Evidence continues to mount that Gov. Bobby Jindal simply does not want an individual income tax cut this year. If this is the case, his administration is handling it completely the wrong way and threatens to terminate any effectiveness of his governorship.
The crux is SB 87 by state Sen. Buddy Shaw which originally was to reduce income taxes for the middle- and highest-level filers in the state, reversing bracket hikes of fives years ago. But it got amended, mostly by those with the intent to stop it one way or the other, to get rid of all income taxes gradually over 10 years. That may be an achievable goal, but so much can happen between now and then that the idea of eliminating individual income taxes – a goal that Jindal himself during last year’s campaign said he hoped, but did not promise, he could achieve before he left the governor’s mansion – could be executed in a better fashion than the current construction of SB 87.
But the most surprising aspect of the whole matter has been an apparent great reluctance for Jindal to go along with its original intent. Jindal never did promise to cut income taxes in any way despite his feeling it was a goal to shoot for, and the Jindal Administration, with widespread acknowledgment from legislators, has warned rightly that budget deficits loom which may argue for getting those under control through spending changes first, then followed by individual tax cuts – even as Jindal already has gotten onto the books business tax cuts.
Still, there is spending in Jindal’s budget that easily could be sacrificed, such as $307.1 million for an economic development “megafund” that could attract large employers to the state – or maybe not at all – to offset the anticipated initial revenues losses from the tax reduction. Further, in about a week the state’s body charged with providing the official amount of revenue available for state spending almost certainly will declare hundreds of millions more dollars available. Even a House committee is looking for other ways to trim the budget. By the numbers, the original SB 87 seems “affordable.”
Jindal initially said, after totally resisting the plan, that if there were offsets elsewhere, he would sign onto it. Well, the House in particular has indicated there will be offsets. But it appears that even so, Jindal operatives have done everything possible to kill any form of SB 87. Observers (and anonymous commenters in this space) assert they perceive the first priority of the Administration has been to stop the original SB 87, then if failing to amend it to stop it and resist any attempts to strip it of the poisonous amendments to save it even if it means having to cast a veto on the amended version, and that the last option seems to be actually signing into law the original bill.
If Jindal truly were in favor of it, as soon as it got out of Senate committee he would have gotten in front of the entire issue, saying he would work with legislators to trim other spending, or perhaps call on them to wait until new revenue estimates got declared. Instead, publicly he issued a lukewarm endorsement and allowed these shenanigans to happen in the Senate. (Perhaps as telling was as soon as the initial poison-pill amendment got tacked onto to the bill by a single vote, Sen. Pres. Joel Chaisson popped open his cellphone and began talking.)
And if Jindal really is against the original bill, why doesn’t he just come out and say it? Why doesn’t he argue that looming budget deficits make this an unwise move this year? Why doesn’t he make the case that even extra excess revenues coming in for this year still are too shaky of a ground at this time on which to bring about a tax cut? Why wouldn’t he even say he would wants to wait a year to see how finances develop and if things look good enough, he will find a way to produce a cut next year?
These arguments won’t please some, but they would demonstrate Jindal is a responsible steward who ultimately believes in individual tax cuts as a moral imperative and an economic development tool. Instead, the impression he is giving through this episode is that he has led many to believe he is one thing but by his actions apparently he is a fraud. Either he must explain why an income tax cut would be so monumentally irresponsible at this time, despite his presumed belief that they assist in making government smaller and increasing individual autonomy, or else his actions indicate he never has believed in these things in the first place – whether that genuinely describes his attitude.
That being the case, now his political position is such that to change this growing impression he must head this off now by giving unqualified support for the original SB 87, telling legislators to give him a clean bill and he signs it, or make the case that, given present finances, it is irresponsible. Giving grudging lip service yet apparently working behind the scenes to defeat it is something we would expect of the past tax-and-spend governors of Louisiana, not what many thought they were getting when they voted for Jindal. And without that support, a promising gubernatorial reign is critically wounded.
Simply, had the Jindal Administration willingly wanted to squander political capital, it could not have picked a more effective way to do it as events now unfold.
Jeffrey D. Sadow is an associate professor of political science at Louisiana State University Shreveport. If you're an elected official, political operative or anyone else upset at his views, don't go bothering LSUS or LSU System officials about that because these are his own views solely. This publishes five days weekly with the exception of 7 holidays. Also check out his Louisiana Legislature Log especially during legislative sessions (in "Louisiana Politics Blog Roll" below).
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1.5.08
30.4.08
Chickens coming home to roost on Democrat plantation
It’s good to see Louisiana’s media finally coming to understand something that has been reiterated in this space ever since the summer of 2006 – that the switch from blanket to closed primaries for federal contests in Louisiana ended the Democrat Party as we know it in the state, hastening its move into minority status. And it happened because a good portion of its members wanted it to work this way.
Republicans, of course, prefer their move into majority status, but two years ago they were outnumbered in the Legislature and did not control the Governor’s Mansion. In order to pass the legislation that would change primaries from a contest where all ran together regardless of partisan identification with the top two finishers squaring off again if none got an absolute majority, to having separate party primaries where nominees must win with a majority utilizing a runoff if necessary but then who meet against all candidates in a general election where plurality wins, they needed allies. They got them – black Democrat lawmakers.
Understand that until now in Louisiana, the last vestige of slavery has been among the Democrats. White politicians have acted as the masters because they could win general elections. This was because they could better position themselves as “moderates” even though many white candidates are almost if not as liberal as black candidates. Both the state and national levels of the part have recognized this for decades and therefore typically support only white candidates regardless of primary selection method. Thus, black Democrats for national elections by the party are treated as slaves – their only use is to dredge votes for white candidates and then the white Democrat winners, fearful of alienating more conservative white voters who might defect to future GOP candidates while taking for granted black voters would stay on the plantation regardless, would fail to support policy preferences of black leaders who manipulated much of the black vote.
