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Jindal funds plan sharpens potential tax cut showdown

Strangely, Gov. Bobby Jindal continues to paint himself in a corner as he announced his plans for a presumed revenue excess to be declared on Friday by the state’s Revenue Estimating Conference.

It is anticipated at that time that the Conference will declare excess funds over its prior forecast for this budget year, and also some for next budget year. That means additional monies other than what has been budgeted for this year could be spent this year on recurring programs, and the revenue base for next year’s budget has gone up which may close a predicted deficit at current spending levels.

Jindal wants the Legislature to lay off spending this year’s excess funds. If that happens, that means after July 1 they only could be spent on non-recurring items defined as five different kinds of purposes (probably soon to be six, courtesy of a bill to allow tax rebates to be given out of these funds). He also wants next year’s funds to be treated the same way by an accounting move. In other words, in essence he does not want any of these funds spent on recurring items.

This would put him on a collision course with SB 87, both its original and amended version. Author state Sen. Buddy Shaw intended the bill to provide a permanent tax cut by lowering rates on middle-class taxpayers. State Sen. Nick Gautreaux got it amended to provide a phaseout of all individual income taxes over a 10-year period, a tactic widely believed to be backed behind the scenes by Jindal to make the bill seem irresponsible enough to entice passage by making lawmakers seem willing to cut taxes, and then provide justification for Jindal to veto it. Regardless, both versions would reduce revenues about the same amount next year, around $300 million.

Jindal’s plan would forgo using excess funds to cover that amount. He has said he would support the original version if other cuts could be made elsewhere – and a tempting target to slice is a $307.1 million addition to a “megafund” to attract a large employer the expenditure of which would be a less efficient way to develop the economy than a permanent tax cut and anyway may never get used. The strategy here seems to be to keep the Gautreaux language on the bill as its overall revenue reduction is estimated at $4 billion over those years in order to save the megafund increase and keep revenues in place. In addition, the Jindal Administration defines those monies intended for the megafund as “one-time” and thus should be shuttled away from funds not collected on a recurring basis from a tax cut.

Or, as the presence of floor leaders at the news conference announcing this preference indicated, the strategy could be simply to kill off the bill. Whether any of this will work is another matter. The House, with its 60 of 104 new members many having articulated a desire to support legislation like Shaw had intended, may not let it come to that. They could call Jindal’s bluff and excise the megafund money. Or, even more intriguingly, they could amend the bill to cut income taxes by whatever amount gets declared as surplus and dare Jindal to veto a tax cut that is paid for by the numbers, knocking out the “irresponsibility” argument. Most likely, if they have smarts and muscle, they will tie the two together – force the original SB 87 through and cut the megafund increase in exchange for not putting Jindal in this political pickle.

(One additional strategy presents itself – if floor leaders and the Administration get wind that there may be rebellion in the ranks after the House Ways and Means Committee hears the bill today or perhaps if the vibes really are bad if it doesn’t by getting it deferred, one or more of them may refuse to declare a surplus. The Conference has as three of its four members House Speaker Jim Tucker and Senate President Joel Chaisson, and Jindal but more likely his designee Commissioner of Administration AngĂ©le Davis, . The declaration must be unanimous. Without a declaration, the money doesn’t exist and in effect that would accomplish the rollover of this year’s funds to next as envisioned by Jindal. The news conference also appears to dispell rumors that Jindal might actually sign SB 87 in its current form.)

The intrigue increases but one thing seems sure: Jindal does not appear to believe the revenue enhancements that will come down the road from tax cuts that stimulate the economy are worth the short-term subtracted revenue. This belief must be ironclad for him to put up with the political pressure for tax cuts, and makes one wonder whether he really believes tax cuts inherently are salutary in the first place.


Press complaints of bills more about money than principle

One thing that always has fascinated me, both when I worked in the industry and now observing it but interacting with it on occasion, is the self-righteousness of the media which often is used as a cover for baser motives. At other intervals I’ve discussed how some in the media see themselves as gifts to society whose efforts they feel are indispensable, if not irreplaceable safeguards to preventing tyranny by challenging the orthodoxy that may emanate from government – all the while promoting their own kind of orthodoxy even as they claim they are “objective.”

But besides plumping for a particular worldview, there is even a greater motivator explaining why the media does what it does – money. As I remind my students at the very beginning of sections in my courses that cover the media, the business of the media is not to watch over government, or to empower “neglected” sectors of society, or to do anything else, other than just plain making money. And we have some fine examples of this masquerade of their motives in discussions about changing the scope and methods of official journals for state and local governments in Louisiana.

