The Daily Dime: April 2013

The Louisiana Budget Project’s “The Daily Dime” is a morning overview of news regarding state budget issues affecting low and moderate income families, written by policy analyst David Gray. To receive it directly in your inbox email david@labudget.org.

Tuesday, April 30, 2013
State budget makes its way to the House floor May 9
The House Appropriations Committee approved a $24.7 billion state budget bill Monday, but only after removing nearly $500 million in “one-time” revenues. Cutting the funds — which pay for health-care, higher education and other critical services — is regarded as a procedural maneuver to quickly move the bill, House Bill 1, through the House and to the Senate, which is expected to restore the money. The committee also amended and passed the “funds bill,” House Bill 452, which shifts money from various state funds in order to pay for spending in the budget. The approved $500 million funds bill was amended to reverse a proposal to remove $100 million from the Ernest N. Morial Convention Center in New Orleans.

Medicaid expansion moves forward
While House Speaker Chuck Kleckley, R-Lake Charles, said recently that Medicaid expansion has no chance of passing the House this session, the issue got some life in a Senate committee on Monday. The Finance Committee unanimously approved Senate Bill 246 by Sen. Ben Nevers, D-Bogalusa, which creates a fund in the state treasury that would capture any savings that result from expansion. While the bill doesn’t require Louisiana to take advantage of the opportunity to cover 400,000 low-income adults, it is seen as a way for the administration to negotiate a deal with the federal government similar to what Arkansas recently approved. Meanwhile, this map in The Washington Post shows that Louisiana is not alone in turning its back on this coverage opportunity.

Will Baucus retirement boost Mary Landrieu?
The announcement by U.S. Sen. Max Baucus of Montana that he won’t seek re-election in 2014 could set off a domino chain that could land U.S. Sen. Mary Landrieu the chairmanship of the Senate Energy and Natural Resources Committee — a plum assignment that would put her in a strong position to help Louisiana’s oil and gas industry. PoliticoPro (no link available) reports: “For a pro-oil Democrat eager to put space between herself and the party in a state that has become increasingly Republican, touting her influence on energy policy may be enough to land her a fourth term.”

Senate committee approves funding for community colleges
The Senate Finance Committee approved millions of dollars in funding for renovations and upgrades at community and technical colleges Monday. The measure, Senate Bill 204, would provide the means to fund $251.6 million for 28 Louisiana Community and Technical College System construction projects, including $92 million at Delgado and $39.7 million at Baton Rouge Community College. Qualifying projects include building new and better facilities to train welders, nurses, pipefitters and a number of other labor-intensive careers.

House committee votes to phase out solar energy tax credits
The House Ways and Means Committee voted Monday to phase out solar energy tax credits, whose costs have ballooned far beyond initial estimates. House Bill 705 would reduce income tax credits for the purchase and installation costs of solar electric and thermal systems and would eliminate the tax credit for wind generators.

FBI investigating longest serving BESE member
According to the Shreveport Times, the FBI is questioning the financial actions of Walter Lee, the longest-serving member of the state Board of Elementary and Secondary Education and former DeSoto Parish superintendent. According to the article, “Lee earned more than $1 million in salary, retirement and other benefits [from mid-2009 until November]. And it came with $15,000 in fuel charges, $10,500 in hotels and meals paid by the district, while also allegedly charging additional expenses such as hotel rooms and fuel purchases directly related to his service on the state education board to the DeSoto Parish School Board.”

Committee Watch
The House Committee on Education is considering bills on teacher rules, student tests and the authority of colleges and universities to set their own tuition and fees. The House Committee on House and Governmental Affairs is looking at legislation that would open up public records in the governor’s office. The Senate Committee on Judiciary B convenes at 10:30 a.m. to consider a bill regarding the creation of an informal process for Families in Need of Services. The Senate Committee on Health and Welfare meets after Senate adjournment to hear a bill on Medicaid expansion.. The Senate Committee on Senate and Government Affairs meets after  Senate adjournment to consider a resolution  requiring any legislative instrument that would cause state revenues to decrease by at least $10 million  in any one of the five next fiscal years to be prefiled by Jan. 15.

