Contracting endgame finds opponents' positions invalidated

Previously, this space asked whether, as a result of a legislative initiative to insert Louisiana’s legislature in administrative decision-making, the Gov. Bobby Jindal Administration would play along or humiliate legislators. But the actual rout that has happened and will continue to occur stems not from the Governor’s Mansion, but from the power of ideas.

Last week, the Senate passed a resolution declaring that one of its committees had to approve of any specified contracting activities for public hospitals. Later, the House joined in with a concurrent resolution saying the Joint Legislative Committee on the Budget should do essentially the same, where now the measure moves to the Senate. These were in response to the Administration’s negotiating with nongovernment providers to run the hospitals, effectively becoming the last state to get out of the business of running public hospitals.

Of course, as previously noted, these kinds of declarations are entirely empty given the law and Constitution. Despite that, they got approval as a kind of political fig leaf to hide impotence and to create the impression among constituents that they were vigilantly protecting their interests. The question became whether the Jindal Administration would aid in building this image, which it might have if it could be assured that the faux vetting would not turn into a gripe session or even (admittedly unlikely) symbolic rejection.

Senate's symbolic move leaves contracting unaffected

What may seem to be an interesting and coming potential conflict between the state Senate and the Gov. Bobby Jindal Administration on paper in reality became conjured for reasons of image burnishing that changes nothing else.

Earlier this week, the Senate passed SR 28 by state Sen. Edwin Murray. The resolution, which is a kind of legal instrument that only may express the will of the body or may signal approval of an act where legally the body may intervene, states that, in regards to specific hospital management contracts, that before the state may enter into them any such contract “shall require the approval of the Senate Committee on Finance.” The state has agreed to contract out this management for most of its public hospitals currently run by the Louisiana State University System.

The resolution argues the Senate should do this because legislative approval is needed to close an emergency room or to reduce expenditures of a hospital more than 35 percent, and that Atty. Gen. Buddy Caldwell recently issued an “opinion of the attorney general [that] does not address whether the lease of an entire state hospital facility to a private entity constitutes the closure of the publicly owned hospital facility.” But this tortured logic ignores both statute and the opinion (13-0034).

Data help LA education reform supporters stand firm

Count on opponents of education reform from last year in Louisiana making a run at the restoration of their power and privilege. Those wishing to protect those policy advances should pay attention to the data that ratifies their position and be ready to respond.

Regardless of whether this legislation is overturned by the courts on technicalities, as may happen in the next few months, several bills in this year’s session have been filed to dilute reform measures’ impacts and will be pushed. And if reform laws are overturned, parts of or even all of the measures may face votes again, where opponents will advance any argument, no matter how ludicrous or fact-impaired, in order to serve the special interests that have benefitted from the unreformed, underperforming system and now are threatened by reform.

But the poverty of their assertions will become more obvious as a result of data about the Recovery School District’s New Orleans charter schools in a National Journal piece. It reviews metrics since the hurricane disasters of 2005 and a couple of passages in particular are instructive:

Belated taxpayers concern obscures self-serving issue

While it's a fiscal-only session, legislators should think about efforts from past sessions that tried to reduce corporate welfare to the newspaper industry. The example of the Shreveport Times on this issue should remind again of the wastefulness and hypocrisy involved concerning it.

Although it should have seen this coming given controversy over accepting its higher bid in 2010 for fiscal year 2011, The Times got a bit of a rude shock two years ago when a couple of low-circulation weekly newspapers in Caddo Parish got the parish’s official journal business for 2012, worth tens of thousands of dollars of business annually, when they bid at 24 cents per agate line, 3 cents cheaper than The Times. That snub of the declining daily newspaper got repeated last year.

Then, this decision sent The Times into a bout of specious argumentation about how it was worth the extra money for being a daily paper with greater circulation, confusing the issue entirely in that it misunderstood the concept of an official journal was to provide access to government documents, not propagate them as widely as possible. It also, in a classic pot-meet-kettle moment, implicitly criticized the Parish Commission for using its power in a way it saw as an attempt to boost the small, locally-owned entities when it counted upon those same revenues to offset its steep recent decline in them and would have welcomed them for the identical reason of economic development.

Despite missed big chance, some LA tax reform possible

Contrary to what cinema might tell you, if you build it, they won’t necessarily come. Yesterday I laid out an uncomplicated plan to bring about beneficial tax reform that was politically possible. Today, at least one key legislator developed feet of clay and proclaimed that without legislator insistence he would not move bills towards this end, illustrating political possibility, strategic miscalculation, and the limits enforced by political culture.

House Ways and Means Chairman state Rep. Joel Robideaux made this announcement at its committee meeting that was supposed to vet most of the bills related to this. It’s a loss of nerve shared by others, and a missed opportunity by the state to improve the lot of its people.

It also means Gov. Bobby Jindal expended much to gain potentially little. The Jindal Administration did much spadework but misfired on one crucial element identified yesterday – simplicity – because of its own failure of nerve. The Administration from the start appeared extremely concerned to structure reform that did not make any lower income groups seem to pay more in taxes, thereby creating a complex system that achieved that end but obscured that because they made its administration more complicated.

