The Louisiana Family Forum has issued a report on the current fiscal situation in Louisiana. Authored by former Legislative Fiscal Officer Johnny Rombach, its enthusiasm sometimes gets in the way of its message, but regardless the latter is unmistakable: the state is headed towards a fiscal crisis, one potentially exacerbated by policy choices being made during this legislative session.
Rombach makes three points in particular. First, the proposed operating budget of the state creates commitments likely unsustainable in the long run. Essentially, the report argues that the injection of federal aid into the state as a result of the 2005 hurricane disasters has created what we social scientists call a “discontinuity” in the rate of growth of revenue-gathering by the state. It states that the budget was growing at a particular rate, but the presence of aid (here the report gets muddy because it identifies the “Stelly” tax swap – more about that is in the report – and higher oil prices also as contributory factors) manufactured a temporary increase in the rate.
According to the report, the problem will come because recurring spending commitments track that bump up and state government assumes the revenue “bump” will continue to be reflected in revenue-gathering even if the rate of growth goes back to its pre-disaster level. In other words, in their spending decisions (which Rombach points out that 96 percent of that increase over the next couple of years is recurring in nature) Gov. Kathleen Blanco and her Democrat legislative allies assume that extra shot of revenues is not a one-time thing but will continue indefinitely – an assumption the report correctly points out is reckless.
Second, the Stelly Plan – lowering sales taxes but increasing income taxes – the report notes has the perverse effect of increasing the most marginal tax rates among the middle categories of filers, with the worst starting for two-filing families around $65,000 and ameliorating in higher brackets. This is because of the elimination of deductions: the lowest income families take few if any, barely if at all lowering their already low marginal rate, while for the higher income families the amount of deductions that can be taken in almost all cases are relatively small compared to their total incomes, so the relative increase they faced was not as large.
Rombach recommends restoring these mortgage and charitable deductions – a move the Legislature seems prepared to take. Unfortunately, lost in the criticism of the Stelly Plan is an overall critique of the very progressive income tax structure in Louisiana (which the report notes in passing that the Stelly Plan exacerbated, and it does call for lowering tax bracket thresholds to improve this) which is probably a greater impediment to economic freedom and growth in Louisiana. This would emphasize why the Stelly increases were suboptimal – taking money out of the hands of the most productive citizens.
Third, the report investigates the state of secondary and elementary education spending in Louisiana, given that a justification for a good portion of the new budgetary commitments is for this area, particularly raising the salaries of teachers. Echoing a point made often in this space, by no means does Louisiana under-fund in this area, particularly given the dismal performance of schools on a statewide basis and with no means to ensure educator accountability, despite the fact that these implementing measures, such as merit pay, improves education quality.
While the report sometimes is a bit unclear in its assumptions and methodological details, its premise seems sound: Blanco’s current budget makes imprudent choices that will haunt the state fiscally for years to come.
6.6.07
Montgomery set to hand Blanco victory over his party
Democrat Gov. Kathleen Blanco looks ready to reverse her loss of months ago to Republicans to increase dramatically state spending – thanks to Republican (in name only) state Rep. Billy Montgomery and if she can get an all-points-bulletin out for Democrat state Rep. Romo Romero.
HB 3 is the enabling legislation to sell bonds to continue capital outlay funding in HB 2, but to pass requires a two-thirds vote of the seated membership of each Louisiana Legislature chamber. Last week, enough Republicans got together to prevent attaining those 70 votes, saying they would keep the bill from passing until Blanco and her Democrat leadership refrained from ramming through a portion of over a billion dollars in recurring spending increases in favor of increasing the relative pittance of tax cuts offered by the Democrats. The GOP is asking for a shift of about $350 million away from spending and into the people’s pockets.
Last December, a different, procedural move enabled Republicans to stop a similar move by Blanco. As the months progressed, their warnings about the cooling budget picture proved true making it prudent for the state to make minimal new commitments. But, true to their roots, the free-spending Democrats ignored the data and pressed on, forcing Republicans into a repeat attempt to slow the spending train down.
Given their current numbers, the GOP could not afford more than seven defections. But given that there are a few liberals among those elected as Republicans, and a few more who were elected initially as Democrats who switched to the GOP out of political opportunism, there remained plenty of opportunities for Democrats to pick off enough of these RINOs.
Last week’s vote showed the Democrats were close. Theoretically, they were two short when assuming those seven who were absent would vote by party. Two of the three Republicans violated that, meaning no further defections could be tolerated.
But in yesterday’s vote, as I predicted opportunist Montgomery flipped his vote (three Republicans were absent but that is like a negative vote so it did not harm their position). That would have given the Democrats 70 votes – except that Romero missed the vote, temporarily saving the House GOP’s effort to cut taxes and spending, buying it a little more time to bargain.
However, with Montgomery, who is running for the Senate in the fall being term-limited out of the House, now off the reservation, if Blanco can get all of their supporters to show up, Montgomery will earn a dubious distinction. His was the crucial vote to increase net taxes across the state in 2002, and now likely his will be the crucial vote that prevents meaningful tax cuts – something Senate District 37 voters should keep in mind as they head to the polls this fall.