15 – The number of states that are not expected to expand Medicaid this year (Source: Avalere Health)

Monday, April 29, 2013
Lawmakers strategize around one-time money in state budget
Members of the House Appropriations committee will face two proposals aimed at addressing the use of “one-time money” in Louisiana’s operating budget. About $500 million in Gov. Bobby Jindal’s $24.7 billion executive budget comes from one-time revenue sources that might not be available again in future years. One plan would strip all the one-time funding from the state budget so House Bill 1 could leave the House by a majority vote instead of a two-thirds supermajority. A second plan would negotiate a mix of spending cuts and new revenue that could win the support from Democrats and Republicans.

Proposed budget pulls $102 million from dedicated funds
Jindal’s proposed budget removes nearly $102 million from dozens of dedicated funds to avoid cutting the budget again this year. Though that money would enable the governor to balance this year’s budget, it means he must find that money somewhere else. A group of conservative Republicans are fighting the fund sweep by trying to pass House Bill 452, now before the Appropriations Committee. The practice of taking money from dedicated funds began during Gov. Kathleen Blanco’s administration after Hurricane Katrina, but members from both parties say Jindal has taken the practice to a new level since becoming governor in 2008.

The Advocate: Louisiana should collect Internet sales taxes
The Advocate editorial board endorsed efforts on Capitol Hill that could generate $400 million for Louisiana and help physical retailers become more competitive with online retailers. The U.S. Senate approved the Marketplace Fairness Act last week, which would require Internet retailers with more than $1 million in annual profits to collect sales taxes on states’ behalf.Louisiana currently taxes online purchases at 8 percent, but relies on individuals to self-report their purchases and owed taxes. The Advocate said the current collection system “is not sustainable” and urged lawmakers to streamline sales tax collections so Louisiana could benefit from the Marketplace Fairness Act.

Former DHH head communicated with controversial bid winner
Former Health and Hospitals Secretary Bruce Greenstein had extensive contact with his former employer, CNSI Inc., while the company was bidding on a $200 million Medicaid contract. The contacts were detailed in a letter explaining the state’s decision to terminate the deal with Client Network Services, Inc, in the wake of a federal investigation. The letter also noted CNSI should not even have been eligible to bid on the contract because the company had no experience with the kind of claims processing required, and that Greenstein ordered the contract requirements changed to allow the company to farm that work out to subcontractors.

Residents weigh in on TOPS funding and eligibility
A recent survey by the LSU Public Policy Research Lab found that a majority of residents want higher academic standards for TOPS, the state’s popular merit-based scholarship program. According to the 2013 Louisiana Survey, 57 percent of the survey’s respondents support increasing the scholarship’s academic requirements. The current standards requireLouisiana students to have a minimum 2.5 grade-point-average on a 4.0 scale and a minimum 20 score on the ACT standardized test to be eligible. The survey also found that a majority of residents – 78 percent – are opposed to reducing the scholarship’s financial award to students.

Income may be best predictor of educational achievement gaps
StanfordUniversityprofessor Dr. Sean Reardon tells the New York Times that growing income disparities between students explain up to half of the increase in the rich-poor educational achievement gap, making it one of the best predictors of educational achievement gaps. “The academic gap is widening because rich students are increasingly entering kindergarten much better prepared to succeed in school than middle-class students,” Reardon writes. “This difference in preparation persists through elementary and high school.” Reardon’s study paints a grim outlook for states like Louisiana, which ranks worst amongst states for income inequality.

COMMITTEE WATCH
The House Committee on Appropriations convened at 9 a.m. to consider the proposed state budget. The House Committee on Ways and Means convenes at 10 a.m. to consider bills regarding the homestead exemption. The Senate Committee on Finance convenes at 10 a.m. to consider bills regarding mid-year budget cuts, the proposed breakaway school district inBaton Rouge and dedicated revenues from the Affordable Care Act.