But this dynamic could hold only so long as an escape route off the plantation was not offered to black leaders. The closed primary presented itself as this chance, in two ways. First, if the state Republicans would close their primaries totally – meaning independents could not participate in them – this would encourage conservative whites who had registered previously as Democrats to switch, draining this pool of support for white Democrat candidates in a closed primary, even if Democrats continued to allow independents to participate. (If the GOP followed that option too, they may hope to convert those independents, but then voters could register as independents and jump back and forth, largely recreating the dynamic under the blanket system.)
The GOP cooperated on this account by completely closing their primaries. Over time, perhaps in the next couple of years, as whites file out of the Democrats while blacks stay with the party for the most part, blacks will become the plurality if not majority in certain important constituencies. For example, at the beginning of the year, white Democrats outnumbered blacks by about 4,000 in the 6th Congressional District. In the next three months, spanning three instances of closed primary elections, whites lost about 1,000 registrants, blacks gained about 3,000 and, for the first time in history, black Democrats now outnumber whites (by nine).
This does not lead black politicians to primary wins, however, not yet. So the second, interim strategy for blacks to exit white Democrat servitude is to take advantage of the plurality-win standard. In some jurisdictions, demographics were such that under the blanket primary system the primary would produce a black Democrat as the top vote-getter – only to then have that candidate lose to a white Democrat or Republican in the general election runoff. But there is no runoff under these new rules, meaning blacks now can win in places where only white Democrats could previously.
In fact, in most jurisdictions like this, it will be Republicans rather than black Democrats who can win. However, that is not the central issue for black Democrat leaders. Their goal is not to increase the total number of Democrats elected, but to increase the number of black Democrats being elected – even if it means blacks running as independents in the general election until their voters control the party. So, note the community of interests between Republicans and black Democrats in establishing the closed primary: Republicans will have better chances to win more Congressional seats, blacks will have better chances to win more such seats, and white Democrats chances will be far less.
The transformation that has occurred courtesy of the closed primary for federal elections because it enabled the divide in the community of interests between white and black Democrats to favor the latter’s interests more by departing rather than by staying. In promoting their interests, as long as black Democrats under the blanket primary had the least electoral power of the three main entities in state politics (themselves, white Democrats, and Republicans), their best choice to get as much of their agenda as they could was sticking with white Democrat candidates. But now with this escape route provided by the closed primary, they don’t need to support white Democrat candidates to increase the chances of their agenda’s adoption, with the paramount concern of that agenda being to elect black candidates because supposedly they better represent presumed black interests.
Thus, when black and Republican lawmakers in the Legislature united in 2006 to pass the legislation enabling closed federal primaries, white Democrats could stop them only in one way – by having white Democrat former Gov. Kathleen Blanco veto the bill. But she didn’t, likely for two reasons: the sum of Republican and black Democrat legislators were close to veto-proof majorities in each chamber, and because there was some sentiment among even white Democrats to go in this direction because the courts were requiring later general election runoffs for Louisiana contests because of the blanket primary, meaning loss of seniority and other perquisites for Louisianans in Congress.
Regardless, the state’s Democrat Party forever is altered for national contests. Expect that within a few years, also as a consequence of redistricting, the only members of the U.S. House will be Republicans and black Democrats, and just one of the latter at a time. It also is logical that when Sen. Mary Landrieu leaves office, perhaps as early as the beginning of next year, few if any white Democrats will find their way to the U.S. Senate for the foreseeable future. These are the consequences of the chickens coming home to roost on the Louisiana Democrat plantation.
Republicans, of course, prefer their move into majority status, but two years ago they were outnumbered in the Legislature and did not control the Governor’s Mansion. In order to pass the legislation that would change primaries from a contest where all ran together regardless of partisan identification with the top two finishers squaring off again if none got an absolute majority, to having separate party primaries where nominees must win with a majority utilizing a runoff if necessary but then who meet against all candidates in a general election where plurality wins, they needed allies. They got them – black Democrat lawmakers.
Understand that until now in Louisiana, the last vestige of slavery has been among the Democrats. White politicians have acted as the masters because they could win general elections. This was because they could better position themselves as “moderates” even though many white candidates are almost if not as liberal as black candidates. Both the state and national levels of the part have recognized this for decades and therefore typically support only white candidates regardless of primary selection method. Thus, black Democrats for national elections by the party are treated as slaves – their only use is to dredge votes for white candidates and then the white Democrat winners, fearful of alienating more conservative white voters who might defect to future GOP candidates while taking for granted black voters would stay on the plantation regardless, would fail to support policy preferences of black leaders who manipulated much of the black vote.
But this dynamic could hold only so long as an escape route off the plantation was not offered to black leaders. The closed primary presented itself as this chance, in two ways. First, if the state Republicans would close their primaries totally – meaning independents could not participate in them – this would encourage conservative whites who had registered previously as Democrats to switch, draining this pool of support for white Democrat candidates in a closed primary, even if Democrats continued to allow independents to participate. (If the GOP followed that option too, they may hope to convert those independents, but then voters could register as independents and jump back and forth, largely recreating the dynamic under the blanket system.)
The GOP cooperated on this account by completely closing their primaries. Over time, perhaps in the next couple of years, as whites file out of the Democrats while blacks stay with the party for the most part, blacks will become the plurality if not majority in certain important constituencies. For example, at the beginning of the year, white Democrats outnumbered blacks by about 4,000 in the 6th Congressional District. In the next three months, spanning three instances of closed primary elections, whites lost about 1,000 registrants, blacks gained about 3,000 and, for the first time in history, black Democrats now outnumber whites (by nine).
This does not lead black politicians to primary wins, however, not yet. So the second, interim strategy for blacks to exit white Democrat servitude is to take advantage of the plurality-win standard. In some jurisdictions, demographics were such that under the blanket primary system the primary would produce a black Democrat as the top vote-getter – only to then have that candidate lose to a white Democrat or Republican in the general election runoff. But there is no runoff under these new rules, meaning blacks now can win in places where only white Democrats could previously.
In fact, in most jurisdictions like this, it will be Republicans rather than black Democrats who can win. However, that is not the central issue for black Democrat leaders. Their goal is not to increase the total number of Democrats elected, but to increase the number of black Democrats being elected – even if it means blacks running as independents in the general election until their voters control the party. So, note the community of interests between Republicans and black Democrats in establishing the closed primary: Republicans will have better chances to win more Congressional seats, blacks will have better chances to win more such seats, and white Democrats chances will be far less.
