2005 COMMENTARY ARCHIVES - July Sunday, Jul 31 2005
More of Big Daddy’s legacy (Posted 07/29/05)
According to the latest report, during the period 2000 to 2003 (Last years of the “Black Mold Administration.”) child poverty in LA grew by a whopping 11%. As many as half the state’s youngsters live in households with incomes below the poverty level and 30 percent of them are trapped in outright destitution, the study found. See story here.
A member of the CB Think Tank Research Team came up with the following causes of the jump in poverty of our children:
1. The loss of decent-paying jobs in Louisiana between 2000 and 2003.
2. The fact that families who want decent-paying jobs are leaving the state, presumably taking their children with them, which, would of course, in and of itself raise the percentage of children living in poverty.
Additionally, all jobs are not created equally. Those of us who are told we live under a rock continue to hear about the growth of jobs in LA (”LA’s on the move.). The problem is that we never are told that those new jobs for the most part are much lower-paying than those that are lost. The facts are right there in the stats. Manufacturing (high paying at the International Paper Plants) jobs are being replaced by service (low-paying at casinos) jobs. Until we start “qualifying” the jobs created versus “quantifying” them, we are only fooling ourselves.
This too is Big Daddy’s legacy.
Back to my rock.
C.B.
A Non-profit Non-Partisan Think Tank
LA’s economic growth areas (Posted 07/28/05)
We learned (Story here) that for the 12-month period June 2004 to June 2005, the number of non-farm jobs in LA increased by 5,500. Of that number 40% of the (2,600) jobs came from gambling. Another 33% (1,800) jobs were from state government. Thus 77% of all the new jobs created in the last twelve months were as a result of gambling and state government. During that same period 2,300 jobs were lost in the manufacturing sector.
We now see that our elected officials’ 16-year focus on growing gambling and government has brought us an economy based on gambling and government. Duh!
There’s good news in the future of our gambling/government economy. Over a BILLION DOLLARS more will be spent by state government this year than last. Therefore, look for more job opportunities in state government in the coming year.
C.B.
A Non-profit Non-Partisan Think Tank
LA’s on the move! (Posted 07/27/05)
I guess it is one’s point of view whether LA is on the move or not. LA’s economic guru says anyone who doesn’t think LA is on the move is “living under a rock.”
The latest news from “under the rock” comes from the U.S. Bureau of Labor Statistics. In June, LA lost 1,965 jobs*. During the same period Mississippi lost 391 jobs. Alabama lost 833.
Later today, we will receive the usual useless information from the LA Department of Labor that will most likely tell us that the LA unemployment rate is either down or holding. Of course, it is, there are fewer people looking for work in LA. They are ON THE MOVE to Mississippi, Texas, Arkansas, Alabama, etc, etc.
C.B.
P.S. LA may be on the move, but our economic department’s website is MIA. Try it yourself here. It it turns up again, please let me know.
*Figures only include those jobs lost in “mass layoffs” that are required to be reported to the U.S. Dept. of Labor.
A Non-profit Non-Partisan Think Tank
LA rewards poor performance (Posted 07/26/05)
LA ranks last or next to the last in virtually every comparison to the other states in the U.S. Two stories in Sunday’s Baton Rouge paper show clearly how we reward those most responsible for this dismal performance.
According to one story, rent charged for state-owned apartments for certain privileged leges (there 40 units and 144 legislators) doesn’t even pay for half the cost of utilities, security, pest control and maintenance, much less their use. When asked about the subsidized housing for a few pampered leges, Senate President Don Hines joked (we hope): “The pay for legislators is kind of low,….” The leges’ pay (for a part-time job) averages more than the average family of 4 in LA’s gross income. Hines then says: “This is kind of a HUD [Federal subsidized housing] project,….”
As justification for spending $400,000 of our tax dollars to renovate an apartment for himself, (Story here.) Lt. Governor Mitch Landrieu, who has five children, said: “My children have to have a place to lay their heads,….” I wonder where the children of the workers at the International Paper plants in Bastrop and Pineville that are about to close are going lay their heads in the future.
This is the same state that, despite increasing state spending by over a billion dollars this year, could not find the money for a pay raise for the public school teachers. This is the same state that had to pass a $75 Million tax on patients with insurance using private hospitals to pay for health care for indigent patients.
Why should things change for the better in LA. We reward poor performance.
C.B.
A Non-profit Non-Partisan Think Tank
Rationalizing bad news (Posted 07/25/05)
One of the reasons that we fail to address the economic problems in LA is that we fail to admit that we have any. There’s no better example than is found in Saturday’s Alexandria paper. Local officials are discussing the “bright side” of the closing of Pineville’s International Paper plant that employs 300. See story here.
