27 March 2005

The Good, the Bad, and the Ugly: Prefiled bills -- Week of Mar. 25, 2005

THE GOOD: A few good ones were filed this week, notably Rep. Billy Montgomery's HB 79 which follows the leads of others in restoring federal tax deductions to state income tax, Sen. Jay Dardenne's SB 23 which phases out then repeals the gift tax, and Sen. Tom Schedler's SB 25 which removes the income cap on those 65 or older eligible to freeze their homestead values for the purposes of taxation. Yet the best is lead author Rep. Peppi Bruneau's HB 80 which would shift Louisiana state elections from their current position during the third year of a presidential term to having them co-terminous with presidential elections. Only Louisiana and Mississippi currently follow this election calendar.

Arguments can be made both ways about whether to have state elections simultaneously with federal elections, the advantage being better turnout in state elections and a more comprehensive consideration of politics at all levels of governance (or, another way of putting this, state office candidates don't get their performances evaluated upon national officials or party activities). The disadvantage is state elections' importance could get reduced in the minds of many voters by "competing" with federal elections.

Ordinarily, a certain degree of independence might be a desirable thing. But since the state ranks so lowly in so many ways, maybe's it's time we did something different with elections timing. Maybe there ought to be a greater linkage in voters' minds; maybe it would produce different election results that put better people into office being that the ones there now (at least enough of them) aren't getting the job done.

(Note that there would be partisan implications -- with Louisiana now a solidly Republican state for federal offices, any linkage of state to federal elections would create a disproportionate surge of trickle-down support for Republicans. With the GOP holding barely one-third of the seats in both chambers, in its present form this constitutional amendment requiring a two-thirds vote of the Legislature is unlikely to pass unless black Democrats, who are only slighly less likely to be win under this regime given the compositions and voting behaviors in their districts, see some benefit in connected elections. Or ....)

THE BAD: The same bill. This is because it lengthens present terms of state officials by a year, to catch onto the 2008 election cycle.

When the previous constitution was amended to allow Gov. John McKeithen to serve a second consecutive term, part of the price was to shortern his term (and everybody else's), with the state's elections originally having been on the presidential election cycle. If now terms are to be lenghtened back to this schedule, a price also should be exacted.

Perhaps part of the rationale for lengthening is to get support for this change, but in exchange for that extra year, this amendment should be amended to prohibit any legislator from serving three consecutive full terms counting service in either chamber. The well-intentioned amendment taking effect in 1995 allows for the three-term limit applying only to service in one chamber, so many term-limited members in 2007 will try to run for seats in the other chamber. That violates the spirit of the concept, that service is such that it provides insufficient incentives for legislators to be fully cognizant of their roles as the people's representatives if they stay too long.

(Of course, to make this change my violate the constitutional provision that amendments be limited to a single object, so another separate amendment may have to be introduced which then may defeat the purpose if this one were not approved while the original was. In this instance, the original then would have to be defeated.)

THE UGLY: Actually, not only are these ugly, they're bad, too. Sen. Don Hines has two, almost identical bills SB 28 and SB 29 (the former a constitutional amendment, the latter the enabling legislation thereof) which not only are ugly because they seek to create a new dedication in a state budget already over-dedicated, but which are bad because they raid the Budget Stabilization Fund in the process.

Simply, the fund collects mineral revenues in excess of $750 million in a year and parks them there as a "rainy-day" fund. Procedures to release the money back for spending are time-consuming and can take only a third of the fund at a time. This prevents impetuous spending. Hines' bills would make a raid on the fund a quick and easy proposition with the amount in question potentially larger than the one-third level.

Dedicating the money to an education fund is a smokescreen to make this raid more palatable. But the whole dedication philosophy in this state usually is flawed in application. Dedication of spending, which now makes up close to three-quarters of the entire budget, makes sense only when the source of revenues are related to the expenditure purpose. For example, if a tax on cigarettes was then funneled into health care expenditures on diseases believed caused by smoking, that makes sense. The wrong way of doing it would be to have two entirely unrelated matters (mineral extraction and education) connected in an almost-unalterable way. This lack of budget flexibility hampers the state in addressing policy concerns. Neither of these need ever see the light of day agin.

SCORECARD: 86 House prefiles (including budget bills), 3 withdrawals (including HB 54 which was the Mar. 11 ugly bill of the week); 38 Senate prefiles, 2 withdrawals.