HB 3 is the enabling legislation to sell bonds to continue capital outlay funding in HB 2, but to pass requires a two-thirds vote of the seated membership of each Louisiana Legislature chamber. Last week, enough Republicans got together to prevent attaining those 70 votes, saying they would keep the bill from passing until Blanco and her Democrat leadership refrained from ramming through a portion of over a billion dollars in recurring spending increases in favor of increasing the relative pittance of tax cuts offered by the Democrats. The GOP is asking for a shift of about $350 million away from spending and into the people’s pockets.
Last December, a different, procedural move enabled Republicans to stop a similar move by Blanco. As the months progressed, their warnings about the cooling budget picture proved true making it prudent for the state to make minimal new commitments. But, true to their roots, the free-spending Democrats ignored the data and pressed on, forcing Republicans into a repeat attempt to slow the spending train down.
Given their current numbers, the GOP could not afford more than seven defections. But given that there are a few liberals among those elected as Republicans, and a few more who were elected initially as Democrats who switched to the GOP out of political opportunism, there remained plenty of opportunities for Democrats to pick off enough of these RINOs.
Last week’s vote showed the Democrats were close. Theoretically, they were two short when assuming those seven who were absent would vote by party. Two of the three Republicans violated that, meaning no further defections could be tolerated.
But in yesterday’s vote, as I predicted opportunist Montgomery flipped his vote (three Republicans were absent but that is like a negative vote so it did not harm their position). That would have given the Democrats 70 votes – except that Romero missed the vote, temporarily saving the House GOP’s effort to cut taxes and spending, buying it a little more time to bargain.
However, with Montgomery, who is running for the Senate in the fall being term-limited out of the House, now off the reservation, if Blanco can get all of their supporters to show up, Montgomery will earn a dubious distinction. His was the crucial vote to increase net taxes across the state in 2002, and now likely his will be the crucial vote that prevents meaningful tax cuts – something Senate District 37 voters should keep in mind as they head to the polls this fall.
5.6.07
Can electoral considerations save LA ethics bill?
No doubt that certain “supporters” of HB 730 amended it on the Louisiana House of Representatives floor last week, along some members who approved them and the bill as a whole, had the sole intention of trying to sink it later in the legislative process. But their efforts may backfire.
This bill by state Rep. Michael Jackson was to create simple, even innocuous, reporting requirements of legislators. Basically, all it would require them to do is to report contacts or ownership, directly or indirectly, with entities that deal with the state. It was next to nothing in ethics standards, but better than nothing.
On the floor, several amendments broadened the scope to include all state and local officials, even appointed ones, as well as candidates to offices by speeding up the effective date to Aug. 15. It made this a stronger bill, but the motive for many was to make its requirements seem so onerous and unworkable as to give political cover to legislators trying to defeat it.
Surely many House members who didn’t want even the original minimal requirements knew that its next stop was the Senate and Governmental Affairs Committee, which has gained a reputation in recent years under the chairmanship of a regular violator of ethics statutes state Sen. Charles Jones as a graveyard of ethics reform and incubator of measures that serve to increase the amount of potential corruption in the state political system, such as its support of laws designed to impair ballot security at higher taxpayer cost. They hope this committee will do their dirty work for them.
But will it? Senators know that voting against this will look bad to constituents, so anyone gunning for reelection with be hesitant to do so.
If you look at the committee’s composition, only three of its members, Chris Ullo and Noble Ellington with Jones, are term-limited – and Ellington plans to run for a House seat. Reviewing other committee members, it’s unlikely that ex-bagman Cleo Fields would support ethics legislation, but others are running for reelection. It’s possible that since five members are running for election of some sort in the fall, the votes would be there to pass the bill on.
Thus, it may be up to Jones himself to end the life of ethics reform. As chairman, unless the committee majority prefers otherwise, he can simply never bring up the bill. It also could be yanked out of committee by the entire Senate, but while committee and Senate majorities may vote for the bill if presented to them, but they won’t lift a finger to get the vote in front of them. Expect Jones to use his position to strangle even this mild ethics reform, with the blessing of many senators.
This bill by state Rep. Michael Jackson was to create simple, even innocuous, reporting requirements of legislators. Basically, all it would require them to do is to report contacts or ownership, directly or indirectly, with entities that deal with the state. It was next to nothing in ethics standards, but better than nothing.
On the floor, several amendments broadened the scope to include all state and local officials, even appointed ones, as well as candidates to offices by speeding up the effective date to Aug. 15. It made this a stronger bill, but the motive for many was to make its requirements seem so onerous and unworkable as to give political cover to legislators trying to defeat it.
Surely many House members who didn’t want even the original minimal requirements knew that its next stop was the Senate and Governmental Affairs Committee, which has gained a reputation in recent years under the chairmanship of a regular violator of ethics statutes state Sen. Charles Jones as a graveyard of ethics reform and incubator of measures that serve to increase the amount of potential corruption in the state political system, such as its support of laws designed to impair ballot security at higher taxpayer cost. They hope this committee will do their dirty work for them.
But will it? Senators know that voting against this will look bad to constituents, so anyone gunning for reelection with be hesitant to do so.
