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Last summer, Shreveport Mayor Cedric Glover led a caravan to Baton Rouge, to lobby for legislation relevant to the movie-making industry that has proliferated in the past couple of years in the city. That he felt the trip necessary seems a testament to a lack on his part of planning or influence, or perhaps both, but, more importantly, as a protest against larger trends.
The journey came about because one of the legal incentives that has done so much to boost the Shreveport metropolitan area's filmmaking by law expires at the end of the year and area political and industry figures are concerned. The law allows a tax break that repays 40 percent, or up to $25 million, for movie industry building and renovation projects. More recently, a legislative panel heard testimony about controversial implementation aspects of the law.
Glover and others only publicly became concerned about this only in the spring, when they concluded that the non-fiscal nature of this year's legislative session precluded legislation directly renewing the credit. It will expire before the Legislature meets next year for its fiscal session. Thus, the only real way to get the law reenacted they figured would be through a special session and that was part of the purpose of the trip, besides trying to raise general awareness of the law and more broadly the movie industry in northwest Louisiana.
But Louisiana already has had two special sessions this year, memorably before the just-ended regular session, so why didn't Glover (a former legislator who voted on these breaks originally) and members of the delegation contact Gov. Bobby Jindal and ask him to slip in the item particularly for the second of those sessions, on the expenditure of surplus funds? Others were able to get some of their special items included in that call. In fact, with the exception of state Rep. Patrick Williams, members of the area delegation have shown little public enthusiasm for the renewal idea.
This could mean that Glover et al simply dropped the ball, realizing this credit was due to expire too soon for their liking only until it was too late. However, more likely the idea falters as it gets only a lukewarm reception from the rest of the state. The infrastructure portion of the credit potentially affects only a few areas of Louisiana, the metropolitan areas (the other part of the credit applies to non-structural aspects of a movie production and can be spread about more easily). There's no separate statistics for facilities and production but together in 2006-07Read More...
posted by Jeff Sadow, 1 month, 1 week, 5 days, 12 hours, 27 minutes ago
Given that Democrat Rep. Bill Jefferson has a tremendous legal cloud over him and the presence of the inspiring story of his challenger Republican attorney Anh "Joseph" Cao in the contest for the Second District Dec. 6, does Vietnamese Cao have a chance to defeat black Jefferson even in a district where half the registered voters are black Democrats, Republicans make up only a little over 11 percent of the electorate, and only a minority of the roughly 7.5 percent that comprise "other" race voters are Vietnamese?
Actually, if you go by the numbers, yes. We must recall that in the upcoming election that now Republicans will be able to vote, and few if any will vote for Jefferson, and that some substantial portion of the vote for his runoff opponent was an anti-Jefferson vote that could transfer to Cao in the general election.
Most Republicans are white, and the statistics show that blacks outnumbered whites nearly 3:1 in the primary, but only 2:1 in the total electorate. Further, Jefferson did experience some slippage among blacks in that primary vote. Looking at precincts (about 20 percent of the total) that were at least 90 percent black and less than 2.5 percent white, the Jefferson vote on average was 10.5 points less than the percentage of blacks minus the percentages of other races and of white, meaning only about 90 percent of blacks voted for Jefferson.
That noted, whether these race defectors would support an Asian Republican is another matter, but surely there are some that would as some of these district showed much lower supports rates for Jefferson, some only supporting him in the mid-60s range. More intriguing is the question whether the other race population will defect in much larger numbers. Analyzing the relationship between race and vote, while black percentage registration almost perfectly correlated to vote for Jefferson (positively, while about the same high statistics was noted for white percentage registration but negatively), the statistic for other races was a bout half as power and also negatively related to Jefferson vote proportion. This suggests a much more even splitting of the vote among these voters.
More intriguingly, Jefferson seemed to gain little white support in the runoff. Only about 4 percent of all precincts had at least 80 percent white and no more than 5 percent black populations, but of those, the Jefferson vote on average was only 5 percent more than the black population in the district. Again, partisanship may make some whites support Jefferson against Cao, but this suggests that, reversing the typical pattern, there could be more defection among blacks from Jefferson than willingness to support him among whites.
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posted by Jeff Sadow, 1 month, 1 week, 6 days, 5 hours, 2 minutes ago
Shreveport mayor among city leaders asking for auto industry help
With hat in hand, Shreveport Mayor Cedric Glover went to Washington to ask for (what is accurately termed even if he doesn't like it) a "bailout" for American auto manufacturers. Shreveport was home to one of the largest General Motors production lines in the country until sagging company fortunes cut its production by over half. Glover equated the request with the loan Chrysler received almost three decades ago which it paid back, but this is a bailout because it throws American taxpayer dollars at a situation made untenable by the greed of unions.
