Between The Lines

Jeffrey D. Sadow is an associate professor of political science at Louisiana State University Shreveport. If you're an elected official, political operative or anyone else upset at his views, don't go bothering LSUS or LSU System officials about that because these are his own views solely. This publishes five days weekly with the exception of 7 holidays. Also check out his Louisiana Legislature Log especially during legislative sessions (in "Louisiana Politics Blog Roll" below).

28.1.16

Details good, overall bad in higher education report

Because it ignored the elephant in the room, the higher education transition team report prepared at the behest of Gov. John Bel Edwards makes it irrelevant to any serious discussion about long-term policy in that area.

Much of the minutiae within in made sense. It discussed the mediocrity supported by the Taylor Opportunity Program for Students, and recommended either raising its standards or capping award amounts, the latter an approach sent to former Gov. Bobby Jindal’s desk that he vetoed. It asks to continue building upon former Jindal and Department of Education initiatives to reduce bureaucratic impediments and to align better educational delivery with state needs. It recommends targeting resources to areas of excellence, champions bureaucratic realignments to promote efficiency and better delivery, and advocates helping institutions realize more self-generated revenues from their intellectual products and activities. Tactically, it makes many sound and few unsound points.

But it has two fatal flaws strategically that almost entirely moot its salutary aspects. First, it remains captive to the illusory notion that reductions in state funding act as a “disinvestment” into higher education. Factually speaking, the trend of the last several years where fewer state dollars went into higher education replaced mostly by self-generated revenues (mostly tuition and fees) better represents an overdue rebalancing that formerly underpriced higher education to its consumers and demanded over-subsidization by taxpayers that has left the higher education spending only around $40 million fewer a year than when Jindal took office (although with inflation factored in the decline reaches 13 percent).

Kennedy's running puts him at front of Senate field

The entrance of Republican Treasurer John Kennedy into the Senate contest this fall changes everything about that race.

It also elicits a sigh of relief from Democrat Gov. John Bel Edwards. Kennedy would have posed the strongest challenger to an Edwards reelection, and probably would have defeated the incumbent had the election occurred to day. The treasurer winning the Senate obviously removes that threat, which would be reduced by his running and failing to win it, so now Edwards is a happy camper as a result of Kennedy’s choice. Kennedy likely headed in this direction spurred by his two past failures to snare the office (the first time as a Democrat) and at age 64 he would have to wait three more years to run for governor while not getting any younger.

His entrance makes him the best option at present for Democrats, who do not yet have a declared candidate. Of the Republicans running, only Anh “Joseph” Cao has the potential to have prompted significant crossover voting from Democrats, and, given the vast gulf in experience and publicity that Kennedy has earned over his 17 years as Treasurer and from that perch sniping at existing policy-makers for what he sees as a lack of fiscal probity, Cao as a Republican alternative for Democrats shrivels into insignificance. Kennedy would steal votes from any moderate Democrat that dares to run (the only Democrat name mentioned that comes close to this near-mythical creature is state Sen. Gary Smith), pushing into mathematically impossible territory the chance of such a candidate winning a seat.

Democrats drawing wrong lessons from Edwards win

It looks as if Louisiana Democrats may have learned the wrong lesson from the upset win last year by Gov. John Bel Edwards from the names popping up as potential Senate candidates this year.

Edwards won on a fluke. He chose to compete for a statewide office more insulated from the national politics of the Pres. Barack Obama era that unapologetically illuminate Democrats as representatives from a party well out of the mainstream, with an electorate tilted more to Democrat candidates, and a race that attracted Republican candidates who put personal ambition ahead of supporting the right agenda for the state that led them to sabotage out of spite the one among them that received the most votes.

Do not bet on that combination happening for the Senate contest. With any Democrat running for office more easily tied to the party’s extremism and an electorate more favorable to Republicans than for state offices, any Democrat to have even a ghost of a chance must have centrist views – especially in that none of the Republicans running have built up the fear and loathing many in the GOP had for Sen. David Vitter, defeated by Edwards in a runoff. It seems unlikely that they will repeat the circular firing squad of last year that left out Edwards, who as a result of that sideshow managed in enough voters’ minds to separate his very liberal voting record from an image of himself built on God and guns.

Policy-makers increase size of pension time bomb

The clock keeps ticking, but the mentality that has produced one of the nation’s largest unfunded accrued liabilities in Louisiana continues, increasing the chances for a rude blast going off in 2029.

That’s when the conditions of Art. X, Sec. 29 of the Constitution come into play, which mean that the 13 state and statewide retirement systems must not be actuarially under-funded – that is, the systems each must have enough money on hand to pay for all forecast retirement benefits of their present members and retirees – by an amount generated prior to fiscal year 1989. At present, in the aggregate these have only about 60 percent of that money available, with around nine-tenths of the unfunded accrued liability of roughly $20 billion coming from the Teachers Retirement System of Louisiana and the Louisiana State Employees Retirement System (any subsequent UAL also has statutory limits on reductions for each system in a relatively smaller aggregate amount, with 2038 as the last-established deadline among these).

Because of the imperative, each year the state must pay extra – beyond the statutory limits required for each plan in each system – into pensions to make up for this UAL. That adds up to around $1.5 billion extra footed by taxpayers annually just for these two systems, which includes any local taxes paid as well concerning TRSL as about 90 percent of its members fall under school district jurisdiction, with the remainder under state jurisdiction covering higher education employees (not part of the optional retirement plan) and directly state-run elementary and secondary school employees.