The transformation that has occurred courtesy of the closed primary for federal elections because it enabled the divide in the community of interests between white and black Democrats to favor the latter’s interests more by departing rather than by staying. In promoting their interests, as long as black Democrats under the blanket primary had the least electoral power of the three main entities in state politics (themselves, white Democrats, and Republicans), their best choice to get as much of their agenda as they could was sticking with white Democrat candidates. But now with this escape route provided by the closed primary, they don’t need to support white Democrat candidates to increase the chances of their agenda’s adoption, with the paramount concern of that agenda being to elect black candidates because supposedly they better represent presumed black interests.
Thus, when black and Republican lawmakers in the Legislature united in 2006 to pass the legislation enabling closed federal primaries, white Democrats could stop them only in one way – by having white Democrat former Gov. Kathleen Blanco veto the bill. But she didn’t, likely for two reasons: the sum of Republican and black Democrat legislators were close to veto-proof majorities in each chamber, and because there was some sentiment among even white Democrats to go in this direction because the courts were requiring later general election runoffs for Louisiana contests because of the blanket primary, meaning loss of seniority and other perquisites for Louisianans in Congress.
Regardless, the state’s Democrat Party forever is altered for national contests. Expect that within a few years, also as a consequence of redistricting, the only members of the U.S. House will be Republicans and black Democrats, and just one of the latter at a time. It also is logical that when Sen. Mary Landrieu leaves office, perhaps as early as the beginning of next year, few if any white Democrats will find their way to the U.S. Senate for the foreseeable future. These are the consequences of the chickens coming home to roost on the Louisiana Democrat plantation.
29.4.08
House, Jindal must intervene to save income tax reversal
Senators battled for the soul of the state’s people and taxpayers in today’s dealing with SB 87 that showed off some great fireworks. State Sen. Buddy Shaw’s bill would phase out in a few years the increase in income taxes that came as part of the “Stelly” Plan. The Democrat-controlled Senate took this as an opportunity to fight back against tax cuts in particular, and Gov. Bobby Jindal and Republicans in general, demonstrating classic legislative shenanigans fully compliant with the state’s history of populism.
The big point of contention came when state Sen. Nick Gautreaux sent up an amendment that would phase out income taxes entirely over 10 years. Shaw and state Sen. Robert Adley were persistent critics, accusing Gautreaux of trying to sink the bill which he consistently denied. After all the shouting died down, it passed 19-18 with mostly Democrats in favor (just state Sens. Bill Cassidy and Steve Scalise in favor as Republicans) and most Republicans and a few Democrats against. (Sen. Julie Quinn missed the day’s votes; being a Republican unless she indicates otherwise she might have provided the 19th vote against and had the bill go clean.)
State Sen. Joe McPherson has the most interesting comments. He said he voted for the amendment, and pointed out that Gautreaux actually held his vote his own amendment band essentially tricked him into voting for it, because he wanted to be on the record for getting rid of income taxes. By contrast, he noted that all the other Democrat amendments were withdrawn meaning they were disingenuous. At the same time, he said Gautreaux was sincere in trying to get his amendment into law, which he has introduced as separate legislation before. Still, the matter should be repealing Stelly, not the larger matter of income taxes, and therefore he would vote for Shaw’s amendment to undo.
The big point of contention came when state Sen. Nick Gautreaux sent up an amendment that would phase out income taxes entirely over 10 years. Shaw and state Sen. Robert Adley were persistent critics, accusing Gautreaux of trying to sink the bill which he consistently denied. After all the shouting died down, it passed 19-18 with mostly Democrats in favor (just state Sens. Bill Cassidy and Steve Scalise in favor as Republicans) and most Republicans and a few Democrats against. (Sen. Julie Quinn missed the day’s votes; being a Republican unless she indicates otherwise she might have provided the 19th vote against and had the bill go clean.)
State Sen. Joe McPherson has the most interesting comments. He said he voted for the amendment, and pointed out that Gautreaux actually held his vote his own amendment band essentially tricked him into voting for it, because he wanted to be on the record for getting rid of income taxes. By contrast, he noted that all the other Democrat amendments were withdrawn meaning they were disingenuous. At the same time, he said Gautreaux was sincere in trying to get his amendment into law, which he has introduced as separate legislation before. Still, the matter should be repealing Stelly, not the larger matter of income taxes, and therefore he would vote for Shaw’s amendment to undo.
28.4.08
Sensible changes resolve Jindal/House budget dispute
Given the complexity and intricacy of dealing with the Louisiana state budget, it’s easy to get lost in the policy debate between the Gov. Bobby Jindal Administration, which favors using $420.1 million in surplus revenues to fund recurring programs, and House leaders, who are angling to reduce that figure. Sorting it all out gives a better idea of how to proceed.
First, there is a bit of conceptual confusion involved. When the Administration speaks of using “one-time” revenues, it’s not the same thing as “non-recurring” revenues which in fact can be used constitutionally for just a few purposes. The revenues referred to in this debate are those declared surplus over previous projections before the fiscal year is over, meaning they can be used for any purpose. Because they are unexpected, they might be temporary in that similar amounts might not be forthcoming in future years, and projections suggest that they won’t be. Thus, we don’t really know whether that level of revenue will be sustained, so the argument is over, whether to be on the safe side, if these “excess” revenues be committed to recurring expenses.
In reality, after the second special session, about $900 million was left of this recurring surplus, of which the $420.1 million will go to recurring spending. The rest is for what is considered non-recurring expenditures, on a variety of things the House is looking critically on including $307.1 million for an economic development “megafund” to attract large employers. But is also in interested in paring down other “new” spending it sees elsewhere in the budget besides that directly tied by the Administration to this surplus.
