Thursday, April 3rd, 208 Baton Rouge, Louisiana. STAND UNDER THE ARCH TO EARN THE BIG BUCKS IN STATE GOVERNMENT How do you put a dollar value on the worth of a public official? That's the issue being debated in the Baton Rouge State Capitol this week. The new Economic Development Secretary is asking approval for a salary of $320,000 a year. His assistant is requesting a salary as deputy secretary of $235,000 a year. These amounts are significantly above what other economic development directors are making throughout the South. So how do you justify such large increases? Is such a high salary a "Hail Mary pass" in a desperate effort to try to do some catching up economically in Louisiana? Or is there a sound justification for paying the state quarterback for economic development that kind of money. And how about this idea? Shouldn’t receiving such large salaries be based on results? LSU football coach Les Miles will pocket some three and a half million dollars this year, making him one of the highest-paid football coaches in the nation. He received such an enormous salary package based on results. It's the old adage that you get what you pay for, and with Miles, Louisiana ended the football season with a national championship. Stephen Moret, who is requesting this major salary increase, says he will work seven days a week. But a lot of people work that hard. Should time and work be the only criteria in paying public employees? Why not pay the governor, the secretary of economic development, the superintendent of education, and a cross-section of other public officials that directly affect our lives, based on a scale of how well they perform and what results they achieve? It seems like someone is always giving the re-assurance that comes from the bogus public versus private sector comparisons. Fortune 500 CEOs make on average $10 million. So some would argue that paying the Governor of Louisiana $125,000 a year to oversee a $30 billion enterprise is a real bargain! But what about results? Experimentation with performance pay in the public sector is on the grow. A New York City charter school is promising to pay teachers $125,000 a year, plus bonuses based on classroom and schoolwide performance. Sure, this is a lot of money, but those in charge are looking for a significant increase in student performance levels. Bottom line -- results. All this aside, the heart of our query is about pegging the pay of the governor and his top assistants to performance. I would surmise that most voters in Louisiana would think it's a good idea, but how do you do it? When you talk about results, it is certainly easier to define in the private sector. Results are measured in the stock price of a publicly traded company or by profit in any other company. The more the company makes, the more its managers can earn. But can you create an accountability and production index in government? …
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Moret says superfund needs millions more To date, the talk of Gov. Bobby Jindal, and to some extent his actions, has been great on economic policy. He has said he wants to make Louisiana more business-friendly with the ultimate step being reduction, if not elimination, of income taxes both individual and corporate. He has started to back that up with the elimination of three nuisance taxes on business in the previous special session. But in all of this, he seems to have the same curious blind spot that did his predecessor in that, according to his premier budget, it’s necessary to prefer big game hunting than casting bread on the waters to achieve economic growth. Jindal’s Secretary of Economic Development Stephen Moret is the point man on efforts to get $307.1 million of nonrecurring surplus funds dumped into a fund set aside to attract large employers which already has a $140 million balance. Both in practical and philosophical terms this allocation seems unwise and, in a related question, begs whether Moret is right for the job especially given his salary demands. Moret claims the fund needs more money because other states are doing it, particularly large projects may need it, and the present balance could be gone after landing a project. It is possible that the increase could lure a project whose return to the state in terms of tax revenues could exceed the amount give up over the long haul, but, congruent to the theme of Jindal’s that proper priorities in spending will promote economic development, it’s hard to argue this is the right expenditure at this time. The Jindal Administration itself forecasts budget deficits beginning next year, while any benefits from landing a project would be years down the road. It would appear much wiser to take this money and put it into the Budget Stabilization Fund to draw upon in the predicted upcoming lean times. Conversely, the money should not be spent on more capital projects as some legislators suggest; a bill to take care of that was passed during the special session that will shirt around $350 million year to transportation projects annually. Further, as a philosophical matter, with this Jindal seems to prefer the strategy of bagging a big employer not in Louisiana as opposed to broad-based, general tax relief for all who already are here. Because of the concern for future deficits, while this money now should not be used for tax relief, saving it can set the stage for this use in three years, enabling Jindal to meet his goal of income tax cuts. Such cuts would be the single most effective economic development tool for the state. If it’s Moret, an early and instrumental Jindal backer in the gubernatorial campaign, who is driving economic development fund strategy, he needs to come to understand there are better uses of the funds for economic development purposes. If he doesn’t grasp this, his employment must …