$102 million – The amount of money Jindal’s proposed budget takes from dedicated funds (Source: The Lens)

Friday, April 26, 2013
House speaker predicts Medicaid expansion no-go this year
Louisiana House Speaker Chuck Kleckley, R-Lake Charles, told reporters Thursday that he doesn’t think any proposal for federal Medicaid expansion will win passage in the Legislature this year, according to The Associated Press. Kleckley said too many studies make it difficult for lawmakers to determine whether the expansion will result in savings or additional costs. “You talk to five different sources and you get five different answers on the numbers,” Kleckley said. In fact, while there is dispute about the long-term potential savings or cost to the state, there is no question that expansion would produce near-term budget savings as federal dollars started paying for things like hospital care for prisoners, which is now a state responsibility.

Across the Capitol, the Senate Health and Welfare Committee is expected to consider a Medicaid expansion bill on Wednesday, with several Republican senators on the panel expressing interest in tapping into the federal dollars.

U.S. Senate votes to advance Internet sales tax bill
The U.S. Senate voted 63-30 Thursday to advance the Marketplace Fairness Act, a bill that would require online retailers earning more than $1 million in annual online sales to collect state and local sales taxes on purchases made over the Internet. The Senate will wait until May 6 to vote for final passage. But in order to take advantage of the federal law, should it pass, Louisiana would likely have to centralize the way local sales taxes are collected. A sales-tax streamlining proposal was part of Gov. Bobby Jindal’s package of tax bills, which remains “parked” at the Legislature amid low public support. Though Louisiana currently imposes a tax on Internet purchases, a study by the University of Tennessee concluded that the state could potentially collect $400 million in due taxes with a better collection system.

LSU must give candidates’ names to the public
LSU must “immediately produce” the names of the people its board of supervisors considered for the university presidency, an East Baton Rouge Parish judge ruled Thursday. Judge Janice Clark issued the ruling less than three hours after oral arguments in a case where Nola.com and The Advocate claim LSU broke the law by not publically revealing the names of job candidates. LSU maintained there was but a single applicant for the post: F. King Alexander, whom the board of supervisors voted to appoint March 27. However, the committee’s search began with a list of about 100 prospective candidates which was eventually trimmed down to 35 actual contenders.

Senate committee rejects TOPS cap
The Senate Education Committee voted Thursday to reject legislation to cap TOPS, the state’s popular merit-based college scholarship program. Senate Bill 83 by Sen. Dan “Blade” Morrish, R-Jennings, attempted to limit the scholarship amount to 10 percent above the tuition being charged in the spring by the state’s colleges and universities. Morrish said TOPS would become too expensive for state government to pay without financial controls. But the Jindal administration opposed the legislation, which was involuntarily deferred by the committee in a move that likely dooms its fate for the current session.

Controversial “cash balance” plan postponed
The House Retirement Committee voted Thursday to approve a one year delay in implementing the state’s new “cash balance” plan, a 401(k)-type retirement plan for new state employee hires. House Concurrent Resolution 2 by Rep. Joe Harrison, R-Napoleonville, cannot be vetoed by the governor if passed by the Legislature. The cash balance plan is the subject of a constitutional challenge over whether it received sufficient votes for passage. In addition, there are questions about whether it offers an equivalent benefit to Social Security. If it doesn’t meet the test, the state and employees would face paying not only state pension contributions but Social Security as well.

COMMITTEE WATCH
The Joint Legislative Committee on Budget convened at 9:30 a.m. to consider the Cooperative Endeavor Agreements that will privatize public hospitals in New Orleans and Lafayette. The House Committee on Appropriations convenes 9 a.m. Monday to review and make changes to the $24 billion state operating budget. The House Committee on Ways and Means convenes 10 a.m. Monday to consider several bills regarding the homestead exemption.