According to the story, with the closure of the plant, more water will be available for the remaining citizens (of which 300 will lack jobs). It seems a bit like saying that the death of a member of one’s family will mean there will be more food for those remaining.
Irrational optimism is merely another name for denial. We must demand that our public officials remove the barriers to economic growth rather than accepting their constant rationalization of bad news.
C.B.
A Non-profit Non-Partisan Think Tank
Another one gets away (Posted 07/22/05)
Mississippi gets another manufacturing plant with hundreds of new jobs. See story here.
Questions
Was LA even in the loop on this plant?
What’s MS got that we haven’t? Better education? Better food? More professional sports franchises? Better slush funds?
My guess is that it is simply cheaper to do business in Mississippi; lower business taxes, less regulatory red tape and less political corruption.
C.B.
A Non-profit Non-Partisan Think Tank
More on the LA Boudin Plant (Posted 07/21/05)
There was a story yesterday that serves to further confirm the wasteful spending in the state’s Operating Budget (HB 1). See it here. Also James Gill’s warns against reading the budget. See his column here.
We find that in one case money was appropriated to a group that was not only, not a government agency, but non-existent.
Since I first sent out the list, some of you that either had knowledge of certain groups or checked on them, found that money going to non-existent or “fly-by-night” operations is not uncommon.
Unfortunately, this waste is nothing new, as anyone who is familiar with ancient reports from the Lege Fiscal Office knows.
The only question is when is the waste going to cease.
C.B.
A Non-profit Non-Partisan Think Tank
LA’s on the move!!! (Posted 07/20/05)
“Louisiana is on the move. If you haven’t noticed, you’ve been living under a rock.” Economic Development Secretary MICHAEL OLIVIER, Times Picayune, July 17, 2005.
Believe it!
Saturday night as I crawled under my rock for some shut-eye, I too thought that LA was on the move — on the move to Houston, Dallas, Atlanta, Nashville, etc. You can imagine my shock as I crawled out from under my rock early Sunday morning to read the above dramatic revelation.
Since Sunday morning, below are but a few headlines about “movement” in LA, that were found in the state’s newspapers:
IP to shut plant for 2 weeks
Bastrop may lose IP mill
International Paper to consider closing Pineville mill
Still hope for Pineville mill’s future
So where is Olivier? In Pineville? Bastrop? Stamford, Conn.? He’s on his way to Cuba.
Now, get out from under that rock and call your children and tell them to come home. LA is on the move.
It’s a great day!
C.B.
A Non-profit Non-Partisan Think Tank
A failure to communicate?? (Posted 07/19/05)
Since the lege adjourned last month, I have seen various references in the media to the total spending in HOUSE BILL 1 (General Appropriations Bill). I have seen or heard everything from $18.4 Billion to $19 Billion. Of late the in vogue figure, with the media, is $18.7 Billion. I believe that to be an INCORRECT.
The situation reminds me of what The Captain said to Luke in the movie Cool Hand Luke: â€What we’ve got here is failure to communicate.â€
Perhaps the media simply doesn’t have a full understanding of the difference between HOUSE BILL 1 and what is the TOTAL SPENDING IN LA. Thus a definition of terms may help them to clarify the situation:
Appropriation for the State Operating Budget (general operating expenses of the state) for fiscal year 2005-06 is House Bill 1 or Act 16. (who knows)
Appropriation for the State Capital Outlay Budget for fiscal year 2005-06 is House Bill 2 or Act 26. (Approx. $1 BILLION plus*)
Appropriation for the expenses State Judiciary for fiscal year 2005-06 is House Bill 836 or Act 56. (Approx. $107 Million*)
Appropriation for the expenses of the State Legislature for fiscal year 2005-06 is House Bill 858 or Act 66. (Approx. $66 Million*)
Appropriation for the State Ancillary (revolving) Funds for fiscal year 2005-06 is House Bill 824 or Act 46. (Approx. $97 Million*)
“Special appropriations” are mostly appropriations of money to pay the individual judgments against the state. (’Who knows)
“Non-appropriated items” are those such as Debt Service and the Interim Emergency Board Fund which do not require an actual appropriations. (Approx. $350 Million*)
There are probably other expenditures which my aging memory has forgotten.
If one is interested in knowing the total amount of our tax dollars our government is spending one could takes all the above expenditures and total them, that is, if anyone knows what is the amount appropriated in HB 1. If one is really ambitious, they might even determine how much spending has grown since July 1, 2004.
C.B.
A Major Non-profit Non-Partisan Think Tank
* As of March, 2005 as posted on the state website at: http://www.state.la.us/OPB/pub/FY06/ExecutiveBudget/OutlookSection.pdf
A look inside the Louisiana Boudin Plant (Posted 07/18/05)
Otto von Bismark said: “Laws are like sausages. It’s better not to see them being made.”