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The Origins of April Fool's Day Political watchers on both sides of the Red River were stunned by a series of announcements by local politicians that threatened to turn upside-down completely the political landscape of Caddo and Bossier Parishes and their principal cities Shreveport and Bossier City. At a news conference jointly scheduled by leaders of the parish and city governments, not only did these officials promise sweeping new policies to be introduced, but an entirely new form of government that essentially would abolish their present forms. The conference, held at the Shreveport Convention Center, brought smiles to the operators of the city-owned facility who said the big crowd attending would assure that the Center would at least break even financially for the year. The new form of government would make the two parishes and all their municipalities federative in nature, which some power retained by each unit but with larger decisions made by an elected assembly with representatives from each unit. “All our governments have concluded that local government is too fragmented and by working all together, we can provide more and better services to the public for reduced costs,” said Shreveport Mayor Cedric Glover. “I’ve been an elected politician all my adult life,” he noted, and he said the cost savings by eliminating the number of area elected officials to one-fifth the current amount and including the elimination of his job “would be a fitting end to my political career.” Bossier City Mayor Lo Walker saw this change as an extension of cooperation between the cities. “This is the logical culmination of the extensive cooperation our cities always have enjoyed, continuing our tradition of never trying to do things to one-up the other, never acting as either had a chip on its shoulder about the other.” Walker then announced to celebrate this spirit of togetherness that Shreveport would be allowed to annex the Louisiana Boardwalk (minus the parking garage which, since Bossier City paid for it on the basis of being a public convenience provided by government, would be turned into a public skate park) and incorporate it into Shreveport’s Red River District to assure the latter’s success. Walker also said the CenturyTel Center would be sold. “We have no need of boondoggles that lose taxpayer dollars,” he explained. “We’ve already heard from Shreveport that it will buy it to house recreation programs that once were conducted at the YWCA.” Parish leaders also gave their unqualified endorsements to such a plan. “Let’s face it, Caddo Parish is dominated by Shreveport, so why are we [Caddo Parish government] here?” commented Caddo Administrator Woodrow Williams. His Bossier Parish counterpart Bill Altimus stressed the increased potential efficiency, noting that instead of trying to hit up the citizenry for increased taxes to fix roads or hiring lobbyists to squeeze money out of the state and federal governments, with local governments now together on this and boundary lines to be erased, long-delayed projects like the parkway …
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Jindal pushes lawmakers to pass "work force development" changes If you’re looking for radical change coming from Gov. Bobby Jindal this legislative session, you can’t find much of it in from his State of the State address prior to the opening of the 2008 Regular Session. That doesn’t mean it won’t eventually happen, while it does indicate Jindal’s strategy of caution for his first year in office amid potentially hard fiscal times for the state in the near future. Jindal’s campaign last year promised three broad things: reducing the size and spending of government, empowering people rather than special interests, and shifting spending priorities. What he plans, according to things like his budget, to serve up this session is little of the first, some of the second, and more of the third – but you couldn’t tell from his speech which concentrated on priorities only, and the uncontroversial items at that. Best exemplifying shifting priorities is the signature item intended by Jindal, workforce development, more perestroika than anything else the most radical change of which is dismantling the state’s Department of Labor into a more decentralized system, and some changes to education delivery. But nothing was heard concerning related items already released by his administration that are much more controversial, such as merit pay for teachers and pumping over $300 million into a fund to entice large-scale employers. Some glimpses or far-reaching change did sparkle throughout his message. Using education as an example, Jindal discussed things such as a “teachers’ bill of rights” and laws to increase penalties against teacher assault. But mostly he touched on technocratic issues, making government work better, and not much on announced policy changes that would shift power to people, such as increased access to private schools that also will improve public education through competition. So Jindal mostly played it safe in his address, championing popular items or saying he would make government work better which nobody is against. This continues the debate about Jindal the leader: will he truly lead the state in a different direction, or just do a better job in directing the state to a place not very different from what we have now? While factors such as looming future deficits as federal recovery money peters out and fixing spending difficulties introduced by former Gov. Kathleen Blanco do constrain what Jindal can do, on its surface this address seems to indicate the latter. With that in mind, in keeping with my habit of grading these efforts, I’ll give him a B-. But for that grade to go any higher in future years, or even to prevent it going lower, we’ll need to hear more about empowering people and reduction of government even if he can get government working better. Because when government takes resources from the people and uses them in places it shouldn’t be, how well it does that is entirely a moot point. (If you'd like …