 

$204 million – The expected cost of TOPS this upcoming fiscal year. (The Advocate)

Thursday, April 25, 2013
One Medicaid expansion bill rejected, another postponed
The House Committee on Health and Welfare voted along party lines Wednesday to reject a bill that would force Gov. Bobby Jindal to opt into federal Medicaid expansion. House Bill 110 by Rep. Barbara Norton, D-Shreveport, was shelved after five hours of sometimes-heated debate. A Legislative Fiscal Office analysis projects that Louisiana would save between $532 million and $544 million over the next five years even as 400,000 low-income Louisianans get coverage. The issue remains alive on the Senate side, where the Health and Welfare Committee considered SB 125 by Sen. Karen Carter Peterson, D-New Orleans, but postponed its vote until next week.

Meanwhile, it’s worth noting that the governor’s current opposition to expanded coverage represents an about-face from his first year in office, when the administration was proposing to expand Medicaid across the state – up to 200 percent of poverty in some areas. Here is what Jindal had to say about expansion back then: “As we continue to work with our federal partners – and legislators and health care advocates here – we remain fully committed to communicating to our federal partners why making the investment in expanded insurance in our state is such a compelling cause. We are continuing our dialogue with the hope that the federal government will look past bureaucratic hurdles, and see that very real objectives for improving our health care are in reach. We are ready and willing to agree to a solution that invests health care dollars into our system so more people can have access – not just to insurance, but access that results in better, proven health outcomes.”

Expanding Medicaid: Bobby Jindal’s 47 percent moment?
Robert Mann, the director of LSU’s Reilly Center for Media & Public Affairs, said Jindal descended to a new low by attacking low-income working Americans without health care as freeloaders. “To Jindal, these people are the 47 percent. He thinks they are deadbeats who want to ride ‘in the cart’ and who refuse to pull their weight.” Mann goes on to say that many individuals who would qualify for Medicaid under the expansion are “hard-working citizens who — if they quit their jobs and had no income at all — might easily qualify for Medicaid.”

Children’s Hospital to provide mental health services
Louisiana lawmakers have struck a deal that would require Children’s Hospital to offer additional mental healthcare services for youths in exchange for buying the former New Orleans Adolescent Hospital from the state for about $29 million. The deal requires Children’s to provide new behavioral health services for children younger than 5, add 16 inpatient beds for children and adolescents to the 34 it already operates on its campus on Calhoun Street, “make reasonable efforts” to provide substance abuse and detoxification services, offer longer-term inpatient care, develop services for offenders in the juvenile justice system and provide day treatment services.

A big day for House Education Committee
Three major education bills made their way through different layers of the state House on Wednesday. The House Education committee passed House Bill 160, sponsored by Rep. Gene “Dee” Reynolds, D-Minden, which would prohibit the termination of teachers rated “ineffective” under the controversial Compass rating system for one year. The committee also deferred voting on three education overhaul bills supported by the Jindal administration because nearly all of them are contingent on Compass.

The House Education Committee also approved HB 115 by Rep. Ted James, D-Baton Rouge, which would allow parents to petition to shift control over a school from the Recovery School District back to the local school authority if the school receives a D or F grade for five consecutive years. Teachers unions, education officials and a bi-partisan group of lawmakers came together in support of the bill. The “parent trigger,” as the mechanism is called, would still have to be approved by the Board of Elementary and Secondary Education and the local school board.

House passes TOPS expansion bill
A bill that would expand the TOPS college tuition program to graduate studies cleared the House floor by a 57-38 vote. Rep. Hunter Greene, R-Baton Rouge, said his bill (HB 162) is intended to attract the state’s best and brightest back to Louisiana. After citing a Legislative Fiscal Office analysis that warned the bill could significantly increase the money the state puts into TOPS, members of the House added a condition that the students would need to be in a field of study that qualifies for employment in a four- or five-star job as determined by the Louisiana Workforce Commission.

No Equal Pay for Women Act
Legislation ensuring women and men are compensated equally for doing the same work stalled Wednesday in a Senate committee. SB 153 by state Sen. Ed Murray, D-New Orleans, would make it illegal for an employer with 15 workers or more to pay women less than the same rate paid to men for the same work, with exceptions for seniority and other performance-based systems. The Senate and Governmental Affairs Committee deadlocked in a 4-4 vote after business groups argued that federal law adequately addresses the issue.

