Study confirms Medicaid expansion costs LA more

Earlier this week, Louisiana’s Department of Health and Hospitals issued an updated report concerning eligibility expansion under the Patient Protection and Affordable Care Act (“Obamacare”). Utilized changed standards over the past three years in the analysis, while more optimistic than the report issued then, it still points to the wisdom of rejection of expansion.

According to it, in the scenario most closely matching the existing policy environment, the state is expected to spend from $197 million to $367 million less over that decade. In another scenario, which depends upon a very unrealistic rise in provider rates of 90-100 percent, costs were $1.7 billion greater over the decade. However, importantly any “savings” realized occur only in the first six years of the continued reimbursement rate and from thereon out the state pays increasingly more.

Besides a few procedural rulings that have changed since the law’s passage and its imperfectly reasoned reaffirmation by the U.S. Supreme Court, the most prominent factor in adjusting the estimates ironically has been the state’s implementation of its Bayou Health plan, a premium support plan with a substantial managed capitation program for those currently eligible for Medicaid that saved the state about $136 million (about 10.88 cents per enrollee) in its initial year of operation. In essence, it has made it cheaper to enroll incremental members into Medicaid and without that, given the projected number of enrollees under expansion in the realistic scenario (577,000) compared to existing enrollments (1.25 million), another $63 million annually would be saved or almost twice the optimistic realistic scenario.

Report confirms swap's value, but it might need altering

The Gov. Bobby Jindal Administration was back in front of the most important legislative committee yesterday to the fate of the passage of its tax swap plan, energized by a new study that demonstrates the utility of the idea. But as the clock continues to tick to the start of the session, some major modifications may be in order despite the affirmation of the plan’s desirability.

The proposal features increasing sales taxes for existing businesses that must pay it by 1.88 percent, adding new businesses in the service sector paying 5.88 percent, eliminating half of mineral resources exemptions, increasing the cigarette tax, and eliminating all income taxes. The House Ways and Means Committee heard about how the plan would shift more taxation to business by an increase in the sales tax, theoretically by having to absorb some of it, and also would be hurt by depressed demand by passing some to taxpayers. However, with no income taxes paid by either businesses or consumers, individuals should pay an overall lower rate and the overall tax blow on businesses would be softened. In addition, individuals not now paying income taxes would receive rebates to make up for increased sales taxes presumably paid.

In short, the plan is designed to increase the overall burden on businesses, but individuals including business owners would have reduced tax burdens, while only mineral extractors and smokers definitely would see higher taxes. The benefit is this would create a more efficient fiscal structure that does a better job of collecting taxes and spurs economic growth better than the current system – in theory. That conclusion was verified by the report put out by Louisiana’s Pelican Institute of Public Policy and the Beacon Hill Institute of Suffolk University.

Pique, not good sense, behind electing superintendent

Why not? If you’re a Louisiana legislator and have a grudge, why not salve that bruised ego by trying to foist on the state a proven bad idea?

That appears to be the motivation and agenda by state Sen. Bob Kostelka with his introduction of SB 41 that would make the state superintendent of schools an elective position, as it had been prior to 1988. This would be in addition to the Board of Elementary and Secondary Education, which currently chooses this officer, eight of whose members are elected from single-member districts and another three appointed by the governor.

Kostelka has managed to get himself on the outs with the Gov. Bobby Jindal Administration, which has led to his demotion in the Senate’s power hierarchy such as being stripped of a committee chairmanship, by steadfastly refusing to go along with most of Jindal’s reform agenda. This includes in education, where Jindal and most of the elected members of BESE agree on policy.

Investigation excuse to get out of unfavorable contract?

The Gov. Bobby Jindal Administration better be pretty sure of its information by cancelling a state contract, or else what looks to be a tempest in a teapot might cost the state some real money. And if there are any political reasons behind it, they’re likely to disappoint equally Jindal-haters and those loving lurid stories of rampant government corruption.

Last week, the state took the unusual step of terminating this contract to process Medicaid claims, citing recently-revealed state and federal investigations into the process of how the contract was won. Controversy had followed the awarding of the contract, which had led to its appeal and a declaration by Atty. Gen. Buddy Caldwell’s office that it should not have been awarded to winner CNSI.

Several aspects initially raised cause for concern. Department of Health and Hospitals Secretary Bruce Greenstein years ago had worked for CNSI and in the initial phases of the process had made changes to the original contract parameters that would allow CNSI to qualify for bidding. He also met with former colleagues once prior to awarding. But no apparent impropriety was attached to this: Greenstein has no known current connection to the company, the reconfiguring of parameters opened eligibility to a number of firms, and other competing firms had no complaints about the restatement at the time.

Chicken hawks on the verge of becoming real budget hawks?

Perhaps a group of mostly Republican state representatives who style themselves as purists for sound state budgetary practices and results finally are evolving from a politicized, “chicken hawk” approach to a true “budget hawk” position that genuinely can improve Louisiana’s fiscal situation.

Formally organizing their enthusiasms as the Louisiana Budget Reform Coalition in the past few months, more than a year prior to that various group members have criticized some long-standing budgetary tactics employed in the executive budget and ratified by the Legislature. Drawing their special scorn has been the practice of using “one-time” money to provide some funding, generally in the range of 1-2 percent, of operating expenses. “One-time money” has come to mean a lot of things, but generally as used it includes funds from one-off transactions such as sale of government assets or a windfall of some kind and monies dedicated for a certain purpose that gets used for another courtesy of a supplemental appropriations bill called a “funds sweep.”

But their problem to date has been they have used the idea mostly as a political cudgel that sounds great and scores points for election purposes, but actually prevented any real progress in improving the state’s fiscal structure. Their great bane, one-time money, they declared a pox upon in advocating it never be used to fund operating expenses, but never seemed to grasp it was just a symptom of the real disease wherein lay the true cause of budgeting distress.