If you look at the committee’s composition, only three of its members, Chris Ullo and Noble Ellington with Jones, are term-limited – and Ellington plans to run for a House seat. Reviewing other committee members, it’s unlikely that ex-bagman Cleo Fields would support ethics legislation, but others are running for reelection. It’s possible that since five members are running for election of some sort in the fall, the votes would be there to pass the bill on.
Thus, it may be up to Jones himself to end the life of ethics reform. As chairman, unless the committee majority prefers otherwise, he can simply never bring up the bill. It also could be yanked out of committee by the entire Senate, but while committee and Senate majorities may vote for the bill if presented to them, but they won’t lift a finger to get the vote in front of them. Expect Jones to use his position to strangle even this mild ethics reform, with the blessing of many senators.
4.6.07
Shortfall response testifies to Blanco's lack of leadership
Is there any better illustration about the lack of leadership and refusal to take responsibility by Louisiana state government than how Democrat Gov. Kathleen Blanco proposes to “solve” the Road Home funding crisis?
The program for individual homeowner hurricane recovery looks to be $4.3 billion short, mostly because the state tried to pull a fast one on the federal government by surreptitiously expanding the program beyond the federal government’s intent to fund and shifting federal aid in ways federal law prohibits (the state claims it actually knows federal rules better than federal officials do and that the federal government should have known of these things). Despite being snookered, outraged federal officials and lawmakers kindly have taken the position that a bailout will occur if the state puts up some earnest money.
Blanco, who resisted that idea despite withering criticism, this weekend once again closed the barn door and ran after the horse, suddenly deciding to pledge to make up the shortfall with $718 million of funds – from the state in name only. Turns out they are mainly redirections of other federal funds for other purposes and also the recently waived matching requirement from the federal government for some of the over $60 billion the state has received from the federal government so far in recovery monies.
She complains that the state already has forked over $4.6 billion in its “own” funds to aid in recovery – itself a distortion of the truth. Take the sales tax money collected off the federal tens of billions of dollars, then slice out the state income tax proportion from all the imported workers assisting in the recovery, and you’ll find that’s close to that figure – it became the state’s money to spend only because the federal government made it available in the first place for the state to collect through taxation.
That fact illustrates that much of the state’s huge budget surplus is itself a creation of a bubble economy that already is dissipating. In essence, it’s a one-time bonus, so wouldn’t it make sense to spend it on a one-time thing like the Road Home instead of the pie-in-the-sky budget with large increases in recurring spending being pushed through the Legislature? Remarks to the state Senate Finance Committee by Blanco’s Commissioner of Administration Jerry Luke LeBlanc show just out of touch with reality the Blanco Administration is on this point.
LeBlanc, when asked why not dip into the state surplus for the Road Home shortfall, said “We have 144 members of the Legislature to deal with on that issue ... You don’t know what consensus you can reach.” Perhaps he can be forgiven for having been out of the Legislature for three whole years after a service there of over a decade for forgetting this, but the governor does have something called a line item veto. I’ll walk LeBlanc through this to help him out: Blanco calls in legislative leaders, tells them they had better commit a few hundred million of the surplus to Road Home, or she’ll use her line item veto take out about that much spending (vetoes that will be sustained with GOP legislator help) and then they can all get together in a special session in the middle of election season to dedicate it to the Road Home. She’d have that money set aside faster than it takes her to change her mind.
That’s called leadership, something to which Blanco is unsuited totally. Instead, she and her ilk that comprise the legislative leadership are like bratty, ignorant children who have to be dragged kicking and screaming into place until they do the right thing. The federal government is going to have to be the parent again here, in this case laying down one edict: take the $718 million thus pledged, add the $400 million set aside for the German steel mill that predictably never came to the state, and then it’ll talk about coughing up the rest. So this requires one more dose of tough love for the state government that refuses to grow up and take responsibility for its own actions and fate, instead of blaming others and wanting them to do the real work.
The program for individual homeowner hurricane recovery looks to be $4.3 billion short, mostly because the state tried to pull a fast one on the federal government by surreptitiously expanding the program beyond the federal government’s intent to fund and shifting federal aid in ways federal law prohibits (the state claims it actually knows federal rules better than federal officials do and that the federal government should have known of these things). Despite being snookered, outraged federal officials and lawmakers kindly have taken the position that a bailout will occur if the state puts up some earnest money.
Blanco, who resisted that idea despite withering criticism, this weekend once again closed the barn door and ran after the horse, suddenly deciding to pledge to make up the shortfall with $718 million of funds – from the state in name only. Turns out they are mainly redirections of other federal funds for other purposes and also the recently waived matching requirement from the federal government for some of the over $60 billion the state has received from the federal government so far in recovery monies.
She complains that the state already has forked over $4.6 billion in its “own” funds to aid in recovery – itself a distortion of the truth. Take the sales tax money collected off the federal tens of billions of dollars, then slice out the state income tax proportion from all the imported workers assisting in the recovery, and you’ll find that’s close to that figure – it became the state’s money to spend only because the federal government made it available in the first place for the state to collect through taxation.
