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Rebuilt Big Charity increasingly seems best option fo LA

It sounds like the state needs to start listening closely to those who favor rebuilding of the Medical Center of Louisiana – New Orleans (“Big Charity”) from its existing structure rather than embarking on a costly new structure that may not be cheaper for the same quality and whose new construction can disrupt historic neighborhoods.

Today at a legislative committee hearing questions were raised about whether the state should build an entirely new facility, which would raze 74 acres in Mid City New Orleans, instead of taking the existing Avery C. Alexander Memorial Hospital building that was severely damaged by Hurricane Katrina and rebuilding it. While damage was extensive, the only independent survey to date, authorized by the Legislature, shows as expensive as renovation is, at $550 million, still would be cheaper by $282 million over a total replacement – and that after the Gov. Bobby Jindal Administration ordered scaling back some of the grandiose ideas for it previous to his taking office. Additionally, they argue rebuilding would occur two years quicker than building anew.

The Louisiana State University system which runs the facility has ordered evaluations which it says – but will not publicly reveal the details of – shows it would be more expensive to renovate the existing facility. One selling point in its favor is that it could combine some functions with a U.S. Veterans Administration hospital to be built next to it. But even so, including extraneous items that he argues would be needed in a rebuilding, state facilities director Jerry Jones claims it would cost $70 million to rebuild than build new.


Some LA educators must put children, not selves, first

Sticking with the recent theme of economic development to mitigate outmigration from Louisiana, last week served up some perfect examples of attitudes in the area of education which explain why economic development has been so difficult to create in the state.

One set of events revolved around the delayed announcement by the state of what local schools would be taken over by it. The state would take eight Baton Rouge and two Shreveport schools under its wing. In every case, these schools had been scored as “academically unacceptable” for at least four years, and in each case not just majorities, but large majorities of their students were scoring in the bottom categories in tested subject areas. Overall, in almost every category at least two-fifths of East Baton Rouge students cannot perform up to the basic level of achievement, and for some grades and subject areas it is over three-fifths.

Yet concerning the East Baton Rouge Parish School System, not only did its School Board fight the possibility of 12 schools taken from their control, rallying interest groups and religious groups to back it, but when the eight were designated to be removed talk from it turned to lawsuits to prevent the perfectly legal transfer. One must wonder why such desperation exists to keep these schools governed locally.


Cut red tape, forgo economic bribery to prevent outmigration

Yesterday I mentioned ways that Louisiana could accomplish a pro-growth agenda to jolt the state out of its downward quality-of-life trajectory. Recent comments illustrate perfectly one aspect of necessary reform in this regard.

Louisiana Association of Business and Industry President Dan Juneau gave some examples of tax cuts which helped business in the state, removing nonsensical taxes unique to the state. But perhaps more importantly, in this interview he gave examples of procedural reforms that could be made that would ease obstacles on business.

Tax cuts get the publicity, but making these kinds of changes could go further to promote a climate in the state that encourages wealth creation. In fact, Gov. Bobby Jindal first gained political prominence as a technocrat in government who found ways to make government work smarter, so he ought to be the ideal person to lead the charge to get government out of the way of business by eliminating unnecessarily complicated structures in areas such as tax collection.

At the same time, Jindal has to resist the ideology disseminated by his Secretary of Economic Development Stephen Moret that somehow the state can do a better job of directing investment. As one major interest group that advocates in the area of tax policy states in reference to the idea of targeted tax breaks, “Lawmakers create these deals under the banner of job creation and economic development, but the truth is that if a state needs to offer such packages, it is most likely covering for a woeful business tax climate,”

It cannot be stated too often that in order to make people love their country, i.e. not want to leave, their country must be lovely. That happens by sweeping away bothersome government regulation that hampers business efficiency and taxes that suck the life out of commerce. This means in the near future that Jindal, if unable to offer more tax breaks because of ailing government finances, must back legislation to cut red tape and give up on this notion that monies must be set aside to bribe business into locating in Louisiana.

