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Odom, Foti derive new ways for state to waste money

As if Louisiana’s governments, certainly state and many local, waste enough money through inefficiency and ill-advised priorities, now potentially more can be wasted through taking on – with little oversight – riskier investments. Both a “low-tech” and “high-tech” version made news recently.

The “low-tech” version involved an old-fashioned loan guarantee made by a state agency, the State Market Commission, controlled by Agriculture Secretary Bob Odom, to help private interests buy the Lacassine sugar mill. The facility, recently completed costing the state $45 million despite financial projections showing it to be dubious, is supposed to be bought from the state for $45-60 million (the actual price depending upon what Odom feels like telling people at any given moment) by something (the actual buyer depending upon what Odom feels like telling people at any given moment) between now and who knows when (the date depending upon what Odom feels like telling people at any given moment).

But it turns out that a group who may be the buyer has gotten a loan guarantee of $7 million from the Commission. This means if it defaults on that loan, which goes towards making the mill operational (the actual date of operation depending upon what Odom feels like telling people at any given moment), the state is on the hook for it. And given the projections, default would not be surprising.


Blanco creates another impediment to recovery

The lesson for today: if Gov. Kathleen Blanco and a handful of state legislators can’t produce legislation to give the shaft to Louisiana taxpayers, there are other ways for them to confiscate the people’s money.

The example here is the decision by the State Civil Service Commission to raise the minimum wage paid to state employees by a buck an hour, even as legislation to do so failed in the past legislative session, and despite the well-known reasons why any hike in a minimum wage, or even the very existence of it, is a bad thing for the entire economy. Incredibly, even so the decision was unanimous.

You might think the members would know better (especially this one). But, then again, they were put there by Blanco (from a list of three nominees by each private university leader in the state), so they pretty much have to vote the way she tells them if they wish to remain. The only exception is the state employee electee, who houses prisoners for a living.


Veto session attempt primarily about political futures

It’s been a long time since there’s been a veto session of the Louisiana Legislature, because so seldom do legislators want to challenge the governor. That state Rep. Billy Montgomery has started an effort to do so tells us about his and Gov. Kathleen Blanco’s political futures.

The last governor to have bills vetoed was Buddy Roemer. It was no accident that a year later Roemer found he could not even make the general election runoff for a second term against a pair of future convicts. Only a weak governor would have a veto sprung against her, but it’s not a good sign for Blanco’s future prospects to even have it being actively considered.

No doubt Montgomery sincerely believes in the merit of the bill the veto of which he wants overridden – as well he should, for HB 699 was a bill that never should have been vetoed. Its compelling argument that consumers will benefit from lower cable rates overwhelms the weak facts and twisted logic of the special interests that opposed it, local government and cable television companies. But that may not be even the primary reason Montgomery is kicking up a fuss.

Term-limited in the House, Montgomery has eyes on the Senate District 37 seat, perhaps the most conservative in the state which therefore gives Montgomery a thin record for it. Traditionally one of the more populist, liberal members of the House, this year Montgomery compiled a more reformist, conservative voting record, and HB 699 was a big part of it. Shepherding the bill through wins him some credit, but a final victory or at least the effort to reach it would be even better.

Since Montgomery has so little to hang his hat on in terms of conservative/reformist credentials, the more he can milk HB 699, the better his chances of winning in 2007. Even if Montgomery could rally a majority in both houses to call the session, with just one vote to spare in both the House and Senate and a number of previous bill supporters probably skittish that an affirmative override vote on their part would lead to Blanco avenging herself on their capital outlay requests next spring, the odds for a successful override aren’t good.

Still, Montgomery must figure the publicity can only do him electoral good, and he is doing the right thing. But, to properly understand the motivations here, were Montgomery a genuine conservative/reformer and/or he was not running for that open seat, it’s very doubtful he would have gone to these lengths. It’s nice to have a leopard working for you, but they don’t change their spots overnight.


Public needs to watch Regents matters closely

If I had little experience with working in government, in higher education, in Louisiana, I likely would shrug off reports that power plays are going on at the state’s Board of Regents, of these fantastic scenarios that certain people are trying to be put into positions of power, that the governor’s husband was trying to rearrange the higher education system, that political agendas come first. But ….

Most people go through their lives with only minimal daily contact with government (which unfortunately often becomes reflected in a lack of interest or knowledge about government and political issues of the day). They’re engaged enough interacting with free markets, raising families, or pursuing other ends to make it difficult to fully understand that (1) daily happenings in government agencies have only a tenuous connection with the real world, (2) daily happenings in academia have almost no connection with the real world, and (3) both of these conditions are compounded in extremity by a hyper-politicized political environment built so much on personalized power bases such as in Louisiana.

I’m embarking on 20 years teaching in higher education, with all but four of those years in Louisiana institutions, most of those at my present location. But I also have the benefit of an M.B.A. and a short tenure managing in the banking industry, and I can tell you that the decisions made in the latter, private sector area are much more rationally related to reality (because of the imperative that the free market distributes resources in proportion to agents’ contributions to society) than in the former, which features government-run institutions heavily dependent upon tax dollars (directly or subsidized) where it is political power, not merit, that determines the distribution of resources. I could, but won’t, give a number of examples of this personally known by me just from my own institution, and others at which I’ve taught.

So when in Louisiana you have state senators and former regents complaining about political agendas to ditch certain people and to bring in others, and to reorganize the entire structure of higher education apparently to favor a certain interest led by the governor’s husband, as far-fetched as all of this sounds, not only is it believable, it might even be true. That by itself doesn’t mean the personnel changes or potential reorganization would not be positive. But it would be reprehensible if the reason for such changes was not after careful study of all available facts and options, but because of politics.

This is why the search for a new chancellor for the Louisiana State University System, new appointees to the Board of Regents, and any alterations to the organization of higher education in the state that may result must be scrutinized very carefully by those connected to higher education, legislators, and the citizenry. Even that may not be enough to prevent politics – even with procedures to maximize impartiality I’ve seen rigged search committees/pre-determined hiring decisions, “studies” that blatantly push one side of an argument, and Gov. Kathleen Blanco can stick whomever she wants on the Board of Regents where they have the power to do whatever they want (short of legislative intervention).

Not reelecting Blanco would nip in the bud the possibility of this specific issue becoming a problem, but the general conditions remain regardless. Only a vigilant public can control for that. So, even if living in the real world takes up so much time and effort, keeping up with what goes on in the unreal world of Louisiana higher education is something all citizens need to do to make it work the best that it can.

(P.S. Note disclaimer in small type below for those of you who are unable to understand the obvious.)