The Advocate column, Apr. 17. 2016

Equal pay law a big sham; can Louisiana House halt this "nonsense?"
http://www.theadvocate.com/baton_rouge/opinion/article_59472289-2d68-50ef-94ae-c90ee8a514f6.html
Links:
http://theadvocate.com/news/15466980-175/louisiana-senate-oks-equal-pay-bill

http://www.legis.la.gov/legis/ViewDocument.aspx?d=993803

http://www.aei.org/publication/some-thoughts-on-equal-pay-day-and-the-23-gender-pay-gap-myth/

http://jeffsadow.blogspot.com/2015/05/like-herpes-worse-comparable-worth-bill.html

Expand TOPS to voucher to stay an entitlement

Last week, Louisiana’s Commissioner of Higher Education Joseph Rallo echoed a remark investigated on several occasions in this space and which provides an alternative formulation in how to deal with the state’s schizophrenic Taylor Opportunity Program for Students currently under budgetary fire.

TOPS, with its extraordinarily mediocre standards, does not operate as a true scholarship program because of that but instead mimics an entitlement. For that reason, it features a high default rate and uses taxpayer dollars inefficiently. Modest enrollment increases over the years since its institutionalization almost two decades ago and substantial tuition increases that brought up Louisiana from close to the bottom of senior institution average tuition among the states about a dozen places, although still lagging the national average by over $1,500 annually, have swelled TOPS’ cost, making it a target to cut in times of budgetary stress.

Democrat Gov. John Bel Edwards has proposed that – not as a sincere means to cut the cost of government but as a cudgel to scare lawmakers into a tax hike. As currently defined in statute, that reduction would have the effect of raising dramatically TOPS’ standards and, as touted in this space, would have the beneficial impact of making it a genuine scholarship program, eliminating most of its inefficiency in resource use.

Revised budget offers transformational opportunity

Because it goes against the grain of Louisiana’s political culture, more than ever legislative Republicans should take the budget deal Democrat Gov. John Bel Edwards has offered.

In his fiscal year 2017 budget version 2.0, Edwards performed some considerable slashing to erase a projected nearly $800 million shortfall from current spending levels. In doing so, it picked up a particular Janus-like quality: both a serious document and a political one, designed to accomplish Edwards’ long-term goal of growing government through tax increases, in that it concentrates cutting in areas that challenge the prevailing populism still a part of the state’s ethos.

A little over half of reductions came in health care, centered on the possibility of “closing” four of the nine charity hospitals still in the state’s portfolio. More precisely, that would mean the state dissolves contracts with operators that pay them above Medicaid rates for care delivered to individuals with family incomes of less than 200 percent of the federal poverty level.

LA needs to elicit client responsibility in Medicaid

Louisiana need not abandon the idea of asking Medicaid patients for some reimbursement to arrest wildly increasing costs, but must design the program with an understanding of the inculcated culture of poverty in order to make it effective.

The insurance industry for decades has designed coverage where a user of health care makes small payments at the time of service, but only recently has that crossed over from private to government insuring. The goal remains the same regardless of sector: create a disincentive for the consumer to access health care frivolously while lowering the insurer’s exposure slightly. With that in mind, legislators filed a number of bills for the regular session of the Louisiana Legislature, requirements in Medicaid co-payments both to put a dent the huge cost increases coming from program expansion and to inspire increased personal responsibility from clients.

However, in the case of public-backed insurance, unlike with private insurance where overuse turns back the inefficiency onto the ratepayer utilizing the service with an increase in premiums, the exposure falls on the taxpayer, not the user who pays little or no taxes. Thus, policy-makers eye the co-payment requirement not just as a method to connect the client’s demand to the cost of the service in the hopes of limiting consumption for trivial reasons or in inefficient ways, but also as a way to raise some funds to ameliorate the impact of the transfer of wealth forced to fund the program.

Privatization presents large LA prison savings

Louisiana’s Department of Corrections might want to rethink its budgetary poormouthing strategy, especially when there exist realistic solutions to cuts costs that take only the political will to implement.

Last week, Secretary of Corrections Jimmy LeBlanc – the only holdover selected by Gov. John Bel Edwards to continue in the same cabinet job from former Gov. Bobby Jindal – testified to a House of Representatives panel that a projected cut of 10 percent in his department’s budget would lead to any or all of closing prisons, releasing prisoners early, or cutting across the board. He described the aftermath of this as potentially deleterious to both public safety and prisoners, calling it “dangerous.”

While policy-makers always should go alert in judging validity of information when hearing such drastic claims – LeBlanc threw out numbers such as releasing over 5,000 of the state’s over 37,000 incarcerated about equally distributed between state and local facilities and closing five of the state’s nine prisons to make up the roughly $65 million – even milder protestations would draw some deserved skepticism given the recent controversy over some suspicious personnel practices in DOC. Former Louisiana State Penitentiary head Burl Cain, a former business partner of LeBlanc’s, and one of his relatives engaged in wasteful, if not fraudulent, practices apparently legal only because of the exceptional laxness of internal DOC policies. Additionally, Cain will receive extensive retirement benefits that in a minor way would have alleviated the contemplated budget cut.