If some prospects come through, Moret wants to replenish a fund that has over $400 million designed to attract big employers. Money of that magnitude if talking economic development would be more wisely spent on tax relief, and cutting regulations won’t cost a cent. These are what need to be concentrated on in the 2009 legislative session, while the fund should be allowed to be drained away if it at all succeeds. If Jindal takes this course of action, it will show he truly understands how to solve the state’s outmigration problem.


Jindal correct to reject mistaken tax hike emulation

Perhaps the way to summarize the effect of the separate problems Louisiana faces in creating economic growth is it has an outmigration problem – more people leave the state and enter, and it’s getting to the point that the excess of births over deaths won’t be able to compensate. But maybe the state will get lucky because fiscal policy of many other states may give Louisiana a boost, if Gov. Bobby Jindal sticks to his guns.

Jindal has said he will not consider any tax increases of any kind to work the state’s way through an impending budget crisis, preferring smarter use of funds and cutting functions. However, some other states are raising taxes, mostly on consumption of certain good deemed to impart something deleterious, hence the name “sin taxes.”

There is some stupidity out there on this issue that actually argues personal income or consumption taxes on the wealthy should be raised, the rationale being that the really rich have so much money they’ll never miss it and it might actually be good for them to have a more “realistic” understanding of a good’s true value. This is not the space to analyze the intellectual confusion of this view (an excellent job is done here) but it suffices to say that the historical empirical evidence exactly contradicts this view, as cuts in tax rates particularly among the wealthiest bring the strongest economic growth because their resources get deployed in the most efficient fashion through investment, as opposed to government spending it in a much more inefficient manner for purposes that fail to contribute to society.

Republican Jindal seems to understand the obvious, that if a choice has to be made, it’s a pretty safe bet that there are low-priority, essentially unneeded things being done in government that can be excised rather than government sucking a greater proportion of society’s resources out of the economy into its own maw which, in the long run, will only serve to depress the economy even further. That other states (notably, almost exclusively those with Democrat majorities in their state governments) that don’t have the wisdom to understand this simple truism are willing to do the opposite are going to hand Louisiana a competitive advantage over the next few years.

As Jindal’s Secretary of Economic Development Stephen Moret has noted, Louisiana suffers from having low growth in economic areas where it could have a competitive advantage. Yet the solution is not, as he intimates, some kind of government policy targeting assistance to these sectors because that reflects the same folly of belief that government somehow knows better than the market where to commit resources. Instead, it is policy that reduces generally tax and regulatory burdens, a direction into which Jindal has made small steps and perhaps, at least on the regulation-reduction side, will make more soon.

Tax reduction may be suspended for a short while given other reformist goals of Jindal’s such as in health care and from receding economic tides, but a relative reduction may come if other states and the federal government make the mistake of raising taxes. This will make Louisiana more attractive precisely to those groups Moret frets about being in short supply in the state going forward, the younger and more educated/motivated. Jindal is smart to continue resisting the ignorant suggestion of the chattering classes to follow the course of these other states.


Parish must emulate Bossier City on fiscal rectitude

Gov. Bobby Jindal’s aggressive approach to reducing state taxpayer handouts to nongovernmental organizations and local governments largely was well received by the public earlier this year. One northwest Louisiana government seems to have learned from this, while another apparently has not.

Last year, the Bossier City Council wisely did not act on a request by the Ark-La-Tex Mardi Gras Museum which is located in the city, to subsidize it to the tune of $25,000, approximating its current revenues. (This is regardless of the fact that, given the stipulations the city placed upon krewes several years ago, Carnival krewes no longer parade in the city.) Its executive director held out the museum as a great educational opportunity, and asserted that with its disappearance of public grants that its donors and admission fees collected from roughly 5,000 annual attendees could not keep open its doors much longer.

One must admire the audacity of the request while being repelled with its inanity. Are there not other grants out there to be had, and, if not, don’t their absence or rejection of applications from the group tell us just how valued of an enterprise organized philanthropy thinks this is? And if the museum is so important to the concept of Carnival around these parts, why don’t the krewe members themselves come to the rescue? With several hundred of them parading in any given year, each could carve $50 out of their throw, costume, ball, and/or libations budget to donate to the museum which would more than make up the deficit.