COMMITTEE WATCH
The House Committee on Labor and Industrial Relations meets upon House adjournment to consider a bill creating the Equal Pay for Women Act. The House Committee on Retirement convenes after House adjournment to consider a bill that delays the implementation of the controversial Cash Balance Plan for new state workers. The Senate Committee on Education will consider bills that establish a cap on TOPS award amounts and revises local public school education accountability standards.

$29 million – The amount Children’s Hospital will pay to purchase the New Orleans Adolescent Hospital from the state (Source: Nola.com)

 

Wednesday, April 24, 2013
Medicaid expansion debated today
Both the state House and Senate convene committees today to consider a series of bills that would expand the state’s Medicaid eligibility requirements to those provided in the Affordable Care Act. Recently, the Legislative Fiscal Office concluded Louisiana could save up to $554 million by accepting Medicaid expansion, and the LSU Public Policy Research Lab published Louisiana Survey results showing 70 percent of Louisianans want federal Medicaid expansion. LBP produced new fact sheets that explain why this coverage opportunity is good news for Louisiana businesses, for public health and for the state budget. Another paper dispels myths surrounding the expansion.

Republican health committee vice-chair: “Negotiate on Medicaid”
Sen. Fred Mills, R-BreauxBridge, attended a rally Tuesday hosted by Together Louisiana and AARP to petition Jindal to negotiate with federal officials on terms for Medicaid expansion. As vice chairman of the Senate Health and Welfare Committee, Mills could be a powerful ally for those seeking Medicaid expansion inLouisiana. Mills told rally attendees that he had conversations with two former heads of the state Department of Health and Hospitals as well as a number of private hospital executives, and all have said the Medicaid expansion is needed.

Nola.com Editorial Board: lawmakers should accept Medicaid expansion
The Nola.com Editorial Board agreed with advocates for Medicaid expansion, saying the program would be a good way to provide preventative care for Louisianans and would allow primary clinics that expanded following Hurricane Katrina to continue to operate. “Clearly, the Medicaid expansion is the best way to help them,” the Editorial Board wrote, “And if the governor refuses to accept the money, the Legislature should.”

Second attempt to increase tobacco tax fails
The House Ways and Means Committee rejected another attempt to raise cigarette taxes Tuesday. The bill by Rep. Katrina Jackson, D-Monroe, would have allowed voters to decide whether to increase the tobacco tax from 36 cents to 68 cents per pack, the same as the tax levied by Mississippi. The money raised would have been directed toward healthcare and education. With the defeat ofJackson’s bill, Ways and Means Committee Chairman Joel Robideaux, R-Lafayette, said it appeared major efforts at increasing or decreasing state taxes were dead for this legislative session.

Bill for new state debt collection office clears first hurdle
A proposal to create the Office of Debt Recovery within the state Department of Revenue cleared its first legislative hurdle Tuesday. According to HB 629, the new agency would be charged with pursuing payments more than 60 days past due. State Treasurer John Kennedy testified that the most recent accounting estimates $690 million in payments to state government is at least 180 days past due. Kennedy also noted that improving debt collection efforts by 10 percent a year could generate $100 million for state government.

COMMITTEE WATCH
The House Committee on Health and Welfare convenes at 9 a.m. Wednesday to consider bills regarding federal Medicaid expansion. The House Committee on Education convenes at 9 a.m. to consider bills regarding teacher tenure and education overhaul. The Senate Committee on Health and Welfare convenes at 9:30 a.m. to consider bills regarding federal Medicaid expansion.

$554 million – The amount Louisiana would save over five years by accepting federal Medicaid expansion. (Source: Legislative Fiscal Office)

Tuesday, April 23, 2013
Majority of Louisianans favor Medicaid expansion
Plenty of news on the Medicaid front: The same day Gov. Bobby Jindal released a guest column in the Greater Baton Rouge Business Report rejecting Medicaid expansion, the LSU Public Policy Research Lab published Louisiana Survey results showing 70 percent of Louisianans want federal Medicaid expansion. Less than one-fourth of the residents said the state shouldn’t participate. In the meantime, the Legislative Fiscal Office released its analysis of the Medicaid expansion bills, which found that Louisiana could save up to $554 million over five years by accepting the opportunity to cover low-income residents with (mostly) federal dollars.