Second, the $420.1 million that is directly tied goes into one area – health care spending. In contrast, the House when it declared it wanted to look at the possibility of 5 percent cuts across the board in discretionary general spending of the state general fund – which exempts almost three-quarters of spending (including that by the Executive Department as most of its funds, even if not legally or constitutionally protected, are passing through from the federal government for recovery purposes) – it included every agency. While health care takes up the vast bulk of this amount, higher education at around a tenth of it could be disproportionately affected. So if the House wanted to make cuts, some might come not from the area that is getting all of the “one-time” money for recurring purposes.
Third, the House points out other new commitments are in the budget not tied to the surplus, which the Administration disputes only in terms of the amounts. These it has declared also may become targets of its cutting. Finally, to add to the fun, momentum is growing to pass an income tax cut that could remove, in the short term, $302 million in revenues, which actually creates an additional issue since it can be like declaring that amount of money itself is now “one-time.”
Even as the Administration has reduced use of surplus revenues by almost half over last year, given looming budget deficits probably it is a good idea to reduce them further, not by some arbitrary amount, but by excising items that, in policy terms, have a low or negative return. As it is, it doesn’t total the $420.1 million, but it’s a beginning.
This figure should not include the tax cut because it is conceptually erroneous to define that forgone revenue as “lost” and therefore “one-time.” In reality, history shows a tax cut of that magnitude within one or two years should begin to restore revenues from increased economic productivity that will close the hole within a few years. Thus, like the megafund, it really is a one-time “expense” and, as suggested elsewhere, therefore should be pursued instead of the addition to the fund.
Several other items stand out in the budget that should not require new commitments, also mentioned elsewhere. One is continuing to give pay raises to public school teachers who have yet to show their existing salaries match student achievement and who refuse to accept individual accountability measures tied into their abilities which could save $56 million.
Another is reducing outlays to higher education. My colleagues will be miffed by my pointing this out, but almost every school in the state got a big increase last year and unless a school’s administration was entirely reckless in utilizing it, a five percent cut would at best mildly impair operations and leave schools well above their level of two years ago. And there may be relief on the way in the form of governing boards being allowed to raise the lowest average tuition in the South courtesy of legislation making its way through the chambers (even if it gets diluted by the fact that roughly half of Louisiana in-state college students have their tuitions paid through the TOPS program). This would save (if across the board) $71 million – but tuition increases of 3 percent would capture back roughly $13 million.
Finally, there are additional monies for nursing homes, whose share and dollar amounts in the budget ought to be declining as the state moves more towards community-based case. This is a consequence of the Barthelemy case brought a decade ago mandating that the state spend more for that type of care, which is why the Administration budgeted $169 million in new commitments. The problem is, there are no offsetting cuts to nursing homes which are already among the most over-utilized and over-bedded in the country. The $60 million increase here should scrapped; if necessary, by changing the law passed a couple of years ago which encourages over-utilization.
This totals $186 million – a good start. The rest may be made up in future years by realigning indigent health care to emphasize money following the person rather than going to institutions that will reduce expenses, and with new revenues generated from the tax cuts. Such reconfiguration of the budget will put Louisiana on its best financial footing in decades.
First, there is a bit of conceptual confusion involved. When the Administration speaks of using “one-time” revenues, it’s not the same thing as “non-recurring” revenues which in fact can be used constitutionally for just a few purposes. The revenues referred to in this debate are those declared surplus over previous projections before the fiscal year is over, meaning they can be used for any purpose. Because they are unexpected, they might be temporary in that similar amounts might not be forthcoming in future years, and projections suggest that they won’t be. Thus, we don’t really know whether that level of revenue will be sustained, so the argument is over, whether to be on the safe side, if these “excess” revenues be committed to recurring expenses.
In reality, after the second special session, about $900 million was left of this recurring surplus, of which the $420.1 million will go to recurring spending. The rest is for what is considered non-recurring expenditures, on a variety of things the House is looking critically on including $307.1 million for an economic development “megafund” to attract large employers. But is also in interested in paring down other “new” spending it sees elsewhere in the budget besides that directly tied by the Administration to this surplus.
Second, the $420.1 million that is directly tied goes into one area – health care spending. In contrast, the House when it declared it wanted to look at the possibility of 5 percent cuts across the board in discretionary general spending of the state general fund – which exempts almost three-quarters of spending (including that by the Executive Department as most of its funds, even if not legally or constitutionally protected, are passing through from the federal government for recovery purposes) – it included every agency. While health care takes up the vast bulk of this amount, higher education at around a tenth of it could be disproportionately affected. So if the House wanted to make cuts, some might come not from the area that is getting all of the “one-time” money for recurring purposes.
Third, the House points out other new commitments are in the budget not tied to the surplus, which the Administration disputes only in terms of the amounts. These it has declared also may become targets of its cutting. Finally, to add to the fun, momentum is growing to pass an income tax cut that could remove, in the short term, $302 million in revenues, which actually creates an additional issue since it can be like declaring that amount of money itself is now “one-time.”
Even as the Administration has reduced use of surplus revenues by almost half over last year, given looming budget deficits probably it is a good idea to reduce them further, not by some arbitrary amount, but by excising items that, in policy terms, have a low or negative return. As it is, it doesn’t total the $420.1 million, but it’s a beginning.
This figure should not include the tax cut because it is conceptually erroneous to define that forgone revenue as “lost” and therefore “one-time.” In reality, history shows a tax cut of that magnitude within one or two years should begin to restore revenues from increased economic productivity that will close the hole within a few years. Thus, like the megafund, it really is a one-time “expense” and, as suggested elsewhere, therefore should be pursued instead of the addition to the fund.
Several other items stand out in the budget that should not require new commitments, also mentioned elsewhere. One is continuing to give pay raises to public school teachers who have yet to show their existing salaries match student achievement and who refuse to accept individual accountability measures tied into their abilities which could save $56 million.
Another is reducing outlays to higher education. My colleagues will be miffed by my pointing this out, but almost every school in the state got a big increase last year and unless a school’s administration was entirely reckless in utilizing it, a five percent cut would at best mildly impair operations and leave schools well above their level of two years ago. And there may be relief on the way in the form of governing boards being allowed to raise the lowest average tuition in the South courtesy of legislation making its way through the chambers (even if it gets diluted by the fact that roughly half of Louisiana in-state college students have their tuitions paid through the TOPS program). This would save (if across the board) $71 million – but tuition increases of 3 percent would capture back roughly $13 million.