That fact illustrates that much of the state’s huge budget surplus is itself a creation of a bubble economy that already is dissipating. In essence, it’s a one-time bonus, so wouldn’t it make sense to spend it on a one-time thing like the Road Home instead of the pie-in-the-sky budget with large increases in recurring spending being pushed through the Legislature? Remarks to the state Senate Finance Committee by Blanco’s Commissioner of Administration Jerry Luke LeBlanc show just out of touch with reality the Blanco Administration is on this point.
LeBlanc, when asked why not dip into the state surplus for the Road Home shortfall, said “We have 144 members of the Legislature to deal with on that issue ... You don’t know what consensus you can reach.” Perhaps he can be forgiven for having been out of the Legislature for three whole years after a service there of over a decade for forgetting this, but the governor does have something called a line item veto. I’ll walk LeBlanc through this to help him out: Blanco calls in legislative leaders, tells them they had better commit a few hundred million of the surplus to Road Home, or she’ll use her line item veto take out about that much spending (vetoes that will be sustained with GOP legislator help) and then they can all get together in a special session in the middle of election season to dedicate it to the Road Home. She’d have that money set aside faster than it takes her to change her mind.
That’s called leadership, something to which Blanco is unsuited totally. Instead, she and her ilk that comprise the legislative leadership are like bratty, ignorant children who have to be dragged kicking and screaming into place until they do the right thing. The federal government is going to have to be the parent again here, in this case laying down one edict: take the $718 million thus pledged, add the $400 million set aside for the German steel mill that predictably never came to the state, and then it’ll talk about coughing up the rest. So this requires one more dose of tough love for the state government that refuses to grow up and take responsibility for its own actions and fate, instead of blaming others and wanting them to do the real work.
3.6.07
Blanco, GOP play chicken again; will GOP blink this time?
Once again, in a different way than last December, a game of chicken has emerged between the Democrats that control Louisiana’s government and the minority Republican legislators. Last time Gov. Kathleen Blanco blinked. Will the same happen six months later?
In last year’s special session, even as they comprised only about 40 percent of the membership of the House, Louisiana Republicans managed to prevent huge new spending increases sponsored by Blanco and backed by her Democrat legislative leaders because the Louisiana people thoughtfully had amended the state Constitution to prevent growth of government spending faster than growth of the economy. To override this spending cap required a two-thirds vote, and with only a very few Republicans defecting, that spending was defeated.
Six months later, Blanco has used two dynamics to neuter this strategy as she again plans massive spending increases. First, her administration made estimates using methods questionable, if not outright violating, the Constitution to calculate a limit far in excess of the intentions behind that amendment. Second, she shifted monies into almost all of the almost two dozen dedicated funds parts of state spending practice, which do not count against the cap because they technically aren’t spent (but may be for the funds’ purposes starting Jul. 1) – a tactic not really available to her six months ago because the Jul. 1 start of the fiscal year was so far off.
This left the GOP with one recourse where as much as a two-thirds vote was needed – HB 3, the bill that permits the state to borrow money. They defeated it seven votes short of two-thirds, in essence holding over $5 billion in capital outlay requests hostage.
But that sounds more dramatic than it actually is. In reality, perhaps 5 percent of this authorized spending will occur within the next year because the state also has a borrowing limit. Still, it puts a project in a pipeline for money which, more often than not, means it eventually will get funded, even if it’s a decade later.
Drawing closer to state elections this fall than a year ago accentuating the electoral consequences of decisions, more defection among Republicans may occur before their leaders can broker a deal to reduce spending and increase tax cuts in exchange for letting HB 3 go through. The companion bill to it, HB 2, contains some projects that some of the “Republicans in Name Only” who were elected as Democrats who are running for reelection or for Senate seats, such as state Rep. Billy Montgomery, or liberal Republicans like the non-term-limited state Rep. Tom McVea.
Among the seven representative missing the vote, five were Democrats meaning if party loyalty held (not a single Democrat voted against it), there are 68 votes. Both Montgomery and McVea not only voted for HB 3, they also voted against an HB 1 amendment to cut back spending. If these two RINOs fall back into their liberal spending ways, Republicans lose. But if the GOP leadership can minimize the total defections to one, always having at least 36 opposed, they will win for a second time in six months – and again making the people of Louisiana winners against a reckless, out-of-control bloated state government.
In last year’s special session, even as they comprised only about 40 percent of the membership of the House, Louisiana Republicans managed to prevent huge new spending increases sponsored by Blanco and backed by her Democrat legislative leaders because the Louisiana people thoughtfully had amended the state Constitution to prevent growth of government spending faster than growth of the economy. To override this spending cap required a two-thirds vote, and with only a very few Republicans defecting, that spending was defeated.
Six months later, Blanco has used two dynamics to neuter this strategy as she again plans massive spending increases. First, her administration made estimates using methods questionable, if not outright violating, the Constitution to calculate a limit far in excess of the intentions behind that amendment. Second, she shifted monies into almost all of the almost two dozen dedicated funds parts of state spending practice, which do not count against the cap because they technically aren’t spent (but may be for the funds’ purposes starting Jul. 1) – a tactic not really available to her six months ago because the Jul. 1 start of the fiscal year was so far off.
This left the GOP with one recourse where as much as a two-thirds vote was needed – HB 3, the bill that permits the state to borrow money. They defeated it seven votes short of two-thirds, in essence holding over $5 billion in capital outlay requests hostage.