Colleges remain unserious about enacting needed change

While it’s an intriguing idea, Louisiana higher education’s attempt to free itself from legislative control of tuition seems neither legally valid nor addresses the fundamental problems ailing it and higher education in general.

According to the Board of Regents, members now doubt whether individual colleges raising tuition rates necessarily must go through the Legislature to do so, as it appears they would courtesy of a 1995 constitutional amendment (now Art. VII, Sec. 2.1) that reads “Any … increase in an existing fee or civil fine imposed or assessed by the state or any board, department, or agency of the state shall require the enactment of a law by a two-thirds vote of the elected members of each house of the legislature.” Enough doubt seemed to exist about whether tuition counted that a year later an attorney general’s (96-353) opinion needed issuing to confirm that, where it said that as the mission of higher education was to provide exactly that, a charge for anything directly related to that constituted a fee.

This upset in particular new Regent Edward Markle, who declared, “A fee is for a driver’s license or a speeding ticket. Tuition is something you pay for yourself voluntarily. It’s not a fee you pay the government; you pay it to educate yourself.” Such a statement makes one wonder whether Markle might be the best choice in a matter of legal representation if you want to win your case.

Greedy film crowd wishes to keep snouts in LA trough

Finally, it seems state officials have come to their senses about the massive transfer of taxpayer wealth from Louisiana citizens to a small coterie of professional makers of mainly schlock cinema. Which has those same bloodsuckers and star-struck political backers up in arms to try to derail efforts to bring sanity to the state’s motion picture tax credit program.

As part of his tax swap proposal, Gov. Bobby Jindal seeks to limit the usability of this device, which allows producers to take 30 percent or more of their costs and use them to decrease one-to-one Louisiana tax liability. This he hopes to accomplish by limiting the salary range to $1 million for a production.

Which, of course, would rule the high-priced talent needed to make such American Film Institute, Smithsonian-destined cinema masterpieces such as Drive Angry and Olympus Has Fallen impossible to qualify for much of their expenses. And has caused none other than the state’s highest-priced bellhop, Secretary of Economic Development Stephen Moret whose agency oversees then program, a past vigorous defender of it, suddenly to talk of altering the program to find efficiencies and better return on the dollar.

Compelling LA tax swap case at risk from demagoguery

It would be a major blunder by the Gov. Bobby Jindal Administration to let its tax swap plan falter because it allowed empty demagoguery to triumph over intellectually superior, economically beneficial, and individually empowering ideas.

Too often forgotten by conservatives, at least among those who aren’t populists, is that the increased intellectual demands underpinning their philosophy make cognitive demands on many unfamiliar with its study that causes what appears obvious to its articulators not to be understood fully by those receivers. (Conservatives of the populist kind, like liberals in general, base their belief more on emotion and faith with the consequent reduced ability to explain intellectually why they accept it as the superior understanding of why the world works as it does.) And it’s the practicality of translating abstract ideas into information for mass consumption that may make or break the plan.

In essence, the plan eliminates all state income taxes in favor of an increased sales tax on more items, provides income support for individuals making $20,000 or less in earning or those drawing retirement pay at $60,000 or less, eliminates some exceptions to the tax code while retaining those designed to shield basic necessities from sales taxes, and raises taxes dramatically on tobacco consumption. The state calculates the net impact to be a small gain to the lowest-income earners with higher gains for highest-income earners, while business may end up paying more but will be advantaged by lower administrative costs and an increased amount of revenue with more money in the mass public freed up to be spent.

LA Catholics should find beneficial continuity with Francis

As with his predecessor, the accession of Jorge Cardinal Bergoglio to the papacy as Francis should prove to benefit the Church in Louisiana.

In his nearly eight years, Benedict XVI brought needed stability to the Church increasingly under pressure that came from both within and without for it to become something that it wasn’t through demands to alter its core principles. At the same time, he also had to tackle the internal problem of escalating incidents and numbers (even if just a tiny fraction of the whole) of priests and religious committing sexual abuse, introduced when the Church let its guard down post-Vatican II, that was allowed to fester.

The response wasn’t altogether satisfactory because of the hidebound nature of bureaucracy, which the Vatican, like any large organization created by man, is not immune to suffering its implications. As an insider, Benedict had certain strengths to tackle the decay from within the church (where, unfortunately America has been a leader in this regard) that begins in the seminaries and extends from there, and correction should be on its way.

Good tax plan economically faces tough battle politically

While there are more hits with Gov. Bobby Jindal’s proposal to swap sales for income taxes, there are enough misses that could derail the change that needs a supermajority in the Louisiana Legislature.

The plan would eliminate all personal and corporate income taxes, plus the corporate franchise tax (in essence a licensing fee based upon corporate capital that is perhaps the most unfavorable of all the states that have one), in exchange for raising the state tax rate 1.88 percent and coverage of that to a host of previously-exempt services. However, several large exemptions will continue to exist against the entire state sales tax portion, principally concerning the acquisition of unprepared food, medicines, and utilities. Plus, any person whose income falls below $20,000 annually will be able to apply for a rebate of up to $300, and anyone drawing retirement payments such as Social Security can get a rebate tied to the first $60,000 of income (currently, recipients and state and local government retirees do not pay income taxes). Finally, it raises the tax on tobacco products, by $1.05 per pack of cigarettes.

Evaluated on economic terms, the plan has much going for it. Over the decades, research results continue to demonstrate that the most reliable path to increased societal wealth comes through systems relatively light on income taxes compared to sales taxes (nine states currently have no income taxes). Empirically, states with the lowest income taxes for decades have seen the most economic growth, while those with the lowest sales taxes have seen the least growth.