HB 431 and HB 446 by state Rep. Hunter Greene would move the requirement that the official acts of the state be printed in a newspaper, the only difference between the two being the latter makes this a matter of law and the former enshrines it in the Constitution. HB 971 by Rep. Dee Richard would do the same legally for local governments. Predictably, there have been howls from the press about these – but never revealing their true source of distress, the loss of revenues for their industry as it continues to decline.

It’s humorous to witness the contortions the press goes through trying to justify this corporate welfare the bills seek to end. One argument is that publishing in a source outside of government allows for greater confidence that what gets published is somehow not been “corrupted” in some sense by government. In other words, you should trust what appears in a newspaper, not what appear from government. OK, I’ll buy this – but only if these publishers of official records prove to me they have been checking what gets handed to them to publish. This argument is specious if all these publishers have been doing is taking what’s given to them and republishing it. How is that any different from it appearing on a government website? Or, how is that any different that what any enterprising citizen can do now, go to the Legislature’s web site and have full text versions available of all acts promulgated for each session, regular and special (for example)?

Another is that having web-only access is too limiting, because not enough people have or can afford Internet access. Again, only the lazy would accept this line of reasoning: newspapers cost money, too; in fact, in some places a month’s subscription is more expensive than a monthly bill for Internet access. Of course, if you can’t pay for either or get either, a trip to the library can get you both – and actually, more locations probably have free Internet access than they do papers that are official journals. So if access ends up being no worse than equal, why duplicate services tolerating a far more expensive publishing component?

And one hears dead silence from the press on the issue of how this patronage by government to a publisher may influence what is published. Especially in some rural areas where the revenues from publishing an official journal as an overall part of an enterprise may be significant, those governments who have a choice of publishers can put pressure on these outlets to cover news a certain way by threatening to yank their contract. (I have witnessed a parish government do precisely this.) Responsible publishers realize these kinds of laws can protect the media from undue pressures.

However, I’m willing to give these guardians of democracy and champions of transparency the benefit of the doubt. If they really believe in what they preach, how about this compromise: governments would designate an official journal, but pay only for it to be online and open the bidding to everybody? For example, the $200,000 subsidy the state gives the Baton Rouge Advocate for taking computer files, formatting them on some virtual pages, and then putting them to ink on paper, might only cost $20,000 a year (if even close to that) in the form of an online archive (although essentially the state already does this). Of course, whereas in Baton Rouge only a handful of publishers have the capacity to do this, dozens, even hundreds of websites could compete for the business (and in rural areas, there often is only one publisher available).

If those in the press bleating about ideals of good government and democracy against these bills (although HB 431 is not deserving of passage because this kind of policy is not important enough to be a constitutional matter) are serious, they will support compromise language to HB 446 and HB 971 that allows publication electronically outside of government which likely will bring in far fewer revenues for them if not outright loss of this business to other outlets. Otherwise, we see them for what they really are – cloaking base motives in lofty language, more interested in fleecing the taxpayer than fulfilling higher goals, and therefore their complaints need not be taken seriously.


Blacks gave seat to, can take it away from, Cazayoux

As election returns rolled in last Saturday, the good news for U.S. Rep.-elect Democrat Don Cazayoux was he got elected. The bad news was, the same returns showed how difficult it will be for him to get a full term in November.

There are three groups he needed especially to thank for this good fortune. Two were the campaign of his Republican opponent Louis “Woody” Jenkins and the National Republican Congressional Committee who independently yet equally as stupidly promoted Jenkins with personality-driven, rather than issue-driven, efforts. Cazayoux’s state House record firmly tags him as a liberal Democrat yet, except for a half-hearted effort on health care, none of this was raised during the campaign.

And the health care issue was brought up in the context of the overall, failed strategy of linking Cazayoux to national liberal Democrats. The problem was, the organizations needed to reinforce their inference; i.e. because Cazayoux calls himself a Democrat and is occasionally seen with national Democrats who are liberal and therefore out of touch with Louisianans’ desires and best interests, unless provided with some kind of proof that he shared their same issue preferences – and his voting record gave plenty of examples – many prospective voters either would not make the connection or would not be convinced of it, especially since Cazayoux went around portraying a misleading picture of himself by stressing the few issues on which is actually is in tune with his new district. With his constantly bleating “I'm a pro-life, a pro-Second Amendment, pro-family” candidate, Jenkins and House Republicans allowed him to define himself unchallenged.