Finally, there are additional monies for nursing homes, whose share and dollar amounts in the budget ought to be declining as the state moves more towards community-based case. This is a consequence of the Barthelemy case brought a decade ago mandating that the state spend more for that type of care, which is why the Administration budgeted $169 million in new commitments. The problem is, there are no offsetting cuts to nursing homes which are already among the most over-utilized and over-bedded in the country. The $60 million increase here should scrapped; if necessary, by changing the law passed a couple of years ago which encourages over-utilization.
This totals $186 million – a good start. The rest may be made up in future years by realigning indigent health care to emphasize money following the person rather than going to institutions that will reduce expenses, and with new revenues generated from the tax cuts. Such reconfiguration of the budget will put Louisiana on its best financial footing in decades.
27.4.08
Jindal tax cut resistance threatens self-inflicted wound
The Gov. Bobby Jindal Express actually found a train traveling faster than itself last week. Whether it’s going to get out of the way, latch onto it, and take it over is another matter, the decision about which can have tremendous political reverberations.
Jindal’s gubernatorial campaign rhetoric spoke of creating smaller government and hoped (but did not promise in his first term) to achieve reductions if not the elimination of income taxes. Yet Jindal also made clear the state faced major fiscal problems, principally the previous commission of non-recurring dollars for recurring expenses, that also needed to be worked out, and so thus his first budget contained no income tax reduction.
But in light of large surpluses from the recovery-stimulated budget, and to fulfill a campaign promise by state Sen. Buddy Shaw, his SB 87 was introduced to cut income tax rates back to the levels prior to enactment of the “Stelly Plan” five years ago which saw some hefty income tax increases. Perhaps unexpectedly, it received a very enthusiastic response in committee as even senators who in the past had thrown cold water on income tax cuts now endorsed it.
24.4.08
Cable bill seeks to end local govt revenue-raising scam
The only thing that has changed in the two years since former Gov. Kathleen Blanco vetoed HB 699 is that this year’s SB 422, largely duplicative of the 2006 bill, is almost certain to be signed, if it makes it to him, by Gov. Bobby Jindal. If so, finally Louisiana cable consumer will have price relief even as local governments complain at the loss of a backdoor way to extract funds from their citizens.
The bill does many things, but most importantly it creates a statewide franchise, rather than local franchise, for cable provision. Local governments have manipulated this franchising power for many years, forcing providers into expensive operations which created a virtual monopoly situation as these requirements made it prohibitively expensive for new market entrants. These governments then took advantage of the situation as they legally could use franchise fees paid by consumers as a form of indirect taxation on them, and would do little to discourage the monopolistic cable television providers from raising rates since the franchise fee take would go higher as well. This is why many studies (not just the one released in conjunction with the bill) confirm the benefits of the arrangement in the bill include lower rates.
In terms of content of argumentation, nothing has changed, except that two years ago the cable company/local government alliance tried to sell opposition, laughably, that a decrease in competition would occur, obscuring their real motives that it was all about money (which I laid bare then). They displayed no such pretense yesterday in Senate committee hearings, but their whining about loss of revenue was again wanting – lower rates would increase usage and may offset any potential loss through volume.
Again, however, some pretense is involved. The real concern of local governments is that they cannot control rates, not only because there will be a greater chance of competition, but because the state now will have that authority, thus they cannot squeeze ratepayers at will. And high comedy was provided when their representatives asserted they, in fact, were all in favor of competition by trotting out the fact that a hundred local governments had passed resolutions asking for more providers to enter the market – but attached to a “model” agreement or something similar that was so heavily biased in favor of existing providers’ desires and the local governments that no competitor who wanted to make money would sign on to it. Not surprisingly, none have.
Another old, vetted argument trotted out against it was somehow gross revenues on which the (maximum) five percent fee would be returned to local governments would be manipulated to reduce it. But the bill’s wording makes this practically impossible, and no doubt if there is any genuine concern here, the bill can be tightened on the floor (it passed committee).
Two years ago, the cable television/local government alliance’s tactics were to cry foul on competition matters to hide the fact they wanted to be able to extract more money at their own will out of consumers. Now, the tactic is to complain they somehow won’t get a “fair” share, which still cloaks the fact that now it continues to be about that power of extraction. Exercising this power pits consumers against local governments, and while last time consumers lost, signs are good this time state policy-makers are going to make consumers the winners.
The bill does many things, but most importantly it creates a statewide franchise, rather than local franchise, for cable provision. Local governments have manipulated this franchising power for many years, forcing providers into expensive operations which created a virtual monopoly situation as these requirements made it prohibitively expensive for new market entrants. These governments then took advantage of the situation as they legally could use franchise fees paid by consumers as a form of indirect taxation on them, and would do little to discourage the monopolistic cable television providers from raising rates since the franchise fee take would go higher as well. This is why many studies (not just the one released in conjunction with the bill) confirm the benefits of the arrangement in the bill include lower rates.
In terms of content of argumentation, nothing has changed, except that two years ago the cable company/local government alliance tried to sell opposition, laughably, that a decrease in competition would occur, obscuring their real motives that it was all about money (which I laid bare then). They displayed no such pretense yesterday in Senate committee hearings, but their whining about loss of revenue was again wanting – lower rates would increase usage and may offset any potential loss through volume.
Again, however, some pretense is involved. The real concern of local governments is that they cannot control rates, not only because there will be a greater chance of competition, but because the state now will have that authority, thus they cannot squeeze ratepayers at will. And high comedy was provided when their representatives asserted they, in fact, were all in favor of competition by trotting out the fact that a hundred local governments had passed resolutions asking for more providers to enter the market – but attached to a “model” agreement or something similar that was so heavily biased in favor of existing providers’ desires and the local governments that no competitor who wanted to make money would sign on to it. Not surprisingly, none have.
