Senator leaves Legislature to take new education job

(note: headline has his former office wrong)

Louisiana's Department of Education passed out another golden parachute to a state legislator, the beneficiary this time being former state Rep. Don Trahan who becomes the second glad-hander in a new position with responsibility to communicate to business and public interest groups. Earlier this year, former House Speaker Joe Salter got a similar gig at similar six-figure salary to press the flesh with policy-makers as the organization's chief lobbyist.

This is not to question Trahan's acceptance of the job as offered as his legislative record indicates he is knowledgeable and sensible concerning the field of elementary and secondary education. (And whether a vetoed pay raise for legislators would have kept him in the elective job is questionable - to his credit Trahan voted against it.) He appears to be a good communicator as well, as those who observed his running of House Education Committee meetings in his sole year of serving as it chairman would have noted.

What is questionable is the personnel and spending on them priorities of the Superintendant of the Department, Paul Pastorek, who has a penchant for throwing around big salaries for him and others on the political inside. He basically gave the Legislature's joint budget committee the Bronx salute when he said if they did not give him a huge pay increase (which he already had been getting prior to legislative approval) over his predecessor that he'd take a hike. (Pastorek had served eight years on the Board of Elementary and Secondary Education, his employer, on whom four members still sit who served with him, and was hired without any kind of national or public search.)

Trahan's new job sounds like exactly the kind of thing that Pastorek himself should be doing. Of course, one of Pastorek's justifications for compensation that could reach nearly $450,000 annually by 2011 (for example, nearly 250 percent higher than his Texas counterpart who controls a budget over six times Louisiana's and over four times the number of schools) was that he was overstretched in his job, so perhaps now his salary should be reduced since he's got this new help. (Actually, there's already a Director of Communications in Pastorek's executive office, so why is the new position even needed?)

Meanwhile, state test scores continue to muddle along with, after a period of no improvement, elementary scores as a whole slightly increasing but …
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Storms surplus nearing end

Testimony taken by Louisiana's Revenue Estimating Conference for its official forecast due in a couple of months confirms the recovery bubble nearly is over, and should warn that now is the time to put state finances in the position to survive the long-term effects of natural disasters and decades of inferior state fiscal policy.

With Louisiana recovery spending financed by the American taxpayer approaching $150 billion as a consequence of the 2005 hurricane disasters (and potentially a couple dozen more billions that could be thrown on to the amount courtesy of the 2008 storms) pumping an unprecedented bonanza into state coffers, the flip side of course is that the state lost economic productivity from the storms that now is getting translated into drops in both personal and corporate income totals. Another short-term factor will be the income tax cut kicking in next year.

While oil prices will continue to provide some cushion, by fiscal year 2009-10 deficits will loom at current revenue levels. Further, time must be bought for the economic benefits of the tax cuts to kick in and to accomplish other restorative tasks like health care spending restructuring in the state. Finally, national forces such as an economic slowdown due to consequences of government overregulation of the mortgage industry and future potential pitfalls such as bad policy that could come from Democrat Party control of the White House and Congress need factoring in Louisiana budgeting decisions.

With that in mind, a budget surplus on the order of at least $500 million appears likely for the concluded fiscal year, and maybe a higher amount for this fiscal year. If so, given current levels, most of the 2007-08 fiscal year surplus should be pumped into the Budget Stabilization Fund to ward off a 2009-10 deficit (one third of the fund could be used to fund current recurring expenditures, which would be close to that $500 million figure, every two years). Perhaps the remainder could be used for a very few vital capital projects around the state, but any surplus for this the 2008-09 fiscal year should be first deposited into the fund, then used to pay off debt, freeing interest payments for future use.

Stopgap measures such as these can buy the necessary time by cushioning the budget for tax cuts engineered and/or eventually supported by Gov. Bobby Jindal to kickstart the economy and bring in more revenue to government. As long as the state saves this bonanza and doesn't go on a spending spree for capital and other nonrecurring items any looming crisis can be avoided.

(If you'd like to have Prof. Sadow's …
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Race for justice has new landscape

As has been argued previously, Louisiana would do well to move away from elected state judges to a system where executive appointments with legislative oversight occur, similar to the federal system. But that's not going to happen anytime soon, if at all. Therefore, one problem that would remain is the campaign finance apparatus that some argue can influence a judge's decisions. Yet one proposed solution would make the situation even worse.

One issue that has cropped up in the 1^st Supreme Court district contest is whether some system of public financing of judicial candidacies should be enacted. While a study that argued there was association between contributions received by the state's Supreme Court justices and their decision-making was hampered by methodological problems, the theory that this could happen certainly is valid. A study issued by one of the leading legal professional association recommended public funding as an alternative.

One potential model for public financing would be North Carolina's, where with initial demonstration of some ability to raise funds, after that threshold public financing would take over for the general election. Small donations have risen while overall totals spent have dropped in half, and it enjoys public support.

But regardless of procedure, the basic fundamental error in public financing is it uses government dollars to fund speech and abrogates the right of free speech when limits are placed upon how much can be spent if imposed on candidates. At the federal level this past term the U.S. Supreme Court made that very statement, although state elections can be governed differently and Louisiana could amend its Constitution to permit it.

Yet even this aside, regulating political speech in this way harms the process and creates a solution more intrusive than need be. Judicial contests in particular are the lowest-information races that make it difficult on voters to understand candidate preferences and differences. Artificially determining the amount of money that may be spent by candidates prevents fuller amounts of data about candidates from being dispersed by campaigns, cheapening the process and disserving voters.