As a result, any decent Republican (other than Jenkins) challenging Cazayoux in the fall has a better-than-even chance of defeating him as long as they exploit his weakness on most issues. This point is reinforced by the behavior of the group to whom Cazayoux really owes thanks – black voters.

An analysis of 35 Baton Rouge precincts of 98 percent or more black voters shows they voted at disproportionately higher rates in the general election than in the primary runoff where Cazayoux defeated fellow state Rep. Michael Jackson. Turnout in the general election was almost 50 percent higher overall; that is, Cazayoux’s number of votes received in the general election were about half-again the total he and Jackson got in the runoff. But among these precincts, 80 percent of those had higher turnouts than 50 percent and several more than doubled in turnout general election to runoff. Therefore, for the runoff relatively lower black turnout benefited Cazayoux, and in the general election relatively higher black turnout did the same. In that sense, he lucked out.

Using this convention again, the good news for white Cazayoux was that black Jackson’s call for a boycott of Cazayoux was trumped in part by former elected official and Baton Rouge black political broker Cleo Fields who blessed Cazayoux on a ballot he passed out, and blacks provided the backbone of his triumph. The bad news was Cazayoux owes this election to black voters who very easily can be taken away from him in the fall.

Jackson has said he will run then as an independent, skipping a Democrat primary where national Democrats supported Cazayoux, especially if black Sen. Barack Obama gets the Democrat presidential nomination. This puts Cazayoux between a rock and a hard place: if Obama wins and Jackson follows through, Cazayoux is a sure loser. But if Sen. Hillary Clinton wins the nomination instead and Jackson feels like he cannot win without Obama heading the ticket because many black voters will be disengaged out of disappointment and disgust, Cazayoux loses many of them, too – not because they’ll vote for the GOP candidate, but because they won’t vote at all, and the lesson of the special election is that, against the candidate he matched up best with, even then he needed exaggerated black turnout to win. And a better quality Republican opponent makes his position even worse.

Deluded Democrats will read far too much optimism into this election, but Cazayoux and national Democrats are politically aware enough that know they have a problem. Dealing with a quality Republican and Jackson (and by extension, Fields) will be daunting, and those who argue Cazayoux’s chances are difficult to get a full term assess the situation correctly.


Lawmakers prefer protecting govt than improving schools

Starkly revealed during the debate over Gov. Bobby Jindal’s pilot program to improve schools was the main reason why, despite being a pioneer in school accountability measures over a decade ago, Louisiana students and thus schools remain firmly near the bottom of performance indicators.

Jindal has proposed using $10 million to provide scholarships for Orleans Parish students who recipients could attend a private school as a result. This money is in addition to any funds the Orleans Parish public schools would receive under the state’s method of financing school districts, the Minimum Foundation Program – although that pot of money is much lower than historic norms for the district because most Orleans schools, for reasons of abysmal performance and/or disruptions from natural disasters, have been removed from local jurisdiction and are run separately either indirectly as charter schools or directly by the state itself in its Recovery School District.

But Sen. Yvonne Dorsey got testy when she objected to the Jindal Administration calling the money set aside as independent of the MFP. In committee hearings she pointed out that one component of the MFP funding formula was based upon a per-pupil measure. Therefore, if the new program enticed students out of the Orleans system, the following year funds to Orleans schools would be reduced proportionately. Thus, she called the idea that the program would not take money from the MFP disingenuous and tried to argue it would harm public education on that basis.

Of course, it really is Dorsey and those who think like her who are being disingenuous on this issue because they are trying to change the terms of debate. Dorsey, it appears, is more interested in making sure a failing educational unit gets money for students it wouldn’t be teaching than to improve the lot of students. If she really cared about education, she would want to allocate money on the basis of how best it will serve the students, not on how it will affect a government agency.

And this illustrates all too well the sad state of Louisiana education: too many politicians prefer to focus on how to protect public education institutions and their employees rather than improve elementary and secondary education as a whole. It’s why the greatest impediment to improving education in the state, individual teacher accountability measures including assessment of knowledge, not only remains unimplemented, but undebated. It’s why solutions that would improve education as a whole, if they do not use the existing institutions, are derided by out-of-touch lawmakers.

As the process unfolds, we’ll see how this measure does. With an influx of new legislators this term, there’s hope they’ll think beyond the old attitudes that have kept education in this state inferior and support this very modest policy change which will improve public schools anyway through competition.