Another old, vetted argument trotted out against it was somehow gross revenues on which the (maximum) five percent fee would be returned to local governments would be manipulated to reduce it. But the bill’s wording makes this practically impossible, and no doubt if there is any genuine concern here, the bill can be tightened on the floor (it passed committee).
Two years ago, the cable television/local government alliance’s tactics were to cry foul on competition matters to hide the fact they wanted to be able to extract more money at their own will out of consumers. Now, the tactic is to complain they somehow won’t get a “fair” share, which still cloaks the fact that now it continues to be about that power of extraction. Exercising this power pits consumers against local governments, and while last time consumers lost, signs are good this time state policy-makers are going to make consumers the winners.
23.4.08
Full-time pay perverts LA's citizen-legislator ideal
As bills wend their way through the Louisiana Legislature to increase salaries of staff and elected members, the lack of appropriateness of the increase cannot be understood unless remuneration issues and the concept of a state legislature are first grasped.
One common misunderstanding, sometimes purposively maintained by the legislators themselves, is that except for a very few (leaders, who are paid much higher) they “only” making $16,800 a year ($1,400 per month). This figure ignores the per diem legislators receive for every day the Legislature is in session for which they are not declared absent, as well as for any interim meetings or activities (even convention attendance), this year at $143, meaning the base pay of all but the most negligent legislators will be, including special sessions, this year over $32,000. In fact, this is not much below the $36,729 median household income figure for Louisiana in 2005; throw in enough interim committee meetings and they’ll get there.
That this with no base increase represents a full-time salary is troubling because the guiding conceptualization behind most state legislatures, including Louisiana’s is that they are to be part-time institutions. (The above amounts do not include other benefits such as office supplements.) These officials are not supposed to be full-timers precisely because, with the Legislature in session only two or three moths of the year regularly, they are to circulate among and live as common citizens at least three-quarters of the year. It’s bad enough that the generous amounts already given permit many to avoid that status; it would be catastrophic to jack base pay to the levels paid in all but a couple of states in separating legislators from their constituents.
Some try to defend the final detachment of legislators from their roots as ordinary citizens courtesy of this increase by arguing the nature of the job is such that they should be considered full-timers. This has the relationship exactly backwards and perverts the original intent: if legislators seem now to have full-time jobs, it is because by their own actions they have expanded government beyond its genuine, essential functions to make enough work for themselves to justify presenting themselves as full-timers. The solution is not to acquiesce to this corruption of the true mission of government by declaring legislators full-timers, but by paring the size of government to make it easier for legislators to fulfill the role of citizen-legislator. If they choose not to, it is illegitimate to force the taxpayer to subsidize this conceit.
Finally, there simply can be no justification to pay ordinary legislators around $70,000 a year when at most they work full-time from 75-100 days a year. Unless the state wants to abandon the citizen-legislator model and create a professional legislature, at best this is egocentric; at worst, wasteful. Legislators must understand it is an honor and privilege to serve and compensation should not even be a consideration. If it is, nobody is putting a gun to their heads and making them serve, they are free to resign their offices and make way for those who have a better, correct attitude about the role of legislator.
There’s also no evidence that full-time legislators can do any better in governance. There are plenty of examples of legislatures in the U.S. that seem to do a far better job than Louisiana’s for much less pay. Neighboring Texas, for example, has its legislature meet only every other year, paying $600 monthly and a per diem the size of Louisiana’s – and Texas state senators have districts as populated and as geographically sprawling as U.S. House districts, yet there seems to be no shortage of people willing to serve in an institution whose policy output historically has been much better than Louisiana’s.
Simply, no justification exists for making Louisiana legislators full-timers, except for its elements of self-service and ego boost of existing legislators.
One common misunderstanding, sometimes purposively maintained by the legislators themselves, is that except for a very few (leaders, who are paid much higher) they “only” making $16,800 a year ($1,400 per month). This figure ignores the per diem legislators receive for every day the Legislature is in session for which they are not declared absent, as well as for any interim meetings or activities (even convention attendance), this year at $143, meaning the base pay of all but the most negligent legislators will be, including special sessions, this year over $32,000. In fact, this is not much below the $36,729 median household income figure for Louisiana in 2005; throw in enough interim committee meetings and they’ll get there.
That this with no base increase represents a full-time salary is troubling because the guiding conceptualization behind most state legislatures, including Louisiana’s is that they are to be part-time institutions. (The above amounts do not include other benefits such as office supplements.) These officials are not supposed to be full-timers precisely because, with the Legislature in session only two or three moths of the year regularly, they are to circulate among and live as common citizens at least three-quarters of the year. It’s bad enough that the generous amounts already given permit many to avoid that status; it would be catastrophic to jack base pay to the levels paid in all but a couple of states in separating legislators from their constituents.
Some try to defend the final detachment of legislators from their roots as ordinary citizens courtesy of this increase by arguing the nature of the job is such that they should be considered full-timers. This has the relationship exactly backwards and perverts the original intent: if legislators seem now to have full-time jobs, it is because by their own actions they have expanded government beyond its genuine, essential functions to make enough work for themselves to justify presenting themselves as full-timers. The solution is not to acquiesce to this corruption of the true mission of government by declaring legislators full-timers, but by paring the size of government to make it easier for legislators to fulfill the role of citizen-legislator. If they choose not to, it is illegitimate to force the taxpayer to subsidize this conceit.
Finally, there simply can be no justification to pay ordinary legislators around $70,000 a year when at most they work full-time from 75-100 days a year. Unless the state wants to abandon the citizen-legislator model and create a professional legislature, at best this is egocentric; at worst, wasteful. Legislators must understand it is an honor and privilege to serve and compensation should not even be a consideration. If it is, nobody is putting a gun to their heads and making them serve, they are free to resign their offices and make way for those who have a better, correct attitude about the role of legislator.
There’s also no evidence that full-time legislators can do any better in governance. There are plenty of examples of legislatures in the U.S. that seem to do a far better job than Louisiana’s for much less pay. Neighboring Texas, for example, has its legislature meet only every other year, paying $600 monthly and a per diem the size of Louisiana’s – and Texas state senators have districts as populated and as geographically sprawling as U.S. House districts, yet there seems to be no shortage of people willing to serve in an institution whose policy output historically has been much better than Louisiana’s.
