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Another chance, another disappointment for Louisiana?

Budgetary estimates continue to trend in positive directions, meaning Louisiana has yet another lucky chance to make up for prior mistakes in its fiscal management. But because those who have made those mistakes continue to hold power in the state and given the timing, whether this actually happens remains questionable.

Early indications predict a budgetary surplus of around a half billion dollars. Despite the 2005 hurricane disasters, Louisiana has gotten lucky because the price of oil has remained high and construction workers (among others) have taken a disproportionate part of their share of federal rebuilding dollars and gambled it away (which I guess why many are construction workers). The state takes a cut of both, and added to all of the temporary recovery funding flowing in, has created this desirable situation.

The problem is, the state has been down this road before with its Democrat Gov. Kathleen Blanco and Democrat-controlled Legislature. After the disasters when prudence dictated cuts, they responded but missed the opportunity to cut permanently the truly unnecessary, low-priority and/or inefficiently done items, settling on blanket cuts (as well as using chicanery in computing what could be spent). Then much of that got restored instead of allocating it to reduce long-term, growing, unresolved and underappreciated problem areas such as underfunded pension plans and road needs.

Unfortunately, the Blanco administration talked about but didn’t deliver optimal use of “extra” funds. The Legislature was little better: it brushed aside efforts to tackle the $12 billion-plus pension deficit, didn’t do anything out of the ordinary to reduce the road backlog, and was unable to use some of the money to offset insurance hikes that every citizen, directly or indirectly, will have to pay as a result of the disasters. The same forces that caused no positive change continue in power into 2007.

Worse, that is an election year. Blanco well may succumb to her liberal instincts and spend money blindly to pay off constituencies that will get her votes but to the detriment of the entire state. With Public Service Commissioner Foster Campbell almost sure to enter the race against her thus pressuring her from the left, the temptation will be greater to for her to co-opt that agenda and thereby behave irresponsibly. Democrats in the Legislature, whether running for their same jobs or others in the other chamber, likely will do the same.

The refrain is old: Louisiana looks to have yet another chance to progress and start pulling itself out of the last-place ranking morass its liberal/populist history has produced. Let’s hope the usual result, missing that chance, won’t happen again.


Faulty ruling requires LA Supreme Court intervention

Faulty jurisprudence has kept Joe Shyne’s Shreveport City Council campaign alive for the moment, but it appears likely that the Louisiana Supreme Court will have to take up this matter to resolve it fully.

Reversing the lower court decision by Judge Jeanette Garrett, the Louisiana Second Circuit Court of Appeals ruled that a pardon issued by former Gov. Mike Foster, which restored all rights except gun ownership to Shyne after his conviction on federal corruption charges, did in fact apply to a federal crime and thereby got around Art. I Sec. 10 of the Louisiana Constitution’s prohibition against convicted felons running for office until after 15 years have passed since sentence completed. Since Shyne’s sentence ran out (including probation) in 1998, he otherwise is ineligible to run for office.

But in a decision that has the hallmarks of washing, wringing, folding, spindling, and mutilating the Constitution to achieve a desired effect, the Court argued that the literal wording of the relevant section, an amendment added in 1998, didn’t actual mean what it says:


State, local politicians helped cause, made worse disaster

Hurricane Katrina roared ashore a year ago, landing but a glancing blow on the New Orleans metropolitan area, but that was enough to overtop and to cave in levees, flooding 80 percent of the city (and practically all of St. Bernard Parish). And what have we learned in this past year about who or what was most responsible for the destruction visited and lives lost, and how to move forward? In order of culpability:

#1: Inseparably, the U.S. Army Corps of Engineers and the Orleans Levee District. The ACE did as well as could be expected in the implementation phase, with whatever shortcomings appearing there because of difficult circumstances to foresee (for example, designs and technology from a half century ago being made to work in the present). But it fell down dramatically in the supervisory phase, letting flaws creep in, allowing some contractors to do substandard work and not keeping a close eye on the OLD which paid scant attention to flood protection. In recent years, the OLD has been more interested in building marinas and bringing in gambling facilities while reducing levee responsibility to ridiculous drive-by inspections that smacked more of an excuse to entertain than perform any serious maintenance. Had the ACE kept a tight watch on contractors and a secure leash on the OLD, or the OLD had actually done what it should have, the breaches and overtopping may not have happened at all.

#2: Gov. Kathleen Blanco and her predecessors. Among other things, Blanco delayed federal troop assistance out of fear she would not receive proper political credit, remained paralyzed in leadership in the first couple of days of the tragedy, and even could not perform the proper procedures as governor to facilitate the recovery effort – even though only a year earlier an exercise was run simulating such a catastrophe and real-life Hurricane Ivan had presented the same threat. Since then, she has been incredibly slow to respond (Mississippi, by contrast, had its basic procedures by the beginning of October, before Blanco even had put together a group to coordinate any recovery effort), in part because of her lack of awareness and of her desire to put political expediency ahead of practical effect. Blanco bears some of the blame for the OLD’s underperformance, since she appoints some of its members, as did her predecessors.

Hightower fails to meet needs, creates more burdens

All the Bob Odom-built sugar mills in Louisiana cannot produce enough of the white sweetener to sugarcoat the colossal drain on the city of Shreveport caused by its new convention center and, worse, soon-to-be-opened publicly-owned hotel.

