Search This Blog


Alario budget strategy making him conservatives' friend

Oddly, if not ironically, conservatives may end up having Sen. Pres. John Alario to thank for keeping the focus on right-sized, sensible government in Louisiana as the state grapples with a looming budget deficit for fiscal year 2016.

In days gone by, the Democrat-turned-Republican often fronted efforts to expand government spending with commensurate tax increases as part of that. Whether for convenience sake and/or genuine ideological change, as Louisiana began electing legislators more compatible with their own worldviews and that worldview itself began to deemphasize populism, Alario became more conservative/reformist in his voting habits (in this term, his Louisiana Legislature Log voting score has crept up over 60, right about at the GOP Senate average).

And now he is throwing cold water onto House efforts, backed by some of its majority Republicans and party leadership, to raise taxes, most of these for at least a few years, as a budgetary solution by expressing a preference that the Senate will seek temporary means by which to balance the budget – implying suspensions of existing tax breaks would comprise the bulk of any revenue enhancements. As Alario’s greatest skill is herding lawmakers in a particular direction, chances are good it is this way at this time the Senate will head and thereby pressure the House to do the same.


Higher education policy going badly wrong this session

While budgetary constraints present in this cycle could have pressured Louisiana to embark on a long overdue and needed reshaping of its delivery of higher education, if anything in regards to this area policy-makers are engaging in counterproductive backpedaling.

The state’s inefficient system has three issues that prevents it from improving both its quality and efficiency, all interrelated. First, it is overbuilt, ranking 18th in per capita spending on higher education as a consequence of too many institutions chasing too few students, particularly when it comes to baccalaureate-and-above schools. Second, its funding is imbalanced, where taxpayers subsidize disproportionately compared to other states its spending, while average tuition ranks (for study at senior institutions) only 40th among the states even as in per capita income ranks Louisiana 29th, meaning the ability to pay is there for families but its taxpayer spending on this is outsized. Third, it spends inefficiently within institutions, as evidenced by the fact that the baccalaureate-and-above institutions in the similar state of Oregon generate much more proportionally of their own resources with lower expenditures per capita, in part by having a much higher proportion of their students in junior institutions.

These realities mean the optimal reform course would seek to demote, merge, or close senior schools, to raise tuition levels, and to reshape incentives so as to prevent inefficient expenditures. Institutional realignment at the four-year-degree-and-above level can’t happen overnight, but at least the groundwork can begin this year. Tuition increases and shifting of incentives, however can commence to take effect in the next fiscal year that begins in less than two months. Yet with one exception, not only are legislators failing to do what’s best for higher education delivery specifically and the citizenry generally on that issue, but they actually are doing the opposite.


Caddo voters, commissioners continue wasting money

Seven-hundreths of a mill isn’t a lot, but it may have saved the taxpayers’ mother’s milk to the Biomedical Research Foundation of Northwest Louisiana from both voters and the Caddo Parish Commission. Which ensures nearly two more decades of waste of the people’s money.

Recently, voters in Caddo Parish took to the polls to decide whether to stamp approval on two property tax renewals. One was for 1.74 mills mostly for the BRF – actually slightly smaller than its reauthorization in 1997 and original amount in 1993 – to help fund its activities in attracting small technology-related startup firms, in providing venture capital, and in running its small medical operation that consists of overseeing facilities, medical grants, and a subsidiary with a Positron Emission Tomography scanner.

But less than two years ago, the BRF got into a whole bigger business – like a minnow swallowing a whale at a scale more than 50 times larger – when the state awarded it management responsibilities over two of its charity hospitals, in Shreveport and Monroe. The only operator of any state hospitals that had no prior experience doing so (technically through a subsidiary), it has come under criticism for what state officials and auditors have described as a troubled transition period, with monetary disputes spilling into the open and intimations that an original considered partner with the state, Willis-Knighton Health System, should step in before the initial contract was up.


Like herpes, worse comparable worth bill returns

It’s not that bad bills make it into law in Louisiana – it happens far too often. It’s that you would not expect that a committee would pass one along unanimously after many almost-identical versions have been rejected in the past – some this session.

SB 219 by Sen. Edwin Murray tackles the fiction that, all things considered equal, women do not receive equal pay compared to men. Reams of academic studies have demonstrated when accounting for all conditions, such as differences in occupation choices, hours worked, educational attainment, taken time off, reliability, and seniority between sexes, any difference in pay statistically goes to zero, or even favors women in certain cases. That makes perfect sense: there are few hardcore sexists out there in the business world who would not want to maximize profits by getting the best workers for their value, and that means ignoring sex as well as a host of other factors when these have nothing to do with the job at hand.

Proponents of this legislation, ultimately designed to extend government control over business with this goal obscured by presentation of a solution to a nonexistent problem, understand that and over the years have adopted a number of strategies to try to work around this fact. The tried-and-true tactic is to introduce the concept of “comparable worth” into such legislation, revealed upon seeing phrases such as “all employees shall be compensated equally for work that is the same or comparable in kind and quality” [emphasis added]. In other words, rather than let the market decide valuation of activities, some artificial construct makes that determination; for example, something is deemed wrong if nurses, a field primarily staffed by women, with bachelors’ degrees make less money than computer technicians, who primarily are men, with associates’ degrees, as a science degree like nursing should produce more “valuable” work. Et voilĂ , to explain the difference it must be sexual “discrimination” at work.


Unnecessary tax increases could haunt propagators

If Louisiana’s disease was a budget imbalance, it’s hard to see where the alleged cure of tax increases was not worse. Which may require another round of treatment that the authors of this previous round may find hazardous to their political health.

Last week, the state’s House of Representatives dug into the flesh of taxpayers of all kinds, with uncoordinated measures bordering on the irrational, in proposing tax hikes of $677 million – and left wishing they could have done more. A critical mass of the majority Republicans had to join almost all Democrats to pass these measures. At day’s end, chamber leaders declared they wished these proceeds to go entirely to fund higher education, essentially wiping out any reductions from this year’s baseline levels, perhaps as a ploy to pressure health care interests to lobby for additional increases to make up for a gap formed from a combination of not funding for next fiscal year previous improvements to charity hospital operations requested by their nongovernment managers, the opening of the new one of these in New Orleans, and to fund present and future pension payments for the previous state employees of the facilities prior to the state turning over management, of $200 million.

Few of the actions taken made any fiscal sense, these being passage of HB 218, which changes carrying periods for net operating losses by corporations that would reduce incentives to make decisions primarily for their tax implications; of HB 402, which increases taxation on income earned in other states, thereby encouraging making it in Louisiana; and of HB 549 (which actually is unlikely to contribute any additional revenues this year), which begins to reduce the horizontal drilling credit when oil reaches $70 a barrel, recognizing that at a certain point prices become high enough to need less in the way of incentive to perform expensive drilling. These aren’t perfect pieces of legislation in the larger scheme of balancing revenues and spending, but when considered in isolation at least they recognize that tax policy should steer behavior towards activities that increase economic output and therefore government tax take beyond the value of the break.