Simply, no justification exists for making Louisiana legislators full-timers, except for its elements of self-service and ego boost of existing legislators.
22.4.08
Jindal courts political trouble with tax cut opposition
A few Louisiana senators fired a shot across the bow of the Gov. Bobby Jindal Administration when they passed Sen. Buddy Shaw’s SB 87 out of committee. The bill would move back up the income levels that push individual income tax filers into the middle (4 percent) and highest (6 percent) brackets to what they had been prior to passage of the “Stelly Plan.”
Interestingly, besides Shaw himself one of the more persistent advocates of passing the bill out, which moved essentially on a party-line vote with Democrats opposing, was Sen. Robert Adley, more known for his restraining such moves in the past. Last year, in committee he verbally chided Shaw’s predecessor for a similar but more far-reaching bill. This time, he went on the offensive against a representative of Jindal’s.
When the adviser, John Carpenter, averred that Jindal could not support the bill at this time, although he also said in a few weeks as the budget process moved forward it might become possible, Adley offered not one but two reasons why Jindal should not hesitate. First, he agreed with comments made earlier in the day and in this hearing by the Legislative Fiscal Office that another missed budget projection should create another surplus for this fiscal year, especially as oil and gas prices remained high (at present $30 above the oil prediction and $3.50 over the gas guess, which if maintained for a year would bring in an additional $450 million -- $12 million per buck higher for oil, $600,000 per cent higher for gas). He also suggested Jindal’s requested $307.1 million enrichment of megafund to attract business be used to pay for the tax cut, as he correctly noted greater economic development potential would come from that use of it.
Interestingly, besides Shaw himself one of the more persistent advocates of passing the bill out, which moved essentially on a party-line vote with Democrats opposing, was Sen. Robert Adley, more known for his restraining such moves in the past. Last year, in committee he verbally chided Shaw’s predecessor for a similar but more far-reaching bill. This time, he went on the offensive against a representative of Jindal’s.
When the adviser, John Carpenter, averred that Jindal could not support the bill at this time, although he also said in a few weeks as the budget process moved forward it might become possible, Adley offered not one but two reasons why Jindal should not hesitate. First, he agreed with comments made earlier in the day and in this hearing by the Legislative Fiscal Office that another missed budget projection should create another surplus for this fiscal year, especially as oil and gas prices remained high (at present $30 above the oil prediction and $3.50 over the gas guess, which if maintained for a year would bring in an additional $450 million -- $12 million per buck higher for oil, $600,000 per cent higher for gas). He also suggested Jindal’s requested $307.1 million enrichment of megafund to attract business be used to pay for the tax cut, as he correctly noted greater economic development potential would come from that use of it.
21.4.08
Bribery masks, does not change, LA disincentives
What all is this fascination that Louisiana state policy-makers have with bribing people to find employment in the state? We already have Gov. Bobby Jindal and pay-challenged Secretary of Economic Development Stephen Moret stumping to dump over $300 million in a fund to hand over to businesses which relocate into the state. Now we have a proposal to hand others taxpayer dollars – their own, it seems – to stick around or to return to take jobs for at least five years.
HB 1156 by state Rep. Neil Abramson would allow those who graduate from high school in Louisiana (regardless of where they went to college) who get a college degree to divert any state income taxes from employment in state they would pay for five years into an account that could be used for a down payment on a house bought within three years after the five-year period ended. But leave the state before the time is up or don’t buy the house within the time frame, and the money goes into the state’s treasury.
The bill, of course, will do little positive. Louisianans who fit the bill would be reluctant to enter into the program because it so limits their options. What if they find a position out of state with a raise more than sufficient to offset the forgone escrowed taxes within the five years? What if they want to buy a house in order to build equity much sooner? And what if the kinds of jobs appropriate for this level of education don’t exist?
But it’s the entire philosophy behind the bill that is the most objectionable. Like the business megafund idea (or at least its funding at the proposed exaggerated level), it treats symptoms but allows the disease to continue by dangling incentives to compensate for the state’s disincentives, rather than working on eliminating the disincentives themselves.
The disincentives stem from a state fiscal structure that penalizes investment and rewards inferior policy-making agendas. Or, put another way, Louisiana individuals and businesses are overtaxed and their tax dollars are not always wisely spent. To its credit, the Jindal Administration has started working on the latter, and it’s hoped that with things like moving the proposed addition to the megafund instead into a position where it can be used to offer tax relief in future years it will soon get going on the former.
In the interim, this bill may be disregarded as something which will not address the basic problem haunting the state. As Edmund Burke remarked, “To make us love our country, our country ought to be lovely;” Louisiana will begin its turnaround when people, jobs, and investment are attracted by its loveliness, meaning bribery no longer must be used to make it look lovely because it will have become lovely.
HB 1156 by state Rep. Neil Abramson would allow those who graduate from high school in Louisiana (regardless of where they went to college) who get a college degree to divert any state income taxes from employment in state they would pay for five years into an account that could be used for a down payment on a house bought within three years after the five-year period ended. But leave the state before the time is up or don’t buy the house within the time frame, and the money goes into the state’s treasury.
The bill, of course, will do little positive. Louisianans who fit the bill would be reluctant to enter into the program because it so limits their options. What if they find a position out of state with a raise more than sufficient to offset the forgone escrowed taxes within the five years? What if they want to buy a house in order to build equity much sooner? And what if the kinds of jobs appropriate for this level of education don’t exist?
But it’s the entire philosophy behind the bill that is the most objectionable. Like the business megafund idea (or at least its funding at the proposed exaggerated level), it treats symptoms but allows the disease to continue by dangling incentives to compensate for the state’s disincentives, rather than working on eliminating the disincentives themselves.
The disincentives stem from a state fiscal structure that penalizes investment and rewards inferior policy-making agendas. Or, put another way, Louisiana individuals and businesses are overtaxed and their tax dollars are not always wisely spent. To its credit, the Jindal Administration has started working on the latter, and it’s hoped that with things like moving the proposed addition to the megafund instead into a position where it can be used to offer tax relief in future years it will soon get going on the former.
