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8.10.14

Priorities, not taxes or restructuring, to help LA roads

Did Louisiana Treasurer John Kennedy, a potential 2015 gubernatorial candidate, recently give a green light to tax increases for transportation? If so, he’s off the more solid ground he occupies in his lectures of the virtues of prioritization.



Kennedy, in speaking to the Transportation Funding Task Force, noted that the public was wary of any additional funding requests for roads building and maintenance unless it was convinced these were carried out in a fashion that reflected true needs of the state, citing other spending uses of capital funds on construction projects that very few would call an important priority. The group is to meet four times prior to next year’s legislative session to give recommendations on how enable the state to eat into a roughly $10 billion backlog of roads requests.



If Kennedy meant he was open to a tax increase to do this, he would be joining for him unusual company. Also on the panel is a former secretary of the Department of Transportation and Development, Kam Movassaghi, who made it a habit during his tenure than encompassed the last six years of the former Gov. Mike Foster Administration to call for tax increases. Even now, one recommendation he wants the group to forward would be to replace the existing regular gasoline tax, the main source of funding for roads, of 16 cents per gallon with an 8 percent levy, which at present oil prices would work out to be around a 50 percent increase, arguing that the tax has less than half of its purchasing power when it was enacted three decades ago.

Can keg stand disguise far left record of Landrieu?

What has allowed Sen. Mary Landrieu to hang on in the U.S. Senate swimming against a stronger and stronger current is exactly the same thing that most likely will end her elected political career this year.



Consider Landrieu’s predicament. In the ex-Confederate states (Virginia, with its northern population tied with an umbilical cord to the big government liberalism of Washington, D.C. excepted), only four Democrats survive in the Senate (with two running for reelection also this year and endangered like Landrieu). Of the six times they have run, none has won by less than Landrieu’s biggest win ever in 2008. And while undoubtedly the presidential ticket of Democrats that won 52 percent of Louisiana’s vote in 1996 helped her win by an official count of fewer than 6,000 votes, in subsequent presidential elections Republicans would take the state with 53, 57, 59, and 58 percent of the vote. In her last election, she remarkably ran ahead of her own ticket some 12 percent.



Her last name does help; would anybody have paid attention to some 23-year-old sorority chick running for the Legislature without a famous last name in the world of state politics, much less have elected her? But the name only paid the entry fee to country club membership; as things transpired, she turned out more than capable of keeping up with the annual dues.

7.10.14

Fix sessions & blight, no on other LA amendments

If you like dealing with constitutional amendments, then you’ll love the Nov. 4 ballot with 14 of them. As a public service for Louisianans faced with making rational decisions on this, here we go with whirlwind recommendations:



#1 – no. This not only would lock in nursing home Medicaid reimbursement rates and put pressure on cutting rates for home- and community-based care, but have them automatically increase – even as legally the state must move people out of institutional care. The lack of budget flexibility introduced almost assuredly would lead to higher taxes, legal difficulties, and reduced funding for the only other significant area that would not be protected, higher education (more information is here).



#2 – no. This allows hospitals to increase prices to sock away in a special protected fund. Similar to #1, it also reduces budgetary flexibility, encouraging tax increases in addition to the indirect “sick tax” and cuts elsewhere (more information is here).

6.10.14

If not solid, Greenstein perjury case may cost LA



So former Secretary of the Department of Health and Hospitals Bruce Greenstein has joined an illustrious list of major state officeholders in Louisiana in garnering an indictment for activities related to his office. As the saga unfolds, the risk the state takes financially in pursuing this course of action is far greater than the chances of any wider malfeasance being uncovered.



Forced out of office last year, Greenstein did a low-key perpetrator walk last week upon being charged formally with nine counts of lying to both the Louisiana Senate and a parish grand jury while under oath. These charges stemmed from his testimony about relations with a past successful bidder for a state Medicaid claims processing contract to Client Network Services Inc., where it is alleged he covered up communications designed to help the firm win this, to which he pled not guilty. After the federal government started an investigation, then joined by the state, leading to Greenstein departure, the state cancelled the contract, which has led to the firm suing the state for breach.