19 March 2005

The Good, the Bad, and the Ugly: Prefiled bills -- Week of Mar. 18, 2005

THE GOOD: Considering it comes from the arrogant Sen. Rob Marionneaux (he of the famous carping about baseball tickets which led to his feud with the media over their reporting about it), not only does SB 18 make a lot of sense, it revists his subject of shame, sports. This bill would wipe out any state aid to the New Orleans Saints. Presumably, it would invalidate the state assistance the club receives now, and remove direct aid entirely from the current debate about the state and the Saints. Being that the state is projected to pay tens of millions of dollars a year over the next several years to the club, this bill would save the state considerably even if the Saints left and took their smaller portion of state tax revenues with them.

THE BAD: SB 17 by Sen. Cleo Fields tries to increase income tax credit benefits for child care and dependent care expenses, biased in the direction of lower incomes, and increases the propensity of this policy to redistribute income (essentially by making such expenditures, adjusted by the formula involved in computing the credit, payable out from the state to the spenders on this purpose if all credits exceed income tax liability -- the state pays in cash the excess of credit over liability). This is very questionable policy both in terms of the impact on government revenues and in terms of the wealth redistribution it would encourage (never mind the boondoggle it would provide to the child-care industry), but where the bill really goes off the rails is in its treatment of the credit for those caring for a disabled dependent. Basically, those unlucky enough to have a disabled dependent with low incomes get a lot of the credit counted, while those who are doubly unlucky to a disabled dependent and make too much money get nothing.

Nobody asks to have a dependent who is disabled, which almost always is a result of bad luck and circumstances beyond the control of the family of the disabled person and that person. So why should people in this situation be discriminated against because of income? It's a variant of the sad philosophy that higher-income people, who are making a greater contribution to society than are lower income people, somehow didn't achieve their way into that position, but rather they got "lucky" and so government shouldn't give them the same relief for the same misfortune. Costs on an annual basis for caring for somebody disabled can wipe out the income and savings even of the highest-income individuals (often causing them to go on state assistance), making this a bill, in its present form, that should never see the light of day.

THE UGLY: One reason bills qualify for this category is they carve out specialized exceptions, and HB 58 does so in respect to funds the state no longer spends on the closed Swanson Correctional Center for Youth-Madison Parish Unit facility at Tallulah. Actually, it's just part of the larger problem, for Rep. Lelon Kenney's bill only wishes to add a parish, Franklin, to those of East Carroll, West Carroll, Madison, Richland, and Tensas which already by law can receive funding for alternative programs for adjudicated juveniles from this. Yes, I'm sure some economic hardship was created in these parishes when the much-criticized facility shut down, jobs from it being lost, but the facility itself probably had little to do with juvenile justice in those parishes, so this artificial connection was made to steer money to these parishes. The law in its entirety should be repealed, and monies sent to these or any other parish for juvenile justice ought to take place within the semi-rationality of the regular budgetary process, not from this irrational semi-dedication of funds.

SCORECARD: House -- 58 prefiles (including the coming budget bills), 1 withdrawal; Senate -- 18 prefiles, 1 withdrawal.

12 March 2005

The Good, the Bad, and the Ugly: Prefiled bills -- Week of Mar. 11, 2005

THE GOOD: What blessings for the state emerged in this week's crop of bills. Several would bring greater tax liberty to Louisianans: HB 47 by Rep. Pete Schneider and HB 48 by Rep. Peppi Bruneau which would restore deductibility to varying degrees of federal itemized income taxes; HB 52 by Rep. Ken Odinet which would eliminate the discriminatory $50,000 (inflation-adjusted) income cap that disallows senior citizens a property tax exemption; SB 11 by Sen. Robert Barham that would shift costs more equitably in regards to the homestead exemption and help out the finances of poorer jurisdictions by taxing the first $10,000 of value, then exempting the next $75,000 (the current first $75,000 would remain for the elderly and disabled); and a non-pecuniary bill, HB 37 by Rep. Steve Scalise that would create an independent, permanent inspector general's office for the executive branch (the current version can be abolished by executive order by the governor).