While many of you have heard of government “slush funds,” most of you have never seen them in detail.
Here’s your opportunity to take a peek into the Louisiana Boudin Plant. Go here for a listing of expenditures of your money found in HB 1 (State Operating Budget) of the 2005 Regular Session under the heading of “State Aid To Local Government Entities.” See if you agree that all of these recipients are even government entities.
Note: These expenditures are in addition to the $16 Million in Lege Slush Funds.
If you need more information on any of the items don’t ask me; I have no clue. Please contact your leges. Most of them voted for all these items so they should be able to answer all your questions.
Finally, remember, Bismark warned you.
C.B.
A Non-profit Non-Partisan Think Tank
Reality meets Shreveport (Posted 07/15/05)
Perhaps the streets aren’t paved with gambling gold in Shreveport. It seems that the reality of competition, over-saturation and out-migration has finally arrived in the city long known for putting all it’s “eggs in one basket.”
The recent story about shortfalls in the local budgets is the beginning of many more to follow. Once Texasauthorizes full-blown legalized gambling, Shreveport will be scrambling for its economic life.
Don’t be surprised to see, in the very near future, the Shreveport area casinos asking the leges for a tax break to “save jobs.” Also, don’t be surprised to see the casinos get the breaks, while REAL businesses continue to suffer the oppressive taxes and regulations in our state.
C.B.
A Non-profit Non-Partisan Think Tank
LA close to landing an auto plant (Posted 07/14/05)
Well, close, as in close by. According to a recent story in the Little Rock newspaper our neighbor Arkansas is about to land a new auto assembly plant.
This is really good news for LA. The folks in Northeast LA that are losing their jobs right and left can now find good job opportunities nearby in Arkansas. That way, they won’t have to travel to far to visit their family and friends.
Note that AR’s State General Fund (SGA) for fiscal year 2004 was $3.5 BILLION compared to LA’s $6.8 BILLION. (Note: The LA figure does not includeanother $4.5 BILLION in other state funds that are not a part of the SGF.)
Considering how all our sister states are growing economically (more businesses and more private sector jobs) and we aren’t (except for the growth of state government jobs) perhaps LA’s problem is that too much of our economic output is taken by taxes to feed the government beast.
Just a thought. But that would run counter to our economic development guru Mike Olivier’s plans to tax businesses more (Remove from our economic inducement package, the exemption from local school taxes to induce a plant location or expansion.) in LA.
C.B.
A Non-profit Non-Partisan Think Tank
Another lege answers for her record (Posted 07/13/05)
Saturday’s defeat of veteran state Rep. Diane Winston, R-Covington, in a special election for Senate District 6 has to be considered a political upset. Winston was defeated by underdog, political new-comer and former (required by law to resign to run for Senate) member of the Jefferson Parish School Board member, Julie Quinn, R-Metairie.
Of recent years it has been unusual for an incumbent lege to be defeated whether seeking re-election or seeking a seat in the other house due to term-limits. (Within the last year in the Metro Orleans area, both Reps. Ed Murray and Derrick Shepherd were elected in special elections to the senate.) Even more unusual was for school board member to be elected to the state senate. School Board seats, once considered stepping stones to higher office, of late they have been political graveyards.
Voting record haunts
For the first time since she initially won the seat, Winston had to answer for her voting record. In her only two other elections she had no opponent.
Among other votes, Winston had to answer for having during the 2000 Regular and Special Sessions alone, Winston voted for more than $1.3 BILLION in taxes and fees.
Apparently, Winston had forgotten her base (One of the most conservative districts in the state,). Quinn hadn’t and made sure that Winston ran on her record. Obviously, a majority of the voters didn’t like what they saw and sent a very clear message. They want Winston to go home when her current house term expires.
Kudos to Senator-elect Julie Quinn. May your campaign be a template for others who challenge incumbent leges in future elections. Just tell the voters how the incumbent voted and they will take it from there.
C.B.
A Non-profit Non-Partisan Think Tank
Chancellor’s assessment is wrong (Posted 07/12/05)
LSU Chancellor Sean O’Keefe, while ever the diplomat, is wrong in his assessment of the fate of a questionable effort to allow the higher education boards to raise tuition (a tax by another name) without a vote of the lege. O’Keefe’s analysis of the “advance to the rear” by the lege sponsors was:
“It didn’t fail,” O’Keefe said of the bill. “It just didn’t move as far as it needed to be enacted.” Baton Rouge Advocate, July 10, 2005.
During the 2005 Regular Session, rather than face a certain death in the House of Representatives, over which he presides, Speaker Joe Salter, wisely opted not to put his colleagues on record supporting even more taxes. Sen. Francis Heitmeier, Chairman of the Senate Finance Committee, an astute reader of “tea leaves” of public sentiment, announced that he was dumping his version of the bill before it was even heard by a committee.