Better, there is a solution that permits dissemination of greater amounts of information without treading on free speech rights - recusal requirements. The law could be changed to mandate that if a case has any connection of a donor (of at least a certain amount in a certain time span) to a sitting member of the judiciary - the donor himself, his family, or any business …
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Plan to reduce DHH spending put off

Surely there is something more to the Joint Legislative Committee on the Budget's not approving cost reductions deemed necessary by Louisiana's Department of Health and Hospitals, potentially leaving a deficit in the state's budget that only will grow without state action.

Secretary Alan Levine as required by law noted the Medicaid account deficit and reported it to the Committee, along with suggestions to deal with it. His recommendations to reduce the deficit by $79 million of the $81 million shortfall were to forgo starting a pilot program to revamp service delivery to the indigent, end duplicate payments to nursing home patients with hospice care (because hospice care largely duplicates the care in the nursing homes), end duplicate payments to hospitals, end overpayment on some services to hospitals (because of current rules allowing payment for services not clinically indicated by national criteria), and to rearrange rural hospital funding.

Senators on the panel thought it unwise to alter financing for rural hospitals, arguing that their uncompensated care dollars would be inappropriately cut. But on this and other items, state Rep. Jim Fannin, chairman of the House Appropriations Committee (this joint committee is made up of key individuals from legislative leadership and money committee members), wanted no action because he wasn't sure the deficit figure was correct.

While caution may be warranted on the rural hospital financing changes and whether to initiate the pilot program now, it seems odd that identifiable wasteful state spending in the form of duplication or overcompensation should not be objected to and therefore allowed to continue, regardless of the figures. Why not act on those items and leave the other two for that further study, instead of inaction on all to allow waste to continue?

This makes one wonder whether there is more than meets the eye to all of this. Is there a push by hospitals and nursing homes, two of the most powerful sets of interests in the state and who have a large amount of their revenues coming directly from government, to stop this? As it would seem Louisiana taxpayers are on the hook for unnecessary higher expenses as a result of this decision, Fannin and others who supported this need to give an explanation.

(If you'd like to have Prof. Sadow's column mailed to you, go to http://www.between-lines.comRead More...

September 24, 2008

Thursday, September 25^rd, 2008
Baton Rouge, Louisiana

GREED IS GOOD IN LOUISIANA

The national financial crisis finds Wall Street and financial regulators scurrying for cover, and trying to find a quick fix to financial problems that have festered for years. It’s puzzling that there is been nary a peep out of Louisiana officials, particularly in light of the fact that lack of regulation of the very financial institutions creating this meltdown has been part of the culture of Louisiana regulators for years. Where is the outrage by Louisiana members of Congress? And why have Louisiana legislators failed to address a number of serious financial problems right here at home?

Oh you will hear that this is a federal problem, and there is not much which Louisiana officials can do about the financial meltdown. But even though there is plenty of blame to go around, at least in other states, there is a scurrying of effort to tighten the regulatory system that in recent years has acquired a laissez-faire mindset.

So can we get a simple explanation as to exactly what happened? Here’s a quick summary. In the old days (pre-1990s), if you wanted to buy a new home, you went down to your banker or savings and loan to submit a financial plan. A solid down payment was required, generally 20%, that you might have obtained by saving a little each month over a number of years. You had to show the bank or savings and loan that you had decent credit, and that you had a job. You had to have some income coming in. The financial institution would check out your credit, and if you qualified, then, and only then, did you become a homeowner. Your loan was approved.

That all changed in recent years, driven by Wall Street greed that required more churning of large blocks of money to create more fees to …
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Cassidy wants stations to pull Social Security ad

In the rough and tumble of politics and with the First Amendment in place, you can't ensure honest impressions will be conveyed about you as a candidate by anybody else. Then again, often candidates won't in their campaigning convey honesty even about themselves.

State Sen. Bill Cassidy, Republican opposing Democrat Rep. Don Cazayoux for reelection, has a legitimate quarrel with the incumbent over an ad by the latter that states, concerning Cassidy's support to privatize a small portion of funds for investing for Social Security, "His plan would cut guaranteed benefits." But as Cassidy has made clear "his plan" is to guarantee benefits already promised. Cazayoux's campaign is perpetuating a flat out lie, but one protected by our basic guarantee of free speech.

Rather than complain, Cassidy should cut his own ad pointing out Cazayoux's mendacity and tie it to a larger pattern of dishonesty - the mirage that Cazayoux tries to perpetuate that he represents the views of the majority of the district. The fact is, Cazayoux is the lapdog of liberal Democrat Speaker Nancy Pelosi. If there's some important legislation to be passed that is part of the liberal agenda, almost always she can count on his vote. The rest of the time, as a competent speaker will do, she'll take his leash off and allow him to cast a few votes here and there to allow him to inoculate himself as a faux moderate or conservative to try to stay in office, but make no mistake, Cazayoux (as he first demonstrated in the Louisiana House) is a fraud on this account.

But more specifically on this Social Security issue, while Cazayoux's criticizes, in concert with his southern Democrat playbook to shout the inoculating issues to the skies and ignore and obfuscate everything else he has no solutions or leadership for the coming funding crisis in Social Security that Cassidy addresses and addresses sensibly. Cazayoux's official statement on the matter is he "believes that Social Security is a trust between the generations and we should do everything we can to protect it. He is against privatizing Social Security."

That's it, no plan present - because he doesn't want to tell the public what he really will vote for, which is similar to what his other opponent, Democrat-turned-independent Michael Jackson stated he would do which is the plan supported by the Democrat leadership. They would raise taxes and force higher payments from some with no increase in benefits. It's unlikely Democrats would have enough guts to …
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