But the best bill of this week, because of its wide-ranging, very desirable impact to the political system, is Rep. Loulan Pitre's HB 40 which creates an intriguing and excellent correction to Louisiana's nonpartisan blanket primary as it relates to elections, especially federal congressional. Currently, the Supreme Court forces Louisiana to hold a separate general election because of the possibility that, as a result of this system where all candidates run in a single election and any can win with at least 50 percent plus one of the vote, a candidate could be "elected" to Congress prior to the federally-mandated election day of the first Tuesday after the first Monday in even-numbered years. Pitre's bill would reword state law to allow the return to the old system where the primary election occured before the national election day, with other state and local primary contests, saving the state money and our members of Copngress a potentially late start.

Even better, his bill forces a measure of partisan (or even no partisan) choice in all elections. Instead of the current system where, if no candidate secures an absolute majority in the pirmary election the top two vote getters would contest a general election, the bill mandates that the two cnadidates could not be from the same political party. This would create incentives for parties to try to unite behind a candidate, create more partisan choice in a general election, and diminish the oppotunity of unserious or "spoiler" candidates that hold back the growth of minority parties. This one makes for a great political science debate as well as does something practical.

THE BAD: On the surface, HB 36 is quite salutory in motive. It seeks to make any health plan offered in the state include coverage for colorectal cancer screening. Early detection in this form is voluntary and not only saves lives but, from the state's perspective, could save it money depending on whether the treatment of this ends up on the state's Medcaid expenditures (since it refers to private insurance presumably that would pick it up, unless treatment exhausted a person's benefits and assets which could throw these costs onto Medicaid).

But Rep. Rick Farrar goes too far when the bill does not allow insurance companies to count the cost for screening against an insured person's deductible amount. In essence, Farrar is pushing this cost onto insurance companies which then will cause one of two things to happen, (1) the company passes it on to the buyers in higher premiums or (2) the state's Insurance Rate Commission may cap rates lower than a company would need to be able to pass the cost along so it takes a hit in its profits (or, worse, reduces its ability to pay out claims).

What is all adds up to is the state sticking its nose into the marketplace where it shouldn't. Let insurers choose whether to offer this coverage; if people demand it, it will become part of the package and perhaps not applied to a deductible. Since it is private insurance, the state's payout risk is minimal, too low to warrant this abrogation of liberty.

THE UGLY: The dog here is Rep. Billy Montogmery's (the lead author) HB 54 which does have the laudatory effect of making much uniform the allowable court fees charged dedicated to operations of marshall's and constable's operations. But it gets ugly because it is made uniform at a higher level, in most instances doubling from $15 to $30, and is a hidden "user" tax increase on those utilizing the court system (usually against their wills). While its better for law enforcement functions, even the more ancillary ones generally undertaken by marshalls and constables, to have access to more resources, fee-based methods are unreliable, particularly in this case because the money generated is totally out of control of the marshalls and constables (for example, they don't have arrest power to "create" a court user -- a defendant who may be unable to pay the court costs anyway -- that would increase their fees. It is exactly this mentality which has gotten Louisiana's indigent defense into such big trouble. There must be a better, more reliable and more accountable, way of boosting funding for marshalls and constables. (Note: Rep. Art Morrell's HB 43 was almost as ugly for allowing the doubling of court costs in Orlerans to $500, but at least he confined this to one parish.)

SCORECARD: 55 prefiles in the House (including the three budget bills which have yet to be put into formal legislative language; 15 prefiles in the Senate. House withdrawals number 1, Senate withdrawals number 1.
Note: HB 4, the Feb. 18 ugly bill of the week, was the one withdrawn from the House.

The Good, the Bad, and the Ugly: Executive Budget special edition

THE GOOD: I gave some consideration to the fact that Gov. Kathleen Blanco wants to cut the bloated state bureuacracy by almost 2 percent in size, the positions she explained as those being mostly currently unfilled and also historically having a low utility which means performance will drop off little by their elimination. But considering that within the changes in employment levels about six dozen new unclassified (almost all political appointive jobs) are being added, I think more significant is that she has pledged to cut the Urban and Rural Development ("governor's slush") funding almost in half. The $15 or so million saved is much better spent on most anything (except perhaps superfluous sugar mills) than doling out favors to legislators and local officials. If a legislator wants money for an area, there's a capital budget for that; local officials have their own resources they can use.

