Spendthriftiness costs LA on jobless fund

Not only must Louisiana solve for its now-growing unemployment benefit trust fund deficit, it must do it in the right way to prevent fiscal affront to taxpayers.

This week, Louisiana started borrowing for that from the federal government. A temporary federal law allows that to continue interest-free past Sep. 30 through the end of the year. In effect, that means the no-cost borrowing can continue through Sep. 30, 2021 as long as no borrowing then occurs until the end of 2021; if not, all of 2021 debt gets levied. On Jan. 1, 2021, it must pay interest at the long-term Treasury bond rate for any 2020 balance, an amount due which may be adjusted daily, up to November 2022, when additionally a penalty increasing the federal employer rate kicks in, which can keep increasing the longer more debt remains. Moreover, charged interest payments can’t come from the fund itself, but from an external source only; in Louisiana, a “solvency tax” triggers to pay off interest whenever the fund is forecast to fall below $100 million, applied from six to nine months later for at least three months.

As of now, the state forecasts – unofficially – a deficit of $236 million by year’s end. In other words, taxpayers will take a hit unless the debt is zero by year’s end, which seems unlikely.

Shoe on other foot for blindsided BC Council

Maybe Bossier City councilors will have a better idea what they put city residents through after their rare rejection of an agenda item.

For the uninitiated, the plenary body of America’s Biggest Small Town has a long history of dispensing with its business in rapid-fire fashion, acting as if its members’ park their cars at meters which only accept up to an hour’s worth of coinage. Except for the occasional blindsided vendor or tearful appellant to an animal control order voicing complaints at times when the public is allowed to speak, or on some matters that feature almost always brief prefatory information conveyed by a member of the Republican mayor Lo Walker administration, little slows the bullet train of business serenaded by the background drone of “moved, seconded, vote, motion passes.”

Thusly, this week the Council took just a couple of minutes to all-but dispose of the city’s $60 million 2021 budget, in all its forms, in unanimous fashion. This exercise featured no debate or public comment, and councilors even found the effort to avoid a rubber-stamp quality to it all too much, as after approving the general fund budget they slammed the other 18 items together into one for consideration. They spent half that time joking about a loud computer update notification.

More hits than misses with LA amendments

Fall in Louisiana brings the heart of the football season, start of the deer season, and constitutional amendments. Lawmakers saddled voters with seven of these over three different sessions, and threw in a bonus local option vote. Let’s see what to do with these.

Amendment #1 – rejects constitutional right to an abortion. Unmentioned in the Constitution presently, this would disallow any judicial decisions by state courts from ever interpreting the Constitution in favor of its allowance in some form, although federal constitutional jurisprudence would have to change for this to come into effect. It’s a great safety valve to have to protect innocent lives. YES

Amendment #2 – taxes oil and gas wells on production value. The Constitution doesn’t allow for this, thereby forcing assessors to use less accurate methods and complicates accounting for well royalty owners. This makes life easier for all, promotes a more efficient marketplace, and clarifies the impact of policy decisions regarding taxation of these wells. YES

GOP legislators defy Edwards, their leaders

After the Louisiana Legislature roughed up Democrat Gov. John Bel Edwards earlier this year, it’s not news that the Republican-led chambers would continue to operate outside of the norm of gubernatorial dominance. In this second special session of the year, the precedent-breaking news is how the GOP majority has defied its own leaders.

For the second time this year, the body called itself into an additional session, and not for the reasons Republican House Speaker Clay Schexnayder and GOP Senate Pres. Page Cortez likely wanted. Earlier this year, many legislators thought the operating budget would run a deficit after the lengthy and relatively severe restrictions Edwards, who has the sole power to do this except for a one-house legislative all-or-nothing veto, had placed on the economy to battle the Wuhan coronavirus pandemic. His actions caused the worst economic performance of all the states during this period. Further, both Edwards and the legislature had cooperated in enlarging Louisiana’s fiscal year 2021 budget past its standstill level despite an expected fall in state revenues.

But that downdraft hasn’t been so severe as to cause that type of intervention yet, save a realization that a fiscal year 2022 budget-buster, the deficit growing in the unemployment insurance trust fund, needs addressing. Instead, the main impetus for the session came from majority-party members carping about the overbroad, stale restrictions and wanting to clip Edwards’ wings on that. Another reason to meet again, dealing with the after-effects of Hurricane Laura, also contributed, but even with that it’s questionable whether enough impetus to congregate one more time would have developed without the disgust over the needlessly harsh strictures.

Bogus reasons behind Edwards virus policy

Perhaps the reason why Louisiana has had the country’s worst economy and most troubling health indicators throughout the Wuhan coronavirus pandemic is because of the wretched scientific advice Democrat Gov. John Bel Edwards receives from bureaucrats, whether he has any interest in following scientific knowledge rather than political agendas.

That became clear last week in testimony from a pair of Department of Health officials to a House of Representatives panel. This came during debate over measures that would force legislative input into renewal of gubernatorial public health emergency declarations, over which currently he has sole authority. The Republican legislative majority generally has complained that the scope and intensity of restrictions continue past any reasonable utility; Edwards has said he plans to keep these on with little modification “until a vaccine is widely available.”