But that sounds more dramatic than it actually is. In reality, perhaps 5 percent of this authorized spending will occur within the next year because the state also has a borrowing limit. Still, it puts a project in a pipeline for money which, more often than not, means it eventually will get funded, even if it’s a decade later.
Drawing closer to state elections this fall than a year ago accentuating the electoral consequences of decisions, more defection among Republicans may occur before their leaders can broker a deal to reduce spending and increase tax cuts in exchange for letting HB 3 go through. The companion bill to it, HB 2, contains some projects that some of the “Republicans in Name Only” who were elected as Democrats who are running for reelection or for Senate seats, such as state Rep. Billy Montgomery, or liberal Republicans like the non-term-limited state Rep. Tom McVea.
Among the seven representative missing the vote, five were Democrats meaning if party loyalty held (not a single Democrat voted against it), there are 68 votes. Both Montgomery and McVea not only voted for HB 3, they also voted against an HB 1 amendment to cut back spending. If these two RINOs fall back into their liberal spending ways, Republicans lose. But if the GOP leadership can minimize the total defections to one, always having at least 36 opposed, they will win for a second time in six months – and again making the people of Louisiana winners against a reckless, out-of-control bloated state government.
31.5.07
LA demographic shifts demand changing current budget
The Census Bureau estimates that the population of Louisiana relatively is aging, as over the past few years the state actually increased in number older people coming into the state while the number of younger continue to decline. The policy consequences of this need addressing now, but it is questionable whether Gov. Kathleen Blanco and the Louisiana Legislature will do so properly.
The appropriations bill for operating expenses, HB 1, is shaping up to take flights of fancy from this reality. Blanco, for example, wants to add roughly 1,000 new bureaucratic jobs in state government, even though the state has lost population and these demographics suggest more losses on the way. Simultaneously, she wants to enact little in the way of meaningful tax reduction, precisely the solution to entice younger, productive workers to come to the state or remain living in it.
Without that happening, a disproportionate share of Louisiana’s population will comprise of older citizens, and the biggest impact as a result of that trend historically has been greater demand on health care services, the state’s largest expenditure after education. This strengthens the argument for moving away from health care policy based upon institutional solutions to that stressing more individual choice involving home- and community-based solutions, because these are cheaper and better tailored to individual needs as opposed to the one-size-fits-all institutional approach.
Yet Louisiana has shown a striking reluctance to make this commonsensical shift. This legislative session, progress already has been made on SB 1, a bill that actually continues the state’s emphasis on money going to institutions rather than following people in regards to indigent health care. At the same time, no movement has occurred on bills like SB 98 which would create many more opportunities to shift spending to home- and community-based care.
It’s that time during the session where these kinds of matters start getting resolved. Today HB 1 is being debated in the House, and a Senate Committee is scheduled to take up SB 98. Altering the former to remove spending counterintuitive to census forecasts to enable more tax relief, while approving the latter will show that Blanco and the Legislature take seriously this demographic warning. If they don’t, massive fiscal pain lies ahead for Louisiana because as each year passes, population shifts will make costs continue to escalate while revenues will grow more slowly, if at all.
The appropriations bill for operating expenses, HB 1, is shaping up to take flights of fancy from this reality. Blanco, for example, wants to add roughly 1,000 new bureaucratic jobs in state government, even though the state has lost population and these demographics suggest more losses on the way. Simultaneously, she wants to enact little in the way of meaningful tax reduction, precisely the solution to entice younger, productive workers to come to the state or remain living in it.
Without that happening, a disproportionate share of Louisiana’s population will comprise of older citizens, and the biggest impact as a result of that trend historically has been greater demand on health care services, the state’s largest expenditure after education. This strengthens the argument for moving away from health care policy based upon institutional solutions to that stressing more individual choice involving home- and community-based solutions, because these are cheaper and better tailored to individual needs as opposed to the one-size-fits-all institutional approach.
Yet Louisiana has shown a striking reluctance to make this commonsensical shift. This legislative session, progress already has been made on SB 1, a bill that actually continues the state’s emphasis on money going to institutions rather than following people in regards to indigent health care. At the same time, no movement has occurred on bills like SB 98 which would create many more opportunities to shift spending to home- and community-based care.
It’s that time during the session where these kinds of matters start getting resolved. Today HB 1 is being debated in the House, and a Senate Committee is scheduled to take up SB 98. Altering the former to remove spending counterintuitive to census forecasts to enable more tax relief, while approving the latter will show that Blanco and the Legislature take seriously this demographic warning. If they don’t, massive fiscal pain lies ahead for Louisiana because as each year passes, population shifts will make costs continue to escalate while revenues will grow more slowly, if at all.
30.5.07
Hijinks call for abolishing Commission, Citizens revamp
It’s interesting and perhaps more than coincidental that as the Louisiana Legislature considers abolishing the Louisiana Insurance Rating Commission where some of its members complain about insurance rate increases and as the state-owned property insurer Citizens Property Insurance Corporation is discovered to have accounting irregularities, that the two are connected.
