Pro-Publica trashes tobacco bond deal
The investigative website Pro Publica dug into Gov. Bobby Jindal’s plans to sell off the remainder of Louisiana’s multibillion-dollar settlement with tobacco companies to investors and suspects the state might be getting fleeced.
We’ve covered tobacco bond deals in depth, most recently focusing on a handful of deals to bail out these costly debts held by many state and local governments. New Jersey, Rhode Island and two New York counties have rescued failing bonds in the past year. In New Jersey’s case, a tobacco bond bailout turned a profit of more than $100 million for a hedge fund in middle of the deal. Six more New York counties have OK’d similar transactions. As we’ve reported, these bailouts are the legacy of a borrowing binge by politicians who wanted to turn annual payments from the landmark settlement into upfront cash. Many got just pennies for every dollar they promised to repay.
Can oil & gas save Louisiana’s budget?
The documentary filmmaker and environmental activist Mike Stagg has been combing through a series of audits and oversight reports on Louisiana’s oil and gas industry, which suggest that the state’s signature industry has not been paying its fair share of severance and royalty payments owed to the state. His work got the attention of WWL-TV’s David Hammer, who wonders if the state’s budget problems might be less severe if the industry was better regulated.
It was unclear how much revenue may have been lost, but Stagg pegged the amount at potentially “hundreds of millions of dollars” based on the legislative auditors’ finding that audits that had once flagged tens of millions of dollars in unpaid taxes each year all but stopped for a period of about three years. Most eye-popping was the 2013 Legislative Auditor’s report that found a 99.8 percent drop in unpaid severance taxes identified in state tax audits between 2010 and 2012 — from $26 million to just over $40,000. Meanwhile, the state collected significantly less in total severance taxes for oil and gas production on private lands, in spite of an explosion in shale gas drilling. In 2010, revenue from severance taxes fell by $154 million, a 17 percent decrease from the previous year.
Jindal wants 150,000 Louisianans to lose health coverage
Gov. Bobby Jindal bragged to a conservative audience on Thursday that Louisiana will cut off federal subsidies to 150,000 of his constituents if given the green light to do so by a U.S. Supreme Court ruling that’s expected this summer. As Greg Roberts reports in The Advocate,
The Supreme Court heard oral arguments in March on the challenge to the ACA subsidies provided to low- and middle-income insurance buyers in the three dozen states, including Louisiana, that did not set up state health insurance exchanges and, instead, rely on a federally operated exchange. In Louisiana, the average subsidy of $322 a month reduces the cost of insurance to $108 a month, according to the U.S. Department of Health and Human Services. “In Louisiana, we’ve made it very clear: We’re not doing a state exchange” to keep the subsidies intact if the Supreme Court upholds the challenge, Jindal said.
Advocate: Trim Hollywood’s blank check
Three bills that seek to cap Louisiana’s open-ended subsidy program for Hollywood filmmakers cleared a House committee this week. But The Advocate’s editorial page thinks these steps don’t go far enough to rein in a program that is costing the state more than $200 million per year.
It’s a start, but Louisiana’s taxpayers deserve better. The reform bills also should include a timetable to wind down the subsidies. The program was designed to give a taxpayer-financed boost to start the motion picture industry. The government aid has been going on for too long, and it has increased fivefold. But the bigger problem is that there is no end in sight, and while state assistance can play a role in helping launch a new industry, it should not go on forever. If Hollywood’s legislative friends have their way, we’ll spend another billion over the rest of this decade, and the moviemakers will still want more.
Nola.com supports hospital funding
The Nola.com/Times-Picayune editorial board was discouraged by the failure of House and Senate committees to extend health coverage to low-income adults this week. But it sees some hope for the future in a resolution advanced by the Louisiana Hospital Association that’s up for debate next week in the Appropriations Committee.
Although Wednesday’s committee votes are discouraging, there may still be a chance the Legislature will do the right thing — and the smart thing. The Louisiana Hospital Association, which understands that the Medicaid money would help reduce the costs of uncompensated care for uninsured Louisianians, is collaborating with House leaders on a funding proposal. Paul Salles, president of the hospital association, described House Concurrent Resolution 75, as pragmatic legislation. “We think it helps patients. We think it helps the state budget situation,” he said. Private hospitals would in essence help pay the state’s share of the expansion, which would make it easier for the next governor to accept the federal money.
89 percent – Share of consumers buying insurance through the health marketplace with the help of federal tax credits. A Supreme Court ruling could take away those subsidies if state leaders don’t act (Source: Dept. of Health & Human Services)