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Thursday, March 230, 2008, 2008 Baton Rouge, Louisiana PERCEPTION AND SUBSTANCE ETHICS AND INDIA The Louisiana legislature just completed its first special session under newly elect Governor Bobby Jindal. “We batted a thousand and set the gold standard when it comes to ethics,” ballyhooed Bobby Jindal. It was more like a double rather a home run, but there is little doubt that the Jindal team got off to a good start. Despite all the good government group claims that the public was up in arms and deeply enmeshed in the minutiae of the various ethical reforms proposed, what took place was a more general effort to deal with perception. The average voter was not so agitated about amounts of disclosure or spending, but was more concerned with moving from self interest to public interest. The new Governor can justifiably declare victory. But he needs to remember that any new rules of ethics involving public officials are only a part of the “procedure” of running government. The.rules of how you play the game. New ethics laws give the Jindal gang a foundation on which to build their legislative agenda. But in the final analysis, results will be measured by success in national rankings on job growth, educational reform, affordable health care, and a host of other “substantive” issues that need to be the focus of the coming months in the state capitol. That’s not to undercut the new governor’s efforts of emphasizing ethics reform in his first time at bat. It’s a motherhood issue. Who among us is in favor of lobbyists showering fancy meals and footballs tickets on those who govern us? It was a smart way for the new the Governor to get off to a good start. Most of the new legislation passed with little or no opposition. So now it is time to get into the meat of governmental change that can produce substantial results. Here’s the problem. Any major reforms take time to bear significant results. Education, health care, job development all need years once major restructuring is put into place. Any new governor has to be careful of surrounding himself with people who believe change occurs in a moment of magic instead of a slow process of improvement. So what can Jindal do in the short term that can benefit Louisiana? Let me suggest he start with his unique strength…his Indian heritage. Anyone taking the time to monitor the world’s newspapers in recent months will have seen news articles galore discussing and analyzing how a deep southern state could elected a young Indian American as its new governor. Jindal’s victory has been the front-page story week after week in newspapers throughout India. So, you ask, what’s so important about India? Simply put, it has become the fastest growing economy in the world. The investment firm of Goldman Sachs recently released a study indicating that the Indian economy could well surpass that of the United States by the year 2043. Did you know that 28% of …
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Jindal donor got first contract The Gov. Bobby Jindal express tries to crank itself up again for the regular session after he pretty much got what he wanted in two prior special sessions. On its eve, we also got a reminder that there are still a number of people opposed to his conservative, reformist agenda who are desperate enough to try to create a non-story to slow it down. A journalist who has shown past animosity towards Jindal (as well as to those who dare criticize the media) reported that a freshly-approved expenditure would benefit the business of a contributor who not only gave Jindal the maximum $5,000 contribution in his campaign, but whose companies in which he had an interest did so, as well as apparently several of his relatives who gave smaller amounts, or who gave to an organization associated with the state Republican Party which expended some funds on behalf of Jindal. The state Legislature appropriated $14 million to go to port expansion in Terrebone Parish. The donations were both legal and perfectly transparent, and the appropriation was deliberated and passed in full public view as well. Yet the article insinuates differently, using itself as a vehicle to trot out some tiresome Jindal opponents. One discussing the contributions and appropriations, state Sen. Joe McPherson like a trained seal barks, “You’re talking about legal corruption.” As if McPherson is in any position to talk – scan through his campaign finance records all the way back to his initial 1999 run for office and one will find the nursing home operator has substantial contributions from that industry, people in that industry, and from people in and the medical industry as whole (before Jindal became governor McPherson had been chairman of the Senate Health and Welfare Committee), with labor unions finishing a strong second in contributions to him. (Of course, the article mentions none of this, nor of the $9,000 state Democrats gave him in 2007.) If McPherson finds this evidence enough to argue Jindal in involved in a form of corruption, then McPherson himself is awash in corruption. Then there are those who opposition to Jindal has them cast aside objectivity. This incident is “a smoking gun” sniffs one, and another calls it “legalized bribery,” ignoring the facts behind the series of events: the idea of the expansion started two years ago under former Democrat Gov. Kathleen Blanco and was spearheaded by someone who hardly was a supporter of the Republican Jindal, Democrat state Sen. Reggie Dupre. It was virtually complete by the time Jindal was in any position to exert any influence on it at all. Not only that, but if the deal seemed shady in any way, the entire Legislature could have killed it; instead, it approved it overwhelmingly. Finally, a related point of contention is that current laws – because of First Amendment rights as the article does point out – allow the kinds of …