Three vocal critics of ridding the state of the Commission, the only one in the nation and on which its political appointees have the power to approve of rate increases of more than 10 percent, also who have been reluctant to grant large post-disaster rate increases to private companies, Steven “Rock” Ruiz, Jabari Ragas, and Joe Godchaux apparently benefited from hunting and fishing trips whose legality have been questioned by state auditors. In addition, Ruiz serves as a board member for the Property Insurance Association of Louisiana which also received almost $200,000 dollars of questionable funds from Citizens. Also getting perks was the chairman of LIRC, Chad Brown.
Even so, in December, 2006, LIRC rejected whopping increase requests for Citizens. The stated reason was the recently-revealed accounting mess at Citizens which prevented knowledge of financial records for the previous two years. But a month later, their tune had changed. The three commissioners then let the increases through, excusing their vote by saying that state law apparently does not allow LIRC to regulate Citizens’ rate increases. (Not included in the largesse were another commissioner who has provided vocal support, Barry Busada, and its only commissioner calling for LIRC’s elimination, Prof. Christine Berry.)
In other words, commissioners who received benefits from lobbyists working on behalf of Citizens at first denied a rate increase, then claimed they couldn’t stop it. If there was anything more convincing that could happen to validate charges that LIRC was too political of a body, it’s hard to think of one.
At least legislation to accomplish that, SB 185 and HB 860, seem well on course. But, despite the financial records problem and dubious spending, HB 962 which would allow Citizens to compete more effectively with potential competition continues to advance, surviving a narrow committee win along party lines – Republican state Rep. Tom McVea crucially defecting to allow the one-vote win – despite Insurance Commissioner Jim Donelon’s opposition.
The bill languishes on the House calendar as support for passage remains uncertain even with a Democrat majority. As long as the financial and ethical mess at Citizens continues unresolved, legislators would be foolish to grant it greater competitive ability that could allow it potentially to cheat, intentionally or otherwise, more taxpayers and policy-holders.
Three vocal critics of ridding the state of the Commission, the only one in the nation and on which its political appointees have the power to approve of rate increases of more than 10 percent, also who have been reluctant to grant large post-disaster rate increases to private companies, Steven “Rock” Ruiz, Jabari Ragas, and Joe Godchaux apparently benefited from hunting and fishing trips whose legality have been questioned by state auditors. In addition, Ruiz serves as a board member for the Property Insurance Association of Louisiana which also received almost $200,000 dollars of questionable funds from Citizens. Also getting perks was the chairman of LIRC, Chad Brown.
Even so, in December, 2006, LIRC rejected whopping increase requests for Citizens. The stated reason was the recently-revealed accounting mess at Citizens which prevented knowledge of financial records for the previous two years. But a month later, their tune had changed. The three commissioners then let the increases through, excusing their vote by saying that state law apparently does not allow LIRC to regulate Citizens’ rate increases. (Not included in the largesse were another commissioner who has provided vocal support, Barry Busada, and its only commissioner calling for LIRC’s elimination, Prof. Christine Berry.)
In other words, commissioners who received benefits from lobbyists working on behalf of Citizens at first denied a rate increase, then claimed they couldn’t stop it. If there was anything more convincing that could happen to validate charges that LIRC was too political of a body, it’s hard to think of one.
At least legislation to accomplish that, SB 185 and HB 860, seem well on course. But, despite the financial records problem and dubious spending, HB 962 which would allow Citizens to compete more effectively with potential competition continues to advance, surviving a narrow committee win along party lines – Republican state Rep. Tom McVea crucially defecting to allow the one-vote win – despite Insurance Commissioner Jim Donelon’s opposition.
The bill languishes on the House calendar as support for passage remains uncertain even with a Democrat majority. As long as the financial and ethical mess at Citizens continues unresolved, legislators would be foolish to grant it greater competitive ability that could allow it potentially to cheat, intentionally or otherwise, more taxpayers and policy-holders.
29.5.07
Name game tells more about Democrats than Jindal
When Louisiana Democrats in their communiqués call Republican gubernatorial candidate Rep. Bobby Jindal by his given name Piyush even when he prefers his nickname, it tells us a whole lot more about them than it does Jindal.
Democrats say this do this because they wish to highlight the “façade” Jindal represents to the world. What that is, nobody knows, because there’s no substance to the claim. Who Jindal is his voting record in Congress makes clear, one very enabling for the people of Louisiana.
And, at a logical level, the tactic fails utterly. Let’s see, Jindal adopted hsi nickname when he was 4, so I guess at that tender age he already was striving to hone his public image as he eyed a future brilliant career in politics. If you believe that, you’ll also believe Democrats actually have a sensible, helpful agenda for Louisiana, too.
The whole naming reveals precisely that Louisiana Democrats have no realistic agenda for the state’s governance. Deep down, they know the vast majority in the state will reject their ideology, built on the accumulation of power and prestige for the chosen few (themselves), using the people to get there rather than helping enabling them to lead better lives (the ultimate goal of proper government). So, liberal Democrats resort to tactics such as naming people that distract from that terrible reality.