Mayor Keith Hightower, whose political fortunes will be tied with his bringing the center about to fruition and any appearance of success of it, along with the city-paid managers of it, have done their best to spin some favorable news out of it by announcing it had exceeded initial expectations in a number of categories. Of course, they neglected to mention a couple of things, one being that it takes years to judge the performance of such a structure, so any conclusions rendered now mean nothing.

The other they downplayed is far more troubling: will the revenue, both direct and indirect, the facility is anticipated to bring in pay for the operating costs? The managers answered that concerning direct revenues: no, not ever. They predict the best case scenario of losing only $900,000 annually (so far it’s twice that), but then city officials incredibly optimistically argue that the remainder will be made up by the hotel and money pumped into the local economy by out-of-town visitors.

Oh, really? Leaving aside for the moment that the hotel is predicted to lose even more money than the center, let’s just investigate this claim that sales and occupancy taxes will make up the difference. To begin, assume the loss per year is only $980,000 (a figure this low essentially sneered at by perhaps the most preeminent researcher in this area, the Heritage Foundation’s Ron Utt, who thinks the loss will be much higher in the face of declining convention demand and increasing supply). Let’s also assume that for every dollar spent that otherwise would not have been spent on Shreveport hotels and restaurants as a result of the center, the city sees 7 percent of that.

Doing the math, it shows that convention attendees and exhibitors would have to spend $14 million a year. Assuming the typical person in these categories spends $350 in Shreveport for their trip. This means the center would have to books events that total per years 40,000 people visiting Shreveport, or about an 800-(non-local-)person convention a week! Also keep in mind that the vast majority of events, as admitted by the managers, so far booked are local in nature. Even if it can achieve half of this level, that’s still a $490,000 loss a year.

But the news gets much worse. When all is said and done, including the interest paid on the bonds to build it, the city will have forked over in the neighborhood of $200 million for the center. That’s $1,000 for every resident in Shreveport at current population levels, for the privilege of something that will lose them about another half million dollars a year. And just how many police officers could the city hire at half a million a year to keep city councilmen from being shot at and small businessmen from being murdered?

And again, there’s the hotel to consider. The only independent study ever done to assess its profitability concluded it would lose hundreds of thousands of dollars a year. Throw in the roughly $75 million in principal and interest it will take to finance the hotel and with the center’s cost, just think how much of the infrastructure problems facing Shreveport, totaling in the hundreds of million of dollars, could have been solved in the near future. Instead, taxes and fees will go up to reverse the crumbling – one reason being the city’s bonding capacity has been stretched beyond recognition by these facilities.

The sheer folly of it all was stated no better than by Utt, whose remarks deserve to be quoted here in full: “What your folks are doing is deplorable. It's an awful waste of money. Are there no unmet needs in Shreveport? Of course not. If you want to benefit the city, you might want to think first about what are truly the public needs that only government can provide.”

As Hightower closes out his mayoral reign and after, look for him and his pals to try to distract the public as much as they can from these facts, that inescapably lead to the conclusion that Democrat Hightower – and a City Council Democrat majority – cared more about building monuments to themselves as part of an economic development strategy that preferred to boost egos and deliver business to cronies rather than to empower the peoples’ ability to grow the economy, through preserving the city’s assets and reducing the monetary burdens (taxes, fees, regulations, and the like) on the citizenry.


Blanco will continue to politicize disasters for campaign

Some observers have speculated that Gov. Kathleen Blanco has, in some way, deliberately delayed disbursements of recovery monies from the 2005 hurricane disasters in order to have them appear closer to next year’s election day to assist her reelection efforts. That explanation seems unlikely – Blanco has been the main reason why it has taken so long for these funds to get out but because it’s probably a function of her ineptitude and unshakeable faith in pursuing blank check, big government solutions controlled by her, which the federal government had to take time to moderate and to allow federalism to play out.

Still, in the upcoming 13 months one can expect Blanco to run a campaign having it both ways. On this issue, she will try to deflect the public’s attention away from her lack of leadership and ideology at cross-interests with Louisiana’s majority by blaming the federal government (or New Orleans’ which does deserve approbation but does not excuse Blanco for her mistakes) while at the same time publicizing heavily that she is (inaccurately) largely responsible for the money that does come dribbling out.

The fact that her main opponent is very likely to be Rep. Bobby Jindal makes even more expected this strategy. With no real positive record to run out, Blanco’s only chance of winning is to emphasize the redistribution aspect of her term, in the hopes that a majority of voters will feel that, in classic Louisiana style, that they have gotten enough goodies doled out to them, while simultaneously attacking Jindal by linking him to the mythology she and others have tried to create that the problems of preparation and response to the disasters were not primarily Louisiana’s and hers, but the federal government’s – and Jindal is part of that organization.

For his part, to counteract this, Jindal must point out how Blanco’s unsuitable actions caused needless harm, emphasizing how the federal government in general and he in particular, steadfastly corrected for Blanco’s dithering and excesses. He must know he cannot out-liberal Democrat a liberal Democrat on the check-cutting part, but must make clear his intervention was helpful in getting the ultimate solution in place, despite Blanco, in a way that provides good stewardship and wise use of taxpayers’ dollars.

Jindal can really negate this Blanco ploy should he be successful on a related issue, getting the federal government to bump up Louisiana’s offshore extraction royalties to levels commensurate with other coastal states to be used to combat coastal erosion. This he should contrast to Blanco’s flailing efforts entailing a wasteful, nuisance suit.

It’s unfortunate that the disaster issue took on political overtones, but from its first hours of it already Blanco was making decisions based upon political considerations. That genie has long left the bottle, and so Blanco’s opponents to win will have to accept that template and use it against her.