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### Cable increases rates in Louisiana, again ### Cable sure picked some good timing to announce a rate increase, just days before the Louisiana Legislature opens its regular session with a couple of bills on tap to break the near-monopoly cable companies have on the provision of cable services. HB 869 by state Rep. Jeff Arnold and SB 422 by Sen. Ann Duplessis would allow the granting of cable franchises through the state and bypass most obligations and obstinacy heaped upon competitors to cable companies by local governments. By reserving the power to grant franchises to local governments, it has discouraged competition because of the start-up costs a local government can impose including fees that simply transfer money from cable consumers into the accounts of local governments for no other reason that local governments can do that. Having the state franchise providers can prevent discriminatory costs that have the effect of allowing cable companies to monopolize the service. A similar bill was attempted in 2006 and passed the Legislature. But among her most stupid moves, former Gov. Kathleen Blanco vetoed the bill. Election year 2007 seemed to stymie the bill’s chances, but it’s no surprise that New Orleans-area legislators Arnold and Duplessis are leading the charge in 2008 because New Orleans suffered a 43 percent increase in cable rates (courtesy of ### Cable) over the past eight years, well past the rate of inflation. Cable companies may respond that such rate increases have come as a result of expansion of service to individual household, i.e. more channels. But the most prominent point about these bills would be they would encourage other providers (as already are able to in many states) to come and provide on-demand service, where instead of being locked into a limited set of packages which is the cable company strategy, consumers can pick and choose which specific channels they want to have without having to pay for many they don’t want. These bills can expect severe resistance from cable companies and local governments – both extreme hypocrites on this matter. Cable companies successfully fought for providing phone service at the state level, yet they want to prevent phone (and other companies) from doing the same with cable. Further, they are aided and abetted by local government who can refuse to grant franchises to any other competitors and do so unless huge concessions are involved, because they see allowing cable companies to be monopoly providers as a conduit to pass money from consumers to their own treasuries. If not for Blanco’s stupidity, consumers already would have been enjoying lower prices and better quality. It’s imperative that one of these bills in pretty much the form they currently exist be passed and sent to a pro-competition Gov. Bobby Jindal finally to help out Louisiana telecommunications consumers. (If you'd like to have Prof. Sadow's column mailed to you, go to http://www.between-lines.com and click on …
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Thursday, March 27th, 2008 Baton Rouge, Louisiana PRIVATE OWNERSHIP OF ROADS AND BRIDGES? HEAVEN FORBID! A number of Jefferson and St. Tammany Parish officials were aghast last week over supposedly “secret negotiations" to sell the Causeway Bridge that goes to the North Shore across Lake Pontchartrain. When the state's largest paper, the Times Picayune, mixed the idea editorially, one elected official after the other fell all over themselves running away from even any talk of such an atrocity. "That is the most ridiculous thing ever heard in my life," said one Jefferson councilman. "I'm just flabbergasted that is even being considered," said another. The gang at the TP took the final blow by editorializing that "this bad idea can’t die fast enough." So why on earth would any public official even consider such an idea? Well, perhaps because the sale of roads, buildings, sewer systems and a number of other publicly built projects are being sold to private groups in more progressive states all over the country. New projects are regularly being bid out to private groups to either lease or own. It’s the wave of the future, not just in the U.S., but in industrialized countries worldwide. In Virginia, the major interstate south of Washington, DC is a toll road built by a private investment group. In Detroit, there is an ordinary four-lane bridge in the busiest commercial border crossing in North America, carrying one-third of all road trade — or more than $122 billion in goods a year — between the two countries. It is owned by one man and his privately held company. In a lengthy story appearing in Time Magazine last week, they reported that Texas has gone ahead and devised something new for the Longhorn State: their first privately owned and privately financed modern toll road. This week the Texas Turnpike Co. will start constructing a 223-mile, four-lane thruway from the Dallas area to Houston, At the same time the Sam Houston Toll Road Corp. will start building the first leg (Dallas-Waco, 83 miles) of its $2 billion 246-mile Dallas-San Antonio Thruway. Private contractors have agreed to build and operate these projects, spending several billion dollars, and even providing a $25 million upfront cash payment and sharing the revenue with the state. No state funds. Private operators. Private leasing. Airport rail links like the Chicago Skyway and the new California South Bay Expressway are examples of many privately owned toll roads in the US. Privately owned toll roads have been popular in Europe and Australia for years. In Chicago, Mayor Richard Daley auctioned off the city’s Skyway Transportation system for $1.8 billion. And right now, he's trying to sell Midway Airport for more than $3 billion. And take a look at Indiana. Facing a $3 billion transportation -- funding shortfall, Governor Mitch Daniels two years ago auctioned off the rights to operate the Indiana toll Road to a private group for a mere $3.85 billion. Estimates have been made by the US Department of Transportation …