The Advocate column, Apr. 10, 2016

Wage hike would hurt the poorest of all
http://www.theadvocate.com/baton_rouge/opinion/our_views/article_d834e267-d826-5b6a-a967-944b07ecc2dc.html?

Links:
http://www.nola.com/politics/index.ssf/2016/03/minimum_wage_john_bel_edwards.html
http://www.nola.com/politics/index.ssf/2016/03/john_bel_edwards_makes_persona.html
http://theadvocate.com/news/15343041-123/louisiana-gov-john-bel-edwards-set-to-testify-in-favor-of-increased-minimum-wage
http://www.pbs.org/newshour/making-sense/undisputed-facts-minimum-wage/
http://www.manhattan-institute.org/pdf/ib_36.pdf
http://www.heritage.org/research/reports/2013/02/who-earns-the-minimum-wage-suburban-teenagers-not-single-parents
https://www.mackinac.org/19518

Nungesser idea viable way to reform LA film credits

Is Lt. Gov. Billy Nungesser on to a good idea concerning the Motion Picture Investor Tax Credit that can both keep the film industry shooting prodigiously in Louisiana and as a result not have the state lose money hand over fist?

Nungesser, whose portfolio includes culture and tourism although the state’s Department of Economic Development oversees the credit, proposed to a reporter a profit-sharing arrangement for Louisiana not unlike that enjoyed by participants in movie productions. Typically, parties involved negotiate for a share of the net profits of a production. Nungesser suggests for blockbusters that the state get a cut of that action, liking it to oil wells where one strike can pay for lots of dry holes.

That could offset the huge taxpayer losses suffered on the program, which returns less than a quarter of every dollar spent to the state. At the same time, it could present a way to reverse the recent pullback of productions in Louisiana, as a consequence of reforms to the credit that eliminated its virtual open-ended status.

Time for Port of Caddo-Bossier to stand on its own

Various propositions merit Caddo and Bossier Parish voters’ attention on Apr. 9, with most deserving approval. But in one case, the time has come to cut the apron strings.

In Caddo Parish, voters must judge three property tax renewals of the Caddo parish School District. They service ongoing concerns and do not constitute new construction or hiring. A surcharge for Fire District #4 and in Bossier Parish a property tax for Benton Fire District #4 also appear.

Voters in both will consider the renewal of the 2.5 mill tax paid by property owners in the parishes. First imposed in 1994, it actually does not terminate through 2018, so the renewal would come nearly two years prior to the tax’s extinguishment.

Electoral politics intrude on PSC decision-making

A recent important decision by Louisiana’s Public Service Commission gave one of its number running for a higher office the chance to take the ordinary and grandstand to leverage it in a way to assist in his chances for this election.

CLECO, the state’s third-largest power utility, received permission from the PSC to be acquired by a consortium of mainly foreign pension investors. The consortium will pay a 15 percent premium to the equity’s price on Oct. 17, 2014, the day of the initial announcement of the deal. The original offer also promised minimal changes to management and none to staffing levels or to employees’ compensation, an increased Louisiana representation including customers on its board, no rate hikes, and a contribution to economic development funding. Shareholders overwhelmingly approved the deal over a year ago.

But wary of the PSC – it had forced rate reductions on the company prior to the deal that resulted in reduced earnings afterwards – the investors also came up with additional concessions, including a credit of $125 million credit over 15 years to customers. CLECO’s rates exceed typical statewide rates by around 20 percent, because of its smaller and relatively rural base that drives up costs.

Real world market proves tough on LA filmmakers

Let’s pull out the handkerchiefs and tune up the violins for the film and television industry in Louisiana as it learns that life in the real world sux.

A fat and happy industry through 2014 had separated a net over $1 billion from taxpayers’ earnings since the Motion Picture Investor Tax Credit had come into law in 2002, with a net negative return on investment for the state of anywhere from 435 to 769 percent in that time period. Oddly, policy-makers did not consider this a problem (and some, like current Commissioner of Administration Jay Dardenne saw it as beneficial) until dire (and subsequently correct) warnings of severe budgetary strains prompted them to place, among other things, a moratorium on buybacks for this fiscal year and cap redemptions at $180 million annually for the fiscal years 2016-18. The state otherwise buys back the credits for 85 percent of value (they also trade among interested parties) and previously had no limits on the amount the state would pay out on a yearly basis.

With an estimate of several hundred million bucks worth of credits out there, analysts thought the moratorium would prevent a rush on buybacks that act as a subset of redemptions, squeezing out any new projects. During the year, some of the surplus could deflate, leaving some room to resume buybacks starting in FY 2017.