to contest a runoff (the Republican, who polled only half of Nevers’ total, withdrew) and followed that up winning reelection unopposed in 2007, but because Democrats are burrowed in like ticks on a neglected dog in the epicenter of the district, Washington Parish.

Because of that, Mizell will not be a slam dunk to succeed the term-limited veteran legislator, who also served a term in the House prior to his Senate election. Almost certain to try to hang onto the seat for Democrats is Nevers’ successor, now himself term-limited in the House, state Rep. Harold Ritchie. Together, the two have served as the recent backbone of the Washington Parish part of the party; Ritchie’s wife Patsy serves on its executive committee, and his brother serves on the Bogalusa City Council, while Nevers’ political ally and confederate in trying to build a reservoir in the parish while having barely arms-length business relationships with the effort Charles Mizell (if there’s some kind of distant relationship between him and Beth Mizell’s late husband’s family, I don’t know of any, even if both are from Bogalusa), served as Bogalusa mayor.