Bills await providing politically possible, good tax reform

Gov. Bobby Jindal may not have gotten into public policy his version of tax reform, but he did make it into the one of the prime conversational items in this year’s session of the Louisiana Legislature. And now legislators seem cued to take it away in any of a number of directions, as they appear set to begin the discussion tomorrow. But which path would be the best?

With over two dozen proposals that do any or all of cutting of eliminating the corporate franchise tax, the corporate income tax, or the individual income tax, and raising the tobacco tax and the sales tax and/or extending its reach, and reducing tax exceptions, plus one renegade proposal to institute a statewide property tax dedicated to funding higher education, this menu demands sorting by best principles as revealed by research into economic behavior. And they are:

Tobacco tax hike to pay down misstated UAL might work

Proponents of increased tobacco taxes in Louisiana, don’t despair. There’s still a way to get this attempt at behavioral modification into law in a way reasonably related to the activity it regulates that will bring the state other benefits.

A part of the Gov. Bobby Jindal tax plan to shift taxation away from income and towards other kinds included a $1.05 per pack tax hike on cigarettes. But with his retreat from that specific proposal, it’s now in limbo. But a disturbing development in California can provide the vehicle to resurrect something like it.

Recently, a federal bankruptcy court ruled that Stockton could enter into the public sector version of that protection, where one of the major creditors of the city is the state’s public sector pension program. This precedent exposes pension funds to a novel kind of liability, as now the required payments from the city to the fund previously considered absolute and sacrosanct legally may not occur in their entirety or at all.

Radical doctrine behind "equal pay" deserves rejection

Like reoccurrences of venereal disease, each year for the past several the Louisiana Legislature has had inflicted upon it versions of bills called the Equal Pay for Women Act, the agendas of which is not what its sponsors claim and what agenda they claim addresses a nonexistent problem to the detriment of society.

The bills, duplicating the language of previous failed efforts, would define a prohibited employment practice for employers of four or more where pay differs on the basis of gender, and sets up a procedure receive damages if a violation is present. This year versions applying to the private sector are known as HB 453 by state Rep. Barbara Norton and SB 153 by state Sen. Edwin Murray clones Norton’s. SB 68 by state Sen. Karen Peterson does the same for state and local government employment. The important operative phrase in all three is this:

No employer may discriminate against an employee on the basis of sex by paying wages to an employee at a rate less than that of another employee for the same or substantially similar work on jobs in which their performance requires equal skill, effort, education, and responsibility and which are performed under similar working conditions including time worked in the position. (emphases added)

End, don't mend, wasteful solar installation tax breaks

With his concession/challenge yesterday abating his tax swap plan in favor of the Legislature's pursuit of something similar, Gov. Bobby Jindal gave clear advice on the direction to head to lower income tax rates if not abolish it: excise tax exemptions he said benefited "special interests." There are several cued up in the Legislature this session for abandonment, but one stands out.

While there are those that argue that Louisiana’s generous solar energy tax credits should be mended, Jindal would seem to think it needs to be ended now along with a few others. Of theseveral bills prefiled that address tax exceptions, around the theme of eliminating non-productive ones, some, like state Sen. Danny Martiny’s SB 231, stand alone in getting rid of this tax credit by 2020. Others, like state Rep. Roy Burrell’s HB 444, go after several of the most wasteful, and in a quicker fashion (end of 2015 in this case) if they cannot prove they are cost-effective.

Of which the solar one most definitively is not. Over the past four years, each year the state has lost on average more than $11 million per year, transferring this to the pockets of a few installers. That savings to households averages out, given statistics on meters installed as what these systems enable owners to do is to put in a meter that allows them to sell energy to providers at times of high generation by solar, to $230 a year per household, but works out to a transfer of $37,825 of business per household to installers.

Jindal tactically concedes to win strategic transformation

Gov. Bobby Jindal’s address to the start of the 2013 Regular Session of the Louisiana Legislature demonstrated he knows when to fold them and still come out a likely winner.

Quickly mentioning a few other past policy initiatives enacted connected to economic development, Jindal spent almost all his speech discussing the desirability of the elimination of income taxes as a means for continued success in this area. He then declared that he was pulling his tax swap plan, basically no income taxes in exchange for higher and expanded state sales taxes and some exceptions elimination, in favor of anything that would eliminate income taxes. The plan had come under fire from a number of quarters as its complexity served more to stoke fears than support.

Several bills already introduced would work to eliminate income taxation, although none immediately, while other look to get rid of exemptions, and one even wishes to institute a statewide property tax dedicated to higher education funding. Cleverly, Jindal now has removed his chin from leading this effort and has set himself up as arbiter with more input than anybody else in whatever product manifests. And in accepting this task, the Legislature leaves fewer resources available to pursue more mischievous ends according to Jindal, such as challenges to his budgeting.