In the interim, this bill may be disregarded as something which will not address the basic problem haunting the state. As Edmund Burke remarked, “To make us love our country, our country ought to be lovely;” Louisiana will begin its turnaround when people, jobs, and investment are attracted by its loveliness, meaning bribery no longer must be used to make it look lovely because it will have become lovely.
20.4.08
Republicans supporting Cazayoux disregard his liberalism
Curiously, some self-identified (whether all are registered as such is another matter) Republicans publicly have announced support for Democrat state Rep. Don Cazayoux in the May 3 special election for the U.S. Sixth District. They point to his beliefs “being pro-life, pro-gun and his ideas for national security” as the reason why. Therefore, one only can conclude they remain ignorant or deluded about his record in the state Legislature that does not support causes traditionally aligned with Republicans.
A review of the past three years of Cazayoux’s votes shows a legislator more than willing to raise taxes and fees to fund big government, to spend taxpayers’ dollars on wasteful projects, to neglect wise spending choices, to introduce greater government control over the economy, and to reduce citizens’ economic choices, among other things. Some of his more outrageous examples follow:
Regarding his views on government intervention into the economy, in 2005, he voted to put a floor on gasoline prices, artificially raising them, and in 2006 voted to increase them again potentially by mandating the use of alternative fuels at a certain point, for increasing the minimum wage which would have hurt business and the economy, and for allowing local government passing through revenue-raising on cable television bills and to restrict consumer choice in that area, and last year voted against the privatization of the state’s troubled insurer.
Concerning his record on taxing and spending, in 2005, he voted to increase taxes on health care providers, that enabled increased government spending, which would have been passed through to consumers, while last year he voted to authorize building of a palatial replacement for New Orleans’ charity hospital that would facilitate continuance of Louisiana’s present costly, inefficient indigent health car provision regime.
Reviewing the kinds of spending priorities he favors, in 2005 he voted to enable more money to be spent on the dubious “economic development” projects around the state, the building of reservoirs, in this case in Morehouse Parish, while in 2006 he did the same for the existing Poverty Point reservoir.
Last year, on several measures designed to reduce government spending that could have led to a tax cut, to cut the size of government through eliminating long-term vacant positions, and to prevent pay raises going to these “ghost” positions, he voted against all of them.
While a vocal of supporter of banning types of free tickets to legislators this year, in 2006 he voted against an almost-identical measure.
In 2006, he voted to extend government protections to practitioners of homosexuality, which would have embroiled government in needless litigation.
Finally, he practices enthusiastically what many are growing to dislike, earmarks, a practice that his Republican opponent Louis “Woody” Jenkins says he will stop.
What also should be causing severe cognitive dissonance for these Republicans is Cazayoux has had a fairly populist and liberal record overall in the Legislature. Over the past three years his scores on the voting scorecard produced in my Louisiana Legislature Log gives him numbers (where 0 is “perfectly” liberal/populist) of 44, 30, and 10. Either these Republicans are not very bright or are willfully ignorant if they cannot see Cazayoux does not believe in the ideas that Republicans typically do.
These wayward GOP identifiers are playing right into the hands of Cazayoux’s campaign which is trying to portray Cazayoux as more conservative than he actually is so he does not seem as out-of-touch which the district as much as he really is. Just because you cherry-pick a few conservative positions does not make you one, and if these Republicans themselves are conservatives they should know that.
A review of the past three years of Cazayoux’s votes shows a legislator more than willing to raise taxes and fees to fund big government, to spend taxpayers’ dollars on wasteful projects, to neglect wise spending choices, to introduce greater government control over the economy, and to reduce citizens’ economic choices, among other things. Some of his more outrageous examples follow:
Regarding his views on government intervention into the economy, in 2005, he voted to put a floor on gasoline prices, artificially raising them, and in 2006 voted to increase them again potentially by mandating the use of alternative fuels at a certain point, for increasing the minimum wage which would have hurt business and the economy, and for allowing local government passing through revenue-raising on cable television bills and to restrict consumer choice in that area, and last year voted against the privatization of the state’s troubled insurer.
Concerning his record on taxing and spending, in 2005, he voted to increase taxes on health care providers, that enabled increased government spending, which would have been passed through to consumers, while last year he voted to authorize building of a palatial replacement for New Orleans’ charity hospital that would facilitate continuance of Louisiana’s present costly, inefficient indigent health car provision regime.
Reviewing the kinds of spending priorities he favors, in 2005 he voted to enable more money to be spent on the dubious “economic development” projects around the state, the building of reservoirs, in this case in Morehouse Parish, while in 2006 he did the same for the existing Poverty Point reservoir.
Last year, on several measures designed to reduce government spending that could have led to a tax cut, to cut the size of government through eliminating long-term vacant positions, and to prevent pay raises going to these “ghost” positions, he voted against all of them.
While a vocal of supporter of banning types of free tickets to legislators this year, in 2006 he voted against an almost-identical measure.
In 2006, he voted to extend government protections to practitioners of homosexuality, which would have embroiled government in needless litigation.
Finally, he practices enthusiastically what many are growing to dislike, earmarks, a practice that his Republican opponent Louis “Woody” Jenkins says he will stop.
What also should be causing severe cognitive dissonance for these Republicans is Cazayoux has had a fairly populist and liberal record overall in the Legislature. Over the past three years his scores on the voting scorecard produced in my Louisiana Legislature Log gives him numbers (where 0 is “perfectly” liberal/populist) of 44, 30, and 10. Either these Republicans are not very bright or are willfully ignorant if they cannot see Cazayoux does not believe in the ideas that Republicans typically do.
These wayward GOP identifiers are playing right into the hands of Cazayoux’s campaign which is trying to portray Cazayoux as more conservative than he actually is so he does not seem as out-of-touch which the district as much as he really is. Just because you cherry-pick a few conservative positions does not make you one, and if these Republicans themselves are conservatives they should know that.
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