THE BAD: After parsing out the gimmick accounts and flat levels of spending recommended for the legislative and judicial branches, state operating expenditures are scheduled to go up 6.11 percent -- twice the rate of inflation. And this is with a small reduction in the amount of federal dollars expected of about 3 percent (nearly $20 million). The main culprit is health care spending, up over $300 million across the budget.

THE UGLY: In fact, this is more than the entire amount of budget increase across all budgets -- total state spending is budgeted at $20.6 billion, and removing gimmickry that's only an increase of around $250 million. Take away health care increases and the budget is less than flat. But the greatest tragedy here is that there still isn't enough money to fully fund health care at current levels, including an underfunded portion related to federal government matching that could cost the state $157.5 million (even after throwing in a supercharge $75 million fee on private hospitals).

OVERALL ASSESSMENT: Actually, more positive than negative. A large forecast budget hole got filled in a mostly satisfactory way without tax increases (although the governor says she'd still like to get more money to teachers). There seems to have been more of an effort to rank priorities in an intelligent way. The budget now makes official policy of moving long-term health care more in the direction of community-based care rather than the very overweighed system favoring institutionalized care. Spending increases are not a good thing when the budget already is bloated, but they are small and no additional tax decreases are planned. But in all, it could have been much worse.

05 March 2005

The Good, the Bad, and the Ugly: Prefiled bills -- Week of Mar. 4, 2005

THE GOOD: When I received communications from the Teachers Retirement System of Louisiana saying they opposed SB 7 by state Sen. Walter Boasso, I figured this would be a strong candidate to be the best pre-filed bill of the week. Even though a very few bills got prefiled this week meaning there was little competition for this award, this one probably could win almost any week, because it is a very necessary change needing to be made to the retirement systems of public employees in Louisiana.

Simply, the separate systems, one for educators, and the other for state employees, are having the same threatened future underfunding problems as several other public employee retirement systems in the state because they are too generous. The current system allows people as young as their early 50's to draw retirement for most at 75% of the average of their highest three years of salary (and then many of these people go right back to work full-time elsewhere). You could be in your early 60's and draw 100 percent. I don't know of many, if any, pension systems in the private sector that are so generous.

The bill would clamp down on future employees only. It would raise slightly the contribution level and essentially force everybody at least to work until 60 for full vesting in the system (leaving earlier would cause a refund of contributions compounded at a low rate of return). It also will probably slightly lower the level at which benefits are computed by spreading out the average over five years. This will put the systems on more solid ground.

But perhaps the major reason why the TRSL has come out against the bill is that it drastically changes the governance of it. Instead of a board selected mainly by the members/retirees, the majority on the new board (which would combine both TRSL and the Louisiana State Employees Retirement System) will be comprised of elected officials or their designees and nominees from the for-profit and non-for-profit sectors, taking control out of the hands of the organizations.

Because of the huge stash in the funds these two boards administer, and their inherent inefficiencies and past records managing them, it's probably best that there be more popular oversight of them. While there may some trepidation at giving politicians a small increase in representation on the board, the fact that over a third of the new board will be of investment professionals more than offsets this concern. This is a necessary reform to ensure solvency of the funds and increasing the chances of professional management of them.

THE BAD: Even in a week of slim pickings, an objectionable bill is out there. I know there have been lots of past problems at the Lake Charles Harbor and Terminal District and SB 8 does address satisfactorily the issue of stevedores' contracts (in leaving them to the director's discretion only up to one year in length), but state Sen. Gerald Theunissen's bill watering down the requirements to be port director by leaving this option to its board only invites cronyism. Surely a qualified candidate can be found meeting the existing qualifications of "a four-year degree from a college or university that was, at the time the degree was granted, accredited by a nationally recognized higher education accrediting agency recognized and approved by the Louisiana Board of Regents" with "at least five years of experience in port operations, trade or industrial development, or business or public administration." (HB 28 is its companion).

THE UGLY: Even an ugly bill can be found this week, because of Louisiana's love of writing details of local governance into the law. State Sen. Robert Adley's SB 6 actually does a good thing, making the membership of the Bossier Levee District nine rather than eight to reduce the possibilities of tie votes. But it also gives the governor another chance at a patronage pick over a local agency and begs the question, why have these levee districts in the first place?

SCORECARD: 25 House prefiles, 7 Senate prefiles.