Medicaid rally at State Capital today at noon
Several community groups and Sen. Fred Mills, R-New Iberia, are hosting a rally at noon today on the Capitol steps, where they will urge Gov. Bobby Jindal to accept $15.8 billion in federal funding to provide health insurance for more than 400,000 low-income Louisianans. Together Louisiana, AARP-Louisiana, the Louisiana Primary Care Association, and the United Faith Community of Louisiana are hosing the event. LBP released a fact sheet on the expansion’s benefits for local businesses and the economy.

First attempt to increase tobacco taxes “voluntarily deferred”
Efforts to increase Louisiana’s tobacco taxes were pulled from consideration by their authors during the House Ways and Means Committee meeting Monday. State Rep. Harold Ritchie, D-Bogalusa, voluntarily deferred HB 417 from consideration after saying he did not see support from the committee for an increase as large as the one he proposed. Ritchie’s bill would have increased tobacco taxes from 36 cents a pack to $1.41 a pack. Hearings for three other bills attempting to raise tobacco taxes — HB 304, HB 623 and HB 537 — were postponed.

Fiscal Hawks’ proposed budget changes move forward
A package of bills backed by the conservative “Fiscal Hawks” sailed through the House Appropriations Committee on Monday, their first hurdle in the legislative process. One set of bills, HB 434 and HB 620, would force the state to split discretionary and non-discretionary spending into two separate bills in years with proposed cuts to education and healthcare. These bills are constitutional amendments and would require voter approval. The other bills, HB 435 and HB 437, would require the state’s Revenue Estimating Conference to determine whether certain revenues are “recurring” before they can be used in the budget.

Controversial cash-balance retirement plan delayed
The Senate Retirement Committee voted Monday to suspend the July 1 implementation of the new 401(k)-style “cash balance” pension plan for new state workers, citing several unanswered questions about the program. The move comes as the Louisiana Supreme Court prepares to rule on whether the plan was approved with enough votes, and the IRS is studying whether the plan provides a benefit equivalent to Social Security. If “cash balance” is not equivalent, future state workers would have to enroll in Social Security, at added expense to the state.

COMMITTEE WATCH: The House Committee on Ways and Means will convene at 10 a.m. today to consider remaining tobacco tax bills and several bills that would create new tax credits. The House Committee on Health and Welfare will convene 9 a.m. Wednesday to consider bills regarding federal Medicaid expansion.

70 – The percent of Louisianans who support federal Medicaid expansion (Source: LSU Public Policy Research Lab)

Monday, April 22, 2013
Fiscal Hawks, Democrats want to cut one-time revenue
Leaders of the Democratic Party and a group of conservative Republicans known as the Fiscal Hawks are working together to cut more than $500 million in one-time financing from the governor’s proposed budget, according to The Lens. The group’s first major hurdle comes today when the House Appropriations Committee hears four Fiscal Hawk-supported bills — HB 434, HB 435, HB 437 and HB 620.

Gearing up for healthcare debate Wednesday
The House Health and Welfare Committee will meet Wednesday to consider several bills regarding the federal healthcare law championed by President Barack Obama. The debate comes nearly a year after Gov. Bobby Jindal declared that Louisiana would reject federal Medicaid expansion. The bills being considered by the committee are HCR 4, HCR 8, HB 110, HB 233 and HB 449.

U.S. Senate votes on Internet sales tax bill
The U.S. Senate will vote on a bill this week that grants states the authority to collect sales taxes on all Internet purchases. The measure, known as the Marketplace Fairness Act, could generate significant revenues for states — including $400 million annually for Louisiana. Louisiana’s current system of collecting sales taxes at the parish level disqualifies the state from benefiting from the Marketplace Fairness Act, which requires states to have a unified collection system before forcing online retailers to collect taxes.