As in almost every commercial enterprise, personnel costs are the largest single component for the automakers, and it is union demands which have escalated total compensation to absurd levels that have made American companies noncompetitive compared to their foreign rivals:
- The average private sector worker earned $25.36 an hour in 2006 - $17.91 an hour in cash wages and $7.45 an hour in benefits such as pensions, paid time off, and health insurance. Autoworkers at Japanese plants located in the United States earn substantially more than this: between $42 and $48 an hour in wages and benefits. The typical United Automobile Workers member at the Big Three earned between $71 and $76 an hour in 2006 - almost $30 an hour in salary and over $45 in benefits
- Typical benefits include extraordinarily generous health care plans where a member pays less that $250 a year for family coverage, long paid vacations (15 -year employees at Chrysler got five weeks off in 2006), the JOBS Bank program that continues to pay almost all of a workers pre-layoff salary after their exhausting regular unemployment benefits that only recently was limited to two years, and "30-and-out" which until recently allowed all workers to retire after just 30 years service with generous benefits that means, for example, GM pays for three times the number of retirees than it had employees.
- As a result, every American buying an auto made in Detroit pays an extra $700 to $1,000 to support health benefits far more generous than most Americans receive, and hundreds more per vehicle to support these other freebies, whereas the same car made by a foreign manufacturer in the country would cost over a thousand dollars less.
It is this perverse transfer of wealth from consumer to unionized workers that is the main cause for an ailing domestic auto industry, and a bailout only would compound the problem by allowing subsidization of this inefficiency. Fortunately, this bonanza at consumers' and shareholders' expenses partially was reined in by some reforms in the past couple of years, but too late to stave off …
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posted by Jeff Sadow, 1 month, 2 weeks, 2 days, 11 hours, 44 minutes ago
Lawmakers brace for budget cuts
One idea Gov. Bobby Jindal has suggested as a way of dealing with budgetary inflexibility is to unlock state dedicated revenues. The idea should be developed into a broader review matching funding to purpose.
First, it must be understood that, even though the state took in around $30 billion last year, it had discretion to spend only about 30 percent of it. The other 70 percent is locked in a variety of formats. Some, approaching half of the locked amount, comes from federal grants to be spent on some legally-defined function. Others arise from some legal obligations of the state, such as repaying debt. Yet others are self-generated by agencies themselves, either through their statutory activities or through ancillary operations which also stay in the agency. Only the last of these essentially could be altered, as the state really can't violate federal and financial obligations without severe penalty, and that would create financial chaos as agencies creating "surpluses" would be raided and thereby discouraged from performing these activities (not that this hasn't been done before; in the past, revenues that exceeded expenses in the charity hospital system would be removed from the LSU system that runs it).
What Jindal refers to is the 36 different statutory dedications made by the Legislature for a variety of purposes. For example, it's not commonly know that within the 4 percent state sales tax paid, 0.03 percent is redirected to the Tourist Promotion District that generates nearly $20 million a year to aid tourism across the state. These divert more than 15 percent or a little under $2 billion from the state's general fund which leaves almost $9 billion for "discretionary" spending from the general fund. In times of deficit, normally it is from this pot only that cuts may be made in programs (as opposed to cuts in general government operations which can occur anywhere through tactics such as travel curtailment, position freezes, etc.).
Program cuts, or those to the actual services being funded or provided, come from a projected budget deficit and if less than 0.7 percent of the appropriated amount from a fund (such as the general fund) with no agency suffering more than a 3 percent cut, the governor can do it by himself. If more, he can go up to 5 percent reductions in funds with approval of the Joint Legislative Committee on the Budget (1 percent for the Minimum Foundation Program). Anything more requires a legislative special session. These are constitutional requirements.
So when Jindal refers to flexibility by removing dedications from some degree to totally, four things must be kept in mind. First, these are statutory matters that could be undone easily by the …
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posted by Jeff Sadow, 1 month, 2 weeks, 3 days, 11 hours, 13 minutes ago
"Rainy day" fund could be tapped for shortfall
Recently it has been argued here that with a surplus for the last state fiscal year but a looming deficit for the next that Louisiana bankroll the surplus now and dole some of it out in the future. The need to do so is greater than ever and it will be a challenge to use the savings, collected in the Budget Stabilization Fund, in the most responsible way.
When House appropriators meet today, one option they say they will investigate to tackle an estimated 2009-10 operating deficit of $1-1.3 billion is to tap the fund. Legally, the initial portion of "excess" mineral revenues and a quarter of any declared nonrecurring budget surplus goes to the fund and the remainder is voluntarily entered into it. Up to a third of the balance at the beginning of this fiscal could be used next fiscal year so long as none is used this fiscal year.