It also provides deeper insight into the liberalism that drives Democrat leaders. Liberal politicians’ dark secret they try to keep out of sight is that they use ethnic minorities for political purposes, rather than do anything to help them, as the incredible laundry list of failed liberal programs demonstrates. This is why they insist on seeing Jindal as a kind of “opportunist” because that is how they themselves see the place of minorities in America: race as an object to be used, as a defining characteristic that overwhelms the individuality of any person. To them it must be highlighted, either as a vote-getter or vote-detractor.
The “opportunity” which they fear is that Jindal’s election this fall will expose their secret, to show the lie that is their mantra that ethnic minorities in America cannot succeed without their Democrat and/or liberal overseers being the engine of this achievement, that non-whites cannot succeed by themselves contrary to what Jindal and conservatives argue. It is why the naming issue is the least of the negative onslaught of imagined crimes that the party will throw at Jindal in the coming months.
Democrats say this do this because they wish to highlight the “façade” Jindal represents to the world. What that is, nobody knows, because there’s no substance to the claim. Who Jindal is his voting record in Congress makes clear, one very enabling for the people of Louisiana.
And, at a logical level, the tactic fails utterly. Let’s see, Jindal adopted hsi nickname when he was 4, so I guess at that tender age he already was striving to hone his public image as he eyed a future brilliant career in politics. If you believe that, you’ll also believe Democrats actually have a sensible, helpful agenda for Louisiana, too.
The whole naming reveals precisely that Louisiana Democrats have no realistic agenda for the state’s governance. Deep down, they know the vast majority in the state will reject their ideology, built on the accumulation of power and prestige for the chosen few (themselves), using the people to get there rather than helping enabling them to lead better lives (the ultimate goal of proper government). So, liberal Democrats resort to tactics such as naming people that distract from that terrible reality.
It also provides deeper insight into the liberalism that drives Democrat leaders. Liberal politicians’ dark secret they try to keep out of sight is that they use ethnic minorities for political purposes, rather than do anything to help them, as the incredible laundry list of failed liberal programs demonstrates. This is why they insist on seeing Jindal as a kind of “opportunist” because that is how they themselves see the place of minorities in America: race as an object to be used, as a defining characteristic that overwhelms the individuality of any person. To them it must be highlighted, either as a vote-getter or vote-detractor.
The “opportunity” which they fear is that Jindal’s election this fall will expose their secret, to show the lie that is their mantra that ethnic minorities in America cannot succeed without their Democrat and/or liberal overseers being the engine of this achievement, that non-whites cannot succeed by themselves contrary to what Jindal and conservatives argue. It is why the naming issue is the least of the negative onslaught of imagined crimes that the party will throw at Jindal in the coming months.
28.5.07
The meaning of Memorial Day
This column publishes every Sunday through Thursday around noon U.S. Central Time (maybe even after sundown on busy days, or maybe before noon if things work out) except whenever a significant national holiday falls on the Monday through Friday associated with the otherwise-usual publication on the previous day (unless it is Independence Day, Christmas, or New Year's Day when it is the day on which the holiday is observed by the U.S. government). In my opinion, there are six of these: Memorial Day, Independence Day, Veterans' Day, Thanksgiving Day, Christmas, and New Year's Day.
With Monday, May 28 being Memorial Day, I invite you to explore the link above.
With Monday, May 28 being Memorial Day, I invite you to explore the link above.
27.5.07
Blanco Road Home trick may blow up to Jindal's favor
As revelations of the events in establishing Democrat Gov. Kathleen Blanco’s Road Home Program continue to surface, the strategy employed by Blanco regarding it has become clear: make huge promises her administration knew could not be fulfilled, then blame somebody else for the problems.
For months, Blanco has blamed the program’s contractor, ICF International, for implementation problems; while how much is that company’s fault or Blanco’s is in dispute, the fact is Blanco’s people were the ones who hired the firm and thus she and they bear the ultimate responsibility for shortcomings. However, this week a new tactic was launched, using the old excuse of complaining problems are those of the federal government as well as new ones which, when examined thoroughly, tell us much about the policy-making problems inherent to the liberalism of the Blanco Administration.
This concerns the underfunded nature of the program. That the program potentially could fall as many as $3 billion short was known months ago by Blanco, but only until Republican Rep. Bobby Jindal publicized the matter did the Blanco Administration grudgingly acknowledge the situation. It now claims that the $7.6 billion it asked for will be insufficient because of a combination of homeowner stupidity, insurance company greed, higher construction costs, and a federal government vendetta against Louisiana.
First, the state blames homeowners because they didn’t have enough insurance, or even any. Second, it blames insurance companies because it says they tried to avoid payouts as much as possible. Such views confirm that populist liberals such Blanco either misunderstand human nature or were going to use the liberal/populist ethos in the state to their own political advantage by laying blame on other forces and getting potential voters to buy it.
Liberals cannot seem to get it through their heads that when people are led to expect government is to run their lives rather than individuals taking responsibilities for their own lives, that demand for whatever it is that government subsidizes will increase beyond what planners predict. Blanco and her crew act shocked that, as soon as people heard from her that government was going to backstop some, even all, of their losses, that people would become less vigilant in pursuing their claims with insurance companies (who cannot be blamed for not trying to push money on people or to give it out without absolute proof of loss), and that more people than expected would try to squeeze as much as they could out of government.