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N.O. hospital size to get review Health care redesign into an efficient, sensible system for indigent care finally may be on the way in Louisiana, signaled by the Gov. Bobby Jindal Administration’s desire to review specifications for a new Medical Center of Louisiana – New Orleans (temporarily renamed “LSU Interim Hospital”) rebuilt hospital. During his gubernatorial campaign last fall, one of the more prominent themes involved delivering health care in a more efficient manner – a crucial task since indigent health care costs are at about a billion dollars a year so better use of these resources could provide crucial cost savings as a predicted period of leaner state budgets loom. Yet barely a peep has been issued from Jindal concerning this issue since – until his Secretary of Health and Hospitals Alan Levine testified in front of a Senate panel yesterday. Levine indicated skepticism at former Gov. Kathleen Blanco’s plan to build a grandiose new “Big Charity” in his refusal to move forward immediately with that plan. Blanco had envisioned this replacement facility for the one damaged by Hurricane Katrina and was one of the cornerstones for the plan that essentially retained Louisiana’s inefficient indigent care system, unique among the states, that primarily funnels to a handful of large, state-run institutions money for this care. This contrasts with the approach gaining acceptance in the rest of the country, where public money follows the person who then, guided by program rules, seeks out appropriate care at any eligible institution, private or public. This approach, favored by the federal government, was rejected by the state which led to the federal government balking at providing $225 million for costs towards the hospital. Blanco then found a way to leverage other federal dollars into allowing the state to put up this money itself. But in doing so, she left the expenditure of it up to her successor Jindal who favors the alternative approach. Blanco and her allies ideologically prefer the existing charity hospital approach because it keeps money in the hands of state government, as they believe big government knows best how to make health care decisions for individuals plus this arrangement provides more jobs to distribute. By building as big as possible a new Big Charity, it would commit the state to continue with this system in order to make sure its beds would be filled. The most enthusiastic partner in this attempt is the Louisiana State University system which runs the charity hospital system and thereby gains the resources and patronage opportunities from it. Levine’s statement that a review may take a couple of months probably indicates the Jindal Administration is going to reject the palatial version of Big Charity, opening the gates for a money-follows-the-person system to be instituted. Since the indigent won’t be herded into state-run hospitals for care, there would be less need for large facilities. Reformers have argued that the LSU-run hospitals should really be …
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McCain's Iraq trip a mistake: GOP critics Enough already with the “Jindal for Vice President” talk. Political liberals and unthinking desperate conservatives may wish it to happen, but Lousiana Gov. Bobby Jindal is too smart and too caught up in his present job to make it a reality this election cycle. Jindal’s 36 and been governor for a little more than two months. While he’s gotten a lot out of two special sessions, and there are risks in not striking while the iron is hot, he must know his upside his far higher to be wasted on a quest which politically will bring him little. Some conservatives stump for him on a ticket with waiting GOP presidential nominee Sen. John McCain because he is an archetypical and young conservative contrasted with McCain’s moderate sympathies and McCain would be the oldest ever inaugurated to a first term as president. It also might counterbalance with a member on the Republican slate of an ethnic minority group (even as Jindal himself never advertises that fact) a Democratic ticket that could have such a person, or a female, or both on it. But taking a vice presidential nomination not only has no upside now for Jindal, it damages his long-term political potential. If the GOP wins, Jindal is relegated to at least four years of nothing. He’ll have little opportunity to display governing skills while other conservative politicians will rack up these credentials. If the GOP loses, he will be criticized for being too ambitious and not enough of a “savior” for the party, and immediately make him a target of others who share future national ambitions – even if he outshines McCain during the campaign. Additionally, Jindal running now would be like uprooting a productive plant before it reaches maturity. With at least four years as governor, Jindal has ample opportunity to demonstrate governing skill and the superiority of conservative ideology through the actions he takes if he implements a conservative agenda. This is why liberals already are working overtime with unconvincing arguments to discredit him precisely because he can effectively demonstrate the bankruptcy of their ideas. Add to this that Jindal seems passionately involved in turning around Louisiana – which promises a massive amount of political capital if he has some measurable success – that will be a longer-term project in any event, and there’s just no way Jindal is going to assent to such a placement. Finally, the few individuals who used successfully the vice presidency to get to the White House were themselves distinguished politicians of extended service, so if Jindal has higher ambitions he knows that spot now really does him no political good. It would be flattering, and Jindal’s governorship could go sour which could mean he’d never get such a chance again, but Jindal won’t go for this plan. So people are just wasting their breath bringing it up. (If you'd like to have Prof. Sadow's …
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