While no specifics have been made public, thousands of messages in text and telephonic form were exchanged between Greenstein and the company in time period encompassed in the awarding process. The charges allege the content of these were instrumental in giving a competitive advantage to CNSI. After awarding to it but before cancellation, already CNSI requests for changes and extra money were fueling the credibility of complaints from competitors that CNSI had lowballed to win, even after promising it would ask for no such adjustments.

4.10.14

Angelle entry for top spot hurts Dardenne, helps Kennedy



With Public Service Commissioner Scott Angelle declaring his candidacy for governor of Louisiana in 2015, this disproportionately detracts from the chances of one existing announced candidate and should embolden another heretofore unannounced to dive right in.



Perhaps the lazy way to consider the move is to see this as part of the match for state supremacy between current Gov. Bobby Jindal and Sen. David Vitter, the latter already having taken the plunge to replace the former. Jindal cannot run for a third consecutive term, so to stay on top of things he must resort to a surrogate, the thinking goes, and with Angelle having been a Jindal cabinet appointee, temporary lieutenant governor, and legislative go-between for the governor he fits the bill.



Assuredly that’s part of it, but Angelle put himself out there primarily because he thinks he can win without being (overall) a rigidly principled conservative like Jindal. It’s tempting, but ultimately reductionist, to write off Angelle as a Jindal clone. Recognize that Angelle came to politics in the state from an insider’s family, and as a Democrat, whose outward conservatism one senses doesn’t quite match Jindal’s all-his-life unshakeable fervency but more opportunistically as in the mode of several ex-Democrat legislators who as soon as Republicans came within sniffing distance of a legislative majority jumped ship. His actions on the PSC seem to confirm that, where he’s demonstrated he will defect strategically from a pure free-market, anti-crony capitalist, right-sized government agenda.

2.10.14

Statistics suggest coming LA job, tax revenue boom

As good economic news has flowed around Louisiana over the past few years – low unemployment, job creation, and announcements of new jobs coming online – some policy-makers have wondered why these seem only partially reflected in state tax collections. Others say this level of success has constrained the labor market to the point that it might hamper major expansions seen on the horizon. The process to reconcile the notions that a healthy labor market on the verge of a squeeze, but one not well translated into economic growth that brings increased tax revenues, begins with an interesting report from the Legislative Fiscal Office.



The LFO has taken to putting out, between legislative sessions, a monthly newsletter investigating fiscal topics of its choosing, and in this past month among other items looked at Louisiana’s job growth relative to the south and the country as a whole. Choosing Feb. 2010 as a baseline, due to the judgment that this was the nadir of the 2008 recession, since then (through Aug. 2014 preliminary figures) overall employment growth has lagged the south and country. This is because while private sector job growth has been about the same for all three, there has been substantial retraction in government employment in Louisiana. This could explain why sales and income tax receipt increases have been tepid.



But to focus on this alone, if not reductionist, stops way short of fully understanding the dynamics. In March, for the first time ever the state cracked the 2 million employed number, and while receding slightly from its April high mark since is still above that benchmark. And the August preliminary number showed the most people in the active workforce ever for the state, at about 2.13 million. As a result of these numerical perambulations, the state’s unemployment rate fell from its 6.9 percent rate in Feb. 2010 to the preliminary 5.8 this August – which is up considerably from the early spring number of 4.5 percent, as a result of about 30,000 more people in the labor force in that six months but only about 1,000 more jobs over that period. By contrast, government jobs have fallen 10 percent from that Feb. 2010 baseline, or about 34,000, and over 2,000 alone since the spring – leaving the fewest government jobs in Louisiana since 1991.

1.10.14

Suit tips hand of regressive educational agenda



Special interests in Louisiana’s public education system have not given up in trying to protect their power and privilege, as indicated by a suit filed regarding funding of charter schools that seeks to erode the state’s school choice options.



An alliance of regressive forces, school boards and teacher unions, will argue in front of state district court that, essentially, certain kinds of charter schools are ineligible for funding through the main mechanism of apportioning state financial support to public education, the Minimum Foundation Program. They argue that some types, roughly 25 schools drawing $60 million from the over $3 billion distributed, are not “public” schools and not run by a school district of some kind. Therefore, they claim the MFP is ineligible through which to channel money.