Often, Edwards has hidden behind the skirts of the federal government saying his strictures follow these guidelines, except that he has taken great liberties with choosing how to apply those standards that leads to tremendous inconsistency in application that appears more grounded in politics than science. Further, his administration asserts that his orders are less restrictive than in many other states with lower rates of virus infections.

Much room for LSU free speech improvement

It’s bad enough that, overall, the most popular universities in America don’t fare well on their commitment to free speech. Worse still for Louisianans, Louisiana State University scores close to the bottom of them all.

RealClearEducation, part of the complex of websites best known for its flagship RealClearPolitics, along with the Foundation for Individual Rights in Education and College Pulse, has created an index called the College Free Speech Rankings. The former advocates and litigates for robust free expression policies on campuses, while the latter collects data online and provides analysis of student opinion.

The rankings accumulate data from five different areas, most of which comes from student perceptions about a school’s openness, tolerance, administrative support, and comfort with self-expression. Mixed into that is FIRE’s Spotlight Database, which evaluates schools on their policies’ fidelity to First Amendment jurisprudence.

Panel shows full-frontal cowardice, hypocrisy

In fewer than 15 minutes, Louisianans were treated to full-frontal political cowardice and hypocrisy at yesterday’s Revenue Estimating Conference meeting.

That gathering came after the REC punted during its previous meeting last week its duty concerning the state’s unemployment trust fund. R.S. 23:1474 requires that the REC, between Sep. 5 and 30, project the balance of the fund for the beginning of next September. In doing so, it is to “consider all information, including projections and information from the United States and state departments of labor, in its analysis for [the] official projection.”

The determination affects what rates employers must pay and maximum benefit amounts payable to unemployment insurance recipients for next calendar year. If the fund has below $750 million, the former increases and the latter decreases for 2021.

Edwards mess grows with invalid decree

Louisiana Democrat Gov. John Bel Edwards has moved onto a new section of his party’s playbook. Not only does his policy create a problem that he proposes to solve by doing more of the same, but also he now has taken to proposing for it unconstitutional solutions.

During the budget process, Edwards acted as if the state’s unemployment trust fund wasn’t hemorrhaging its balance. The Wuhan coronavirus pandemic brought a retrenchment in economic activity worse than any other state’s, with a dramatic increase in the state’s unemployment rolls. Although federal policy encouraged this to an extent, Congress compensated somewhat in its CARES Act by allowing the state to use as much of the $1.8 billion gift as it wanted to replenish the fund.

Instead, Edwards asked for not a cent of its use for this purpose and plowed much of CARES Act money into inflating general fund spending by $600 million this year. Regrettably, the Legislature went along but it had more foresight to include $275 million in grant relief for small businesses. This would diminish the drain on the fund by allowing more businesses to stay open and thereby employ more people that additionally would boost the fund with payroll taxes being collected.

Bossier City taxpayers aided, betrayed

Accountability kept Bossier City in line with taxpayer interests. Lack of it led the Cypress-Black Bayou Recreation and Water Conservation District to betray them.

Last week, the Bossier City Council met to deal with the city’s property tax millages in the wake of reassessment. The statewide version that occurs every presidential election year requires that local government entities adjust their rates in response to that so that the total amount paid in from that action remains the same, either down (if values increase) or up (if values decrease). However, in another subsequent vote (or proclamation, in the case of single executives that solely helm a government), any rate below the maximum allowed may be adopted, although increasing the adjusted rates (termed a “roll forward”) require a two-thirds supermajority to enact.

The city had courted controversy a month earlier when a ballot item to renew one of the three taxes subject to elections (the fourth doesn’t require one and lasts into perpetuity, as permitted by the Constitution) asked voters to increase the maximum allowed over the previous 6 mill rate to 6.19 mills. Because of a reassessment that showed a decrease four years earlier, the Council took the opportunity to jack taxes up then, and convinced enough voters to ratify that increase in that election.

Mistake to let LA govts borrow to operate

At least one bad precedent was set at the last Louisiana State Bond Commission meeting, and hopefully legislators will act so more won’t follow.

Most of the panel’s business, comprised of most statewide elected officials, select legislators, and the commissioner of administration, involves allowing local governmental units to issue debt for capital expenditures, approving of election items to fund these, and permitting units to issue short-term debt for operating expenses backed by highly predictable revenue streams, such as a property tax. But at last week’s meeting, it veered off into controversial, if not dangerous for taxpayers, territory.

It approved a request by the Lafayette Parish Convention and Visitors Commission to issue 10-year notes totaling $1 million for continuing operations. Calling it “emergency financing” due to the economic dropoff born of the Wuhan coronavirus pandemic, the quasi-public agency said it needed the money for “continuity of essential government functions.” It said it would need funds by the beginning of next month, having already seen nearly $600,000 fewer in revenues for the year to date and expected a forecast revenue loss even higher over the next 12 months.