Third (which also partially addresses the second as some argue private insurers also were negligent on this issue), the Blanco Administration hints that the federal government intended to fund claims for wind as well as water claims. But documents from both the federal and state governments showed the federal government fairly unambiguously said it did not intend the original money to be used to pay for uninsured wind damage, that the state had itself intended not to cover it when the details of the program were being formulated, and only unilaterally later decided the Road Home would cover such damage.
This and statements you hear coming from the state about how it’s not going to “abandon” some storm victims reveals the mindset of Blanco and her appointees on the issue. Recognize the train of events: the state and federal government negotiated the $7.6 billion with the understanding that wind damage was not included, then the state turned around and decided it would pay out for that far enough along in the process where the federal government could not stop it legally, and now has come crying, even using verbal blackmail, to try to get the federal to cough up additional billions.
While it’s possible that the Blanco Administration is just clueless, more likely was this was a part of the plot to get her reelected. They knew the federal government wouldn’t give the additional money, so they tried to trick it and then use it as a campaign issue, the “Saintly Blanco vs. Cruel, Partisan Federal Government” ploy she had to run with when her incompetence became so apparent. As a theme, it wasn’t very convincing obviously as Blanco fund herself pushed out of a chance to continue her reign of error.
But that won’t stop them from trying to execute the plan to continue to try to save face. Having had to put up with such shenanigans for approaching two years now, the federal government has indicated its lack of sympathy for the Blanco’s self-created plight for the state.
Except that it is an election year. Expect sometime this summer for Jindal to announce he has worked out a deal with the federal government to provide some relief, redounding to his political credit as he continues cruising to victory to succeed Blanco. Her likely plan blowing up in her face will prove the final, greatest indignity to Blanco on this issue.
For months, Blanco has blamed the program’s contractor, ICF International, for implementation problems; while how much is that company’s fault or Blanco’s is in dispute, the fact is Blanco’s people were the ones who hired the firm and thus she and they bear the ultimate responsibility for shortcomings. However, this week a new tactic was launched, using the old excuse of complaining problems are those of the federal government as well as new ones which, when examined thoroughly, tell us much about the policy-making problems inherent to the liberalism of the Blanco Administration.
This concerns the underfunded nature of the program. That the program potentially could fall as many as $3 billion short was known months ago by Blanco, but only until Republican Rep. Bobby Jindal publicized the matter did the Blanco Administration grudgingly acknowledge the situation. It now claims that the $7.6 billion it asked for will be insufficient because of a combination of homeowner stupidity, insurance company greed, higher construction costs, and a federal government vendetta against Louisiana.
First, the state blames homeowners because they didn’t have enough insurance, or even any. Second, it blames insurance companies because it says they tried to avoid payouts as much as possible. Such views confirm that populist liberals such Blanco either misunderstand human nature or were going to use the liberal/populist ethos in the state to their own political advantage by laying blame on other forces and getting potential voters to buy it.
Liberals cannot seem to get it through their heads that when people are led to expect government is to run their lives rather than individuals taking responsibilities for their own lives, that demand for whatever it is that government subsidizes will increase beyond what planners predict. Blanco and her crew act shocked that, as soon as people heard from her that government was going to backstop some, even all, of their losses, that people would become less vigilant in pursuing their claims with insurance companies (who cannot be blamed for not trying to push money on people or to give it out without absolute proof of loss), and that more people than expected would try to squeeze as much as they could out of government.
Third (which also partially addresses the second as some argue private insurers also were negligent on this issue), the Blanco Administration hints that the federal government intended to fund claims for wind as well as water claims. But documents from both the federal and state governments showed the federal government fairly unambiguously said it did not intend the original money to be used to pay for uninsured wind damage, that the state had itself intended not to cover it when the details of the program were being formulated, and only unilaterally later decided the Road Home would cover such damage.
This and statements you hear coming from the state about how it’s not going to “abandon” some storm victims reveals the mindset of Blanco and her appointees on the issue. Recognize the train of events: the state and federal government negotiated the $7.6 billion with the understanding that wind damage was not included, then the state turned around and decided it would pay out for that far enough along in the process where the federal government could not stop it legally, and now has come crying, even using verbal blackmail, to try to get the federal to cough up additional billions.
While it’s possible that the Blanco Administration is just clueless, more likely was this was a part of the plot to get her reelected. They knew the federal government wouldn’t give the additional money, so they tried to trick it and then use it as a campaign issue, the “Saintly Blanco vs. Cruel, Partisan Federal Government” ploy she had to run with when her incompetence became so apparent. As a theme, it wasn’t very convincing obviously as Blanco fund herself pushed out of a chance to continue her reign of error.
But that won’t stop them from trying to execute the plan to continue to try to save face. Having had to put up with such shenanigans for approaching two years now, the federal government has indicated its lack of sympathy for the Blanco’s self-created plight for the state.
Except that it is an election year. Expect sometime this summer for Jindal to announce he has worked out a deal with the federal government to provide some relief, redounding to his political credit as he continues cruising to victory to succeed Blanco. Her likely plan blowing up in her face will prove the final, greatest indignity to Blanco on this issue.
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