This echoes the decision last year where the Louisiana Supreme Court determined that MFP money could not go to funding the scholarship voucher program that pays parents a chit that can be used at a private school, as it said the purpose of the MFP was for public education. And even as this logic provides a rationale for a suit on this basis, it also provides the grounds to reject it absent a very activist role on part of the judiciary.

30.9.14

Myth vs. fact in LA health care benefits debate

At least the gripe session about changes to health insurance benefits of state employees, retirees, and some school board employees didn’t drag the entire Louisiana House of Representatives back, just its Appropriations Committee, and some useful information did come out about the issue. Which makes this as good as any time to reveal myths that for political reasons are being circulated about it.



In short, three years ago the fund that maintains reserves, which is the excess of monies paid in from premiums from taxpayers (typically 75 percent) and clients (typically 25 percent) over expenses was around $500 million. The Gov. Bobby Jindal Administration then decided to cut premium rates a total of 9 percent. This meant both ratepayers and the state paid less, the latter being able to use tens of millions of unused dollars in the past two budget years for other purposes. It also opted to privatize claims administration to save on bureaucratic costs. While that went into effect this year, rates also were increased 5 percent, and pharmacy benefits changed a couple of months ago that increased costs to some users. Starting next plan year (Jan. 1), while premiums are not proposed to increase, non-pharmacy benefits will change that likely means in the aggregate clients will pay more in health care costs, because of changes to co-payments, deductibles, and covered services. Meanwhile, rising costs of health care with lower premiums have put the reserve on track to go close to zero by the end of the fiscal year (Jun. 30).



Some politicians and special interests have seized upon this series of events to put forward dubious claims, none of which are true:

29.9.14

Shreveport campaigns should include sales, privatization

Whoever the next mayor of Shreveport will be, that person will have to face and will need to solve a capital projects crunch that shows no signs of abating, because of sins of the past.



This spring a report by the city pointed out the dire straits in which the city finds itself in this election year. It highlighted what it claimed were $1.5 billion in needed improvements, but naturally not all of these items are of genuine high priority and necessary. For example, an intelligent traffic system certainly would ease congestion, but it’s not a life or death matter, especially when it could cost as much as $60 million.



But clean water with a federal mandate is another matter. The most pressing concern on the list was the estimated $342 million needed to be spent over the next dozen years to rehabilitate a city water system that has been crumbling for years as it spent precious dollars on things like a convention center, hotel, and sludge pits, the effects of this disrepair drawing the ire of the Environmental Protection Agency. A consent decree between it and the city that was hammered out late last year means the city must start spending about $34 million a year on this beginning in 2015.

28.9.14

Alexander right to support performance measures


As the federal government moves towards completion of a ratings system for higher education, Louisiana State University System President and Baton Rouge campus Chancellor F. King Alexander has become one of the louder advocates in favor of such a plan, last week penning an opinion piece praising the concept and often quoted on the matter. Past a certain point it’s a good idea, but up to that point and no farther it becomes an exercise in self-interest for academia.



Early in his second term Pres. Barack Obama shook up the insular world of higher education by proposing that federal aid to students be tied to some performance measures, in some ways like the system that states like Louisiana operate in terms of funding directly their state colleges. Since then the overall reaction within higher education has been negative, but pockets favorable at least to some changes have emerged, falling along two particular fault lines: whether the institution is for-profit and whether the institution is public, with for profit schools the least supportive and public schools the most, relatively speaking. This is because, as Alexander has implied, for-profit schools with disproportionately higher consumption of federal aid dollars – these for institutions and students now eclipsing federal discretionary spending on housing and community affairs, international affairs, energy and the environment, and transportation combined – but lower completion rates makes them “bad actors” that cast a negative view over all of higher education.



Even so, public schools have given lukewarm at best acquiescence to the idea, mainly because they are torn in the purposes that the ratings could perform. There seems consensus among them that they could live with tying simple metrics such as completion rates and proportions of graduates employed being reported and used for accountability purposes, even as some also want greater complexity added to any such index created, such as a measure of “readiness” where scores are adjusted favorably for a school the higher is the proportion of presumably less prepared students they admit.