This year's ending balance looks to be about $854 million which technically is not the baseline on which the one-third amount eligible to be released is calculated as the Constitution states it is to be calculated from the beginning balance of the state's current fiscal year, so it appears roughly $275 million would be available to shore up next year's budget. That figure could have been over $450 had Gov. Bobby Jindal saved more than spent earlier this year (any appropriation into the fund cannot make the fund's balance exceed four percent of the previous year's revenues, and federal recovery dollars had boosted state revenues to $34 billion the fiscal year before Jindal assumed office).
So, a fund withdrawal still would leave a substantial deficit. Further, it essentially locks out using the fund again until another year has passed, so this is a temporary and incomplete solution at best. While economic growth from increased business confidence from ethics laws changes and tax cuts enacted earlier this year will occur, it won't be overnight. All of this means that lawmakers are going to have to make hard choices.
Let's say that the amount does get deducted, leaving about $575 million in the fund, and revenues come in at last year's figures (even with further reductions in federal recovery aid), maintaining the $1.2 billion cap on the fund and leaving $625 that could be pumped into it for fiscal year 2009-10. Jindal therefore could ask to dump $550 million into the fund during any special session held to deal with the surplus, or if one does not occur during the regular session.
At the same time, …
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posted by Jeff Sadow, 1 month, 2 weeks, 4 days, 4 hours, 11 minutes ago
Recently released census numbers only underscore the outmigration problem Louisiana has faced for many years, and add fuel to the fire for those who have argued for policy change to stem this tide. Unfortunately, the solutions offered typically range from the minimal to ineffective and ignore what really must be done.
It seems that Louisiana continues to be near zero population growth, courtesy of more emigration than immigration with births exceeding deaths taking up the slack. More worrisome is that a significant proportion of the migrants away are the prime productive - and therefore biggest taxpaying contributoring - citizenry, where well over half, or about twice the Louisiana average, had attended college and about a quarter made over $50,000 annually.
But some recommendations to deal with this rest upon the erroneous idea that government somehow has to prime the pump. For example, we get from the Council for A Better Louisiana the notion that government has to fund "research alliances," even though that has been tried - and produced next to nothing - in most instances. Or also offered is appears-good but useless legislation such as attempting to bribe people to stay in the state by the state funding in part a down payment on a house - not understanding that a short-term incentive does not address the long-term disincentives present in the state.
In part, these ideas do little because they fundamentally misunderstand the nature of human economic activity and place too much faith in government to replicate the voluntary, beneficial exchanges promoted by free markets. The philosophy on which these public policy solutions need be built is neither novel nor complicated and best may be summarized by Edmund Burke's quote, "To make us love our country, our country ought to be lovely." In other words, if conditions that cause people to flee are mitigated, fewer of them will leave, and if they especially target the prime productive citizens, so much the better.
At least Gov. Bobby Jindal seems to understand what to do here, for the most part. He correctly noted that ethics reform he took the lead on will bring greater confidence in government to the citizenry that their tax dollars would not be wasted or misdirected. To a lesser extent workforce changes also will help although this is more of an attempt to realign resources than create incentives to generate new ones. But Jindal did not mention the most prominent successful such effort at beautification, this year's tax cuts disproportionately directed at the most productive citizens, probably because he only belatedly …
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posted by Jeff Sadow, 1 month, 2 weeks, 5 days, 12 hours, 3 minutes ago
Medicaid program on skids, Jindal says
Finally, the Gov. Bobby Jindal administration has issued its plan for reform of indigent health care in the state, which we then learned the changes hold great promise and look to annoy some special interests.
Essentially, the plan argues that money is being spent inefficiently that concurrently produces lower health care outcomes regarding the poor and indigent. This stems partly from procedural issues - making a variety of services "free" (since the procedures are performed and the state billed or it directly provides with no cost to the recipient) encourages wasteful usage - and from legal/bureaucratic constraints (since the state relies so heavily on state-run care through its charity hospitals it must depend proportionally far more heavily on a federal program designed not for preventive and ordinary care so patients are steered to more costly care).
The practical impact looms considerably. The administration of the present regime has costs rising far faster than the system can sustain in the long run, threatening to double its proportion of existing state general revenues in the 2004-2011 period from about 10 to 20 percent. Any attempt to rein in this spending under existing rules could threaten to make the system totally state run, if to make up the growing deficit reimbursement rates to the private providers, already low enough to discourage many from participating, get reduced further.
The plan proposes largely to remove the state from direct care and claims administration. Instead of concentrating on providing or paying providers with little control over consumption, the state wants to negotiate with networks that put together elements of health care any pay, in essence, the insurance premiums for each qualifying eligible recipient. It then would be up to the network to manage the care in a way that minimizes costs while adhering to mandated standards of quality; the better job it does, the more profit it can make (some of which will be required to be passed down to the actual providers).