This growing “back door” practice, by the lege, of giving appointed boards the power of taxation is just simply taxation without representation. We didn’t elect our leges to give away their taxing authority to others. We want to be able to hold those who tax us DIRECTLY accountable.
No, Chancellor, you are wrong. The public simply has had enough in a state where the taxpayers are already over-taxed and under-served by state government when compared to other southern states.
They want a better allocation of the existing state revenues. The public spoke and the leges listened –this time. That’s the way the system of representative democracy is supposed to work.
C.B.
A Non-profit Non-Partisan Think Tank
Something worse than lying (Posted 07/08/05)
Oh what a tangled web we weave, When first we practise to deceive! Sir Walter Scott
Monday, in the Times Picayune, Laura Maggi, did a good job of laying out the facts of how Rep. Jack Smith, D-Stephensville, deceived his colleagues in the waning moments of the 2005 lege session. (See story here.)
Rolfe McCollister, Publisher of the Baton Rouge Business Report, didn’t mince words in his column on Tuesday headlined ” Rep. Jack Smith is a disgrace” (See column here.)
There is something worse than our leges lying to each other. That is the leges’ finding humor in the deception and their refusal to sanction or even condemn Smith for it.
Perhaps the “benchmark” for truth has sunk so low that the members of the House no longer can discern the truth. What a shame.
C.B.
A Non-profit Non-Partisan Think Tank
Revealing state spending stats (Posted 07/07/05)
Rep. Tim Burns, R-Mandeville, a first-term lege, shares the following information (See newsletter here.) about the per capita cost of state governments. It says it a lot about what’s why our state can’t compete:
Southern States Per Capita Spending Comparison
Louisiana $4,141.04
Alabama $3,835.96
Florida $3,538.05
Texas $2,987.99
Georgia $1,972.96
Mississippi $1,584.59
One only need look at which states are kicking our butts in terms of economic development to determine what is wrong with LA. One cannot blame the entire disparity on the fact that LA has a state-funded (versus locally-funded) charity hospital system.
Obviously, the above stats are before the extra BILLION DOLLARS plus spending was added during the 2005 Regular Session. That would raise the per capita spending by another $200 plus.
Welcome to the Think Tank, Tim. I wish more of your colleagues would begin putting out factual information rather than just political rhetoric.
C.B.
A Non-profit Non-Partisan Think Tank
LA “serviced” again! (Posted 07/05/05)
Another new plant will “serve LA” but, LA will not receive the direct economic benefits from it. (See story here.)
Arkansas and Mississippi are under consideration for the biodiesel plant. The LA Delta is in the same vicinity and certainly it needs the jobs since that part of our state has chronic high unemployment, poverty and businesses leaving.
One can only speculate why LA isn’t being consider. It certainly isn’t because of the more highly educated work force in the other states. It isn’t because they have more catfish or soybeans nor that they are located on the Mississippi River.
All things being equal, businesses tend to locate and expand where it is cheaper to do business. It leads one to conclude that our taxes, regulations and political corruption remain too high in LA to compete.
LA continues to be “serviced” by our neighboring states, like a cow is “serviced” by a bull. The solutions are simple. Only the political will to address them is lacking.
C.B.
A Non-profit Non-Partisan Think Tank
Leges’ negligence wastes our money (Posted 07/01/05)
One week after the adjournment of the 2005 Regular Session, we learn that there might be a special session of the lege called for early 2006. The purpose of the possible session is to give the teachers a pay raise. Had the leges done their jobs during the 2005 Regular Session, such a session and its cost would have been unnecessary.
What should have been done
During the 2005 Regular Session the leges could have decided on a teacher pay raise (We were told that was a primary reason for the session.) during the Regular Session and simply insert in HB 1 (as they normally do) a line-item that provided should the money become available (everyone knew it would) the raise would have gone into effect, retroactive to the beginning of the school year.
As could have been easily predicted weeks ago, the analysts expect additional RECURRING revenues to be found the next time the Revenue Estimating Conference meets. Because the leges failed to provide for that contingency in HB 1 more of our tax dollars (that could have been used for a teacher pay raise) will be wasted on a special session to add one line to the budget.
Negligence
Apparently, the leges got so distracted in the waning days of the session clandestinely slipping in their pet projects into various bills, they forgot the primary purpose for being in Baton Rouge. Now, once again. the taxpayers will suffer for their negligence.
Suggestion
If the revenues are indeed found and a special session is called, the leges should come to Baton Rouge for the requisite 5 days sans per diems.
C.B.
A Non-profit Non-Partisan Think Tank
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