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In a story in Saturday’s Baton Rouge newspaper, Rep. Hunter Greene, R-Baton Rouge made the following statement:

[H]e would have liked to have seen the surplus be used to provide a tax rebate to all taxpayers “but unfortunately the constitution doesn’t allow us to do it.”

The state constitution restricts the use of surplus funds, but it is not true that the surplus could not have been used to give us rebates.

No attempt

The primary reason that we taxpayers did not get a rebate as a result of the over $1 BILLION surplus is simply because there was no desire and thus no effort on the part of the leges.

There is precedent for using surplus funds in a way that could have freed up money that was not restricted by the constitution that could have been rebated to the taxpayers.

The net result would have been to reduce the growth of state government spending and to have reduced the pressure for future tax increases.

The best way for state government to have “saved” money would have been to return it to the taxpayers.

Compounding the problem

Another $1 Billion will be added to state spending during the upcoming Regular Session, without even busting the Heh, Heh, Heh, “spending cap.” It’s a neat trick that is not without precedent. It is the same “shell game” played with state finances by former Governors Foster and Blanco.

Continuing to spend surpluses on government projects rather than returning them to public from which they came is expanding government spending without a comparable expansion of the state’s economy.

The most recent indication that government is growing faster than our economy can support is the fact that for the most recent 12-month period the biggest producer of jobs in LA was state and local government. And yet, we have a smaller population to be served.

A time to “pay the piper”

There will come a time to “pay the piper.”

If you believe that “paying the piper” means budget reductions, you haven’t followed modern history of the LA lege.

“Paying the piper” means tax increases.

History shows that tax increases always win over budget cuts. We haven’t learned a thing from history and thus we are doomed to repeat it.

Alternative

Let’s say you don’t like the idea of rebates to the taxpayers.

There was solution to the use of the surplus that is allowed by the state constitution and would not expand government spending. The leges could have been to put the entire billion dollars towards paying down the Unfunded Accrued Liability (”UAL”) of the state retirement systems.

The UAL is a debt owed by every man, woman and child within the geographical limits of LA.

Paying down the UAL debt would not have provided any immediate political gratification. It would, however, have been a prudent use of the money. It would have relieved your children and grandchildren of the threat of massive tax increases.

It would have also, freed up state cash that would have resulted from reducing future payments into the system. That cash could have been used to pay bonded indebtedness.

Machiavellian spending

During the special session we were told that the end justifies the means. As long as they spent the money on “non-recurring” projects, it was fiscally prudent.

Yet, we continue to borrow money (bonded indebtedness) for “non-recurring” projects while we could have used the billions in surpluses to help eliminate borrowing.

Is it fiscally prudent to fail to pay off one’s credit card balance and instead use one’s cash to make “non-recurring” expenditure to purchase a new sofa?

Your answer depends on whether you believe that saving money is more prudent fiscally than spending it. It also depends on one’s philosophy about the necessity of preparing for the long-term.

Unmet needs

Please don’t tell me about “unmet needs” as a excuse for the spending of the surplus. “Unmet needs” is just another political buzzword to excuse a system of failed priorities.

“Unmet needs” of local governments being paid for with state tax dollars is not fiscally prudent. In fact, it is absolutely wrong as a fiscal policy and it is why LA has a bloated budget with so little to show for it.

No excuse

If you would have liked a tax rebate from the surplus, don’t accept the excuse from your lege that is given by Rep. Greene. It’s just an excuse; not the answer.

If you would have preferred the state to have saved money rather than spent it; the answer is that they didn’t even try.

C.B.

Uncategorized CB 8:00 am

Good news

According to the story by the Associated Press, LA has more jobs than it did ast year. That’s especially good news in light of a national economic downturn.

Bad news

The bad news is that over 25% of ALL the jobs created in the last 12 months were in STATE and LOCAL GOVERNMENT.

State alone government grew by 9,100 jobs with local government growing by 4,400 jobs.

That is most job growth, by a long-shot, in any particular segment of our economy and represents 35% of all the new jobs the service-producing sector.

By comparison, the goods-producing sector (manufacturing, petroleum and construction) combined produced 13,600 jobs of which 6,300 were in the construction industry alone.

The Federal government jobs remained static for the year.

Not supposed to happen

The growth in government jobs comes in spite of the fact that we have fewer citizens in LA to be served by government.

The growth in government jobs comes despite a “hiring freeze” by Governor Jindal that has allowed more hires by the state.

Government continues to grow at a faster rate than the private sector economy.

This growth (in spite of the private sector) is exactly what the just-busted (by the House) state spending cap” was supposed to prevent.

Unasked question

How long we can continue to allow government growth to outpace the private sector without a further chilling effect on the private sector in LA is anybody’s guess. Unfortunately, nobody is even asking.

C.B.

Uncategorized CB 8:00 am

Yesterday, Governor Bobby Jindal issued his first veto. It was on HB 90 of the 2008 1st Special Session that dealt with ethics complaints.

It was not only a wise decision, but a courageous one considering that the co-sponsor of the legislation is the governor’s Speaker of the House and Floor Leader, Jim Tucker, R-Algiers.

Self-serving legislation

Interestingly, both sponsors of the legislation have been subjects of ethics investigations.

By adding the requirement that the complainant’s name, in an ethics complaint, be revealed would have a chilling effect on citizens coming forward with information about public officials.

While leges argue that one has the right to confront one’s accuser, that right only exists in criminal matters and criminal proceedings. Ethics charges are civil matters and are handle in civil proceedings.

How did it pass?

Interestingly, the bill was approved without a single dissenting vote. (See House vote here; Senate vote here.)

One hundred forty leges voted for the bill that was vetoed by Jindal. (Three House members were absent for the vote and there was one vacant House seat.)

Either none of the 140 leges read the legislation or they simply wanted to make it more difficult to enforce the Heh, Heh, Heh, Ethics laws against themselves and their fellow public officials.

Apparently, someone on Governor Jindal’s staff read the bill and had the good sense to suggest the governor veto this step backwards on ethics enforcement.

Kudos to Governor Jindal.

C.B.

Uncategorized CB 8:58 am