In all, it creates a fundamental shift in the way indigent health care is provided in the state, one following in concept other states whose programs are judged to be successful. As a result, some interests vested in aspects of the current system are not too keen on this transformative change.
One is some lawmakers themselves. When the 2007 enabling legislation was passed, some probably intended that the legislation mainly assist the existing charity system run by the Louisiana State University System which would allow them to brag to constituents how they provided free health care to them. The "medical home" concept they figured would be created within …
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posted by Jeff Sadow, 1 month, 2 weeks, 6 days, 7 hours, 14 minutes ago
Utility regulators reject meal ban
At its last meeting, the Louisiana Public Service Commission had a motion to slightly tighten its requirements concerning permissible lobbyist expenditures on its members behalf. It wasn't a bad idea, but was far from what is necessary to address negative concerns raised by the most recent Louisiana Legislative Auditor's report on the agency.
Released last month, the audit was critical on several grounds. It did recommend that instead of following state statute that public servants accept only as much as $50 worth of free food and drink per day to have a total ban on acceptance by commissioners and staff. It also pointed out several areas in which internal procedures were unclear or undocumented, and also noted that even when procedures in areas such as rate review and auditing of those charges they were not being consistently followed.
In response to the former, Commissioner Lambert Bossiere III introduced an order that would have implemented this ban on commissioners. He got fellow Democrat Foster Campbell to go along with him but the three Republican commissioners voted it down. (Incidentally, these two had the least amount of free chow given to them or their families over the 2002-mid-2006 period, although Bossiere did not assume office until 2004; Campbell was a model of economy accepting a whopping $8 worth.)
This was not a bad idea, but not only did it not include all staff members of the LPSC, it didn't really address the most significant shortcoming of the audit - inconsistent application of rate review procedures both before and after implementation. That is, requests for rate changes and determining whether approved rates were being charged accurately in the opinion of the auditor were being handled too sketchily to ensure comprehensive information was available for setting rates and that once set these rates were actually the ones being utilized in billing.
While the Commission staff disputed many of the discoveries, a common theme concerning its admissions of shortcomings appeared to be lack of resources. These are a matter of legislative appropriation and therefore, if it is not a problem of inefficiency in their use, it is incumbent on the commissioners themselves to lobby the Legislature for more than the roughly $10 million it receives to regulate over $1 billion in utility revenues.
But the commissioners have not made any public crusade for increased funding to hire more staff to more adequately address the rate setting and monitoring tasks. Instead, this year they quietly backed a two-thirds increase of their $45,000 salaries, which Gov. Bobby …
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posted by Jeff Sadow, 1 month, 3 weeks, 2 days, 4 hours, 9 minutes ago
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Health plan law changes sought
The most important thing that Louisiana can do as it stares down a large budget deficit is to reform its provision of indigent health care. While some prepare to address that, others want a continuance of the old ways that threaten the state's very fiscal health.
Let's review representative spokesmen in this policy struggle. Department of Health and Hospitals Secretary Alan Levine has argued that in 2009 the Legislature needs to clarify the legislation passed under Democrat dominance in the Legislature and pushed by Democrat former Gov. Kathleen Blanco that tinkered with the existing system. That basically put the state on the hook to pay whatever it was billed that appeared to conform to law, with no real effort to induce efficiency into the system, but, because the state is so involved in health care by direct provision of it through its outmoded charity hospital system, it didn't really care since the federal government would pay for so much.
The problem is, to a lesser extent the state must match these payments and as Levine as made clear current rates of consumption are unsustainable. The 2007 legislation created a "medical home" concept that would assign the indigent to facilities (many state-run) but that would continue a fee-for-service billing. Levine and his boss Republican Gov. Bobby Jindal did an end run around that introducing a coordinated care regime that would allow only indirect billing by providers by routing everything through administrators of insurance-like plans, who because they must report to shareholders of some kind would have far more incentives to hold down costs, thus potential revenues to the providers. House Speaker Jim Tucker appears sympathetic with his desire to have his members meet with the apparent agenda of selling this idea.
Carrying the water for the current vested interests in the existing system is Democrat state Sen. Joe McPherson, who has interests in nursing homes which make the vast majority of their money off of government. Under the planned regime it would force more efficiency onto institutional providers meaning they must improve their performances and probably would steer business away from them to more community-based solutions. This they do not want because it means more work and fewer revenues. McPherson and his gang want less specificity in the law because then it gives them more freedom to reject what Jindal wants to do and to force their own, static "solution" onto the problem which would not be close to what is needed to improve care and control costs.
But Jindal, if he has resolve, has the upper hand in this contest precisely because of the looming budget shortfall. With a Republican House he …
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