The Advocate column, Jan. 24, 2016

John Bel Edwards governorship off to a rocky start
http://theadvocate.com/news/opinion/14641197-123/jeff-sadow-new-governor-off-to-a-rocky-start

Links:

https://www.businessreport.com/article/news-alert-holden-says-told-obama-10-bottleneck-not-edwards

http://www.theneworleansadvocate.com/news/14578419-128/democratic-state-legislators-vote-for-republican-speaker-angers-party-activists

http://www.nytimes.com/2016/01/15/us/new-louisiana-governor-john-bel-edwards-is-off-to-a-volatile-start.html

http://www.houmatoday.com/article/20151203/ARTICLES/151209892?p=all&tc=pgal

21.1.16

Letter distorts truth concerning nursing home largesse

When you’re making over $250,000 a year, you’re going to try to make it appear that policy that benefits members of the organization paying you looks good, even if you have to distort and falsify the truth as Louisiana Nursing Home Association executive director Joe Donchess did recently in a letter to The Advocate about a column of mine.

Part of the piece pointed out the privileged status of nursing homes in Louisiana and how that would impact Medicaid spending in light of Gov. John Bel Edwards’ declaration to expand Medicaid. It noted:

A constitutional amendment passed in 2014, for which Edwards voted as a legislator, exacerbates the looming crisis. That change essentially locked in the reimbursement rate for privately-operated nursing homes, adjustable upwards by inflation, despite Louisiana’s institutions having among the lowest occupancy rates of the states. Worse, the formula used pushed up the rate artificially by including non-Medicaid patients and also pays operators over $15 million annually for empty beds due to over-capacity ….

Edwards includes needless tax hikes in deficit plan

Almost three years ago he railed against a plan that would have given Louisiana in the aggregate the highest sales tax in the country. During his run for governor, he said he would not raise taxes and decried the use of “one-time” money to balance budgets. Yesterday, Democrat Gov. John Bel Edwards, eight days into office, declared he wanted to do all of the above to address this fiscal year's predicted budget deficit.

Of course, Edwards disclaimed all responsibility for the about-face in his economic policy, alleging that he had not known of the mounting difficulties with the fiscal year 2016 budget, which his administration now asserts to be $750 million in the red. Never mind that as a legislator Edwards had access to all of this information, which comes to the Legislature on a monthly basis, that should not have made for any surprise of an escalating deficit and leaving plenty of time to start planning.

Naturally, as part of that he indicated the real responsibility for this lay with his predecessor former Gov. Bobby Jindal. He contended that Jindal’s budgeting tactics – which he ratified five out of eight times as a legislator – brought matters to this head, implying he bore no blame for whatever he suggested. He then laid out a plan that, at the very least by its verisimilitude to Jindal’s budgeting, makes them kissing cousins.

Unserious fiscal paper puts agenda before value

Just as inevitably the first couple of transition team reports for Gov. John Bel Edwards looked to lead the coming bunch in sensibility, when it showed up the one concerning fiscal matters kept its promise as the least serious of all to come.

You know when a document thanks several organizations and individuals for expertise in its report and singles out by name, among the government agencies and interest groups and academicians, the rancher, mega-landowner and royalty recipient, and insurance agent Public Service Commissioner Foster Campbell, that the proposal has diluted its gravity with politics and ideology. Campbell, who has no expertise in economics or fiscal matters but who led the group as a co-chairman, likely got the mention because of his herpetic pushing over the decades of the tired and discredited notion of an oil processing tax to replace the severance tax that therefore naturally had to find its way into the document.

The facile populist belief behind it maintains that some alleged surplus profits of oil companies plus the 98.5 percent of the country that resides outside of the state would pay for it, forgetting that state concerns consume a much higher proportion – at least 28 percent – of the processing maximum and that the tax gets passed along to consumers. That such a measure would go into effect in era with low worldwide prices putting on the ropes the industry in Louisiana and, as a result of the soft market, excess refining capacity brimming outside the state makes it not just a stupid idea, but absurdly so.

Preposterous Obamacare speculation flees reality

Sometimes the media go with a story just so far detached from reality, one must marvel at their obliviousness. Louisiana readers received one such treat last week after Democrat Gov. John Bel Edwards unwisely decided to expand Medicaid.

Just after that happened, Pres. Barack Obama visited the state and there proclaimed that he would authorize the period in which the federal government picks up all reimbursement costs of expansion (Louisiana still will have to fork over several million dollars extra the first half of the next fiscal year to cover administrative costs) to the first three years of it for a state, not in the 2014-2016 period as the law reads. As it currently stands, Louisiana would receive total reimbursement for care costs only during the first six months of its next fiscal year.

Keep in mind that Obama typically operates in a dictatorial mode whenever Congress insists on following the Constitution in its power to make law by refusing to pass Obama’s requests; he responds by issuing extra-constitutional executive orders and signing statements to attempt to bypass the rules by which this representative democracy exists, so he has gotten into the habit of saying he will make things happen that constitutionally he cannot. The fact is, he can promise only to put this idea into the budget for the Republican-led Congress to do with it whatever it sees fit.