Privatization lessons must be learned
The chaotic closure of Earl K. Long Medical Center in Baton Rouge prompted Associated Press capitol correspondent Melinda Deslatte to look at what lessons it may hold for the ongoing privatization of the LSU hospital system. The transition left nearly 400 employees without jobs, and patients unsure about their care. Members of both parties criticized Jindal, citing unanswered questions about potential gaps in care. “We were kept in the dark until the very end,” Kim Burkett, an emergency room nurse at Earl K. Long for 22 years, said at a gathering of about 400 former hospital workers and residents saying their goodbyes to EKL. “If it was (the governor’s) family who was affected, like our patients’ families were affected, this would never have happened,” Burkett said.

Search for new LSU president was intentionally secretive
The process of selecting a new president for LSU was designed to keep the names of potential job candidates from public view, according to the head of the search committee charged by the Board of Supervisors with sorting through the list of candidates. Nola.com, The Advocate and the Reveille, LSU’s student newspaper, filed suit in Baton Rouge against the LSU Board of Supervisors last week over the board’s refusal to respond to public records request for a list of the finalists for the LSU presidency.

COMMITTEE WATCH: The House Committee on Appropriations convened at 9 a.m. Monday to consider a set of bills regarding the budget-making process filed by a group of conservative lawmakers called the fiscal hawks. The House Committee on Ways and Means will convene 10 a.m. Monday to consider bills regarding tobacco tax increases. The House Committee on Health and Welfare will convene 9 a.m. Wednesday to consider bills regarding federal Medicaid expansion.

$264 million – The amount of new revenue for dedicated and other funds that would be raised if Louisiana increased cigarette taxes from the current 36 cents per pack rate to a new rate of $1.41 per pack. (Source: Fiscal Note, HB 417)

Friday, April 19, 2013
Jindal won’t seek legislative approval for hospital deals
Gov. Bobby Jindal said Thursday that his office would not request the Legislature’s approval for public-private hospital agreements. Jindal also said his office is not bound by two newly passed resolutions approved by both the House and Senate, which call for legislative committees to formally approve deals under which non-profit hospital companies would take over operations of the public hospitals now run by Louisiana State University.

Jindal pledges to veto cigarette taxes
Jindal reiterated Thursday that he would veto any cigarette tax increase that wins passage from lawmakers, unless the increased revenues correspond with cuts in taxes somewhere else. The House Ways and Means Committee is scheduled to review several legislative proposals regarding cigarette taxes on Monday. These proposals would increase cigarette taxes to 60 cents per pack (HB 304), 68 cents per pack (HB 623), or $1.41 per pack (HB 417). Rep. Katrina Jackson, D-Monroe, also filed a constitutional amendment to increase cigarette taxes to 68 cents per pack (HB 537).

Advocates for higher tobacco taxes gathered on the State Capitol steps Wednesday in a show of support for bills that raise tobacco taxes. State Rep. Austin Badon, D-New Orleans, will delay advancing his bill to increase the state cigarette tax to $1.41 a pack until he sees how the other bills do.

House Appropriations Committee Chairman: No More Tax Breaks
The chairman of the Louisiana House committee responsible for state expenditures urged his colleagues Thursday to stop passing bills that expand or create new tax breaks. A Louisiana Budget Project report released in February found revenue losses from tax breaks grew 167 percent between 2001 and 2011, and the most recent Tax Exemption Budget shows the state lost nearly $5 billion in revenue due to tax breaks in fiscal year 2012.

Children’s Hospital defends plans to buy hospital, cut mental healthcare
Representatives from Children’s Hospital in New Orleans said it would cost too much to provide mental health treatment to adolescents and younger children at the New Orleans Adolescent Hospital. Though the Jindal administration is depending on the sale to balance the state’s budget, representatives from New Orleans are split on the issue. Rep. Helena Moreno, D, filed HB 546 to allow Children’s to buy the property without restrictions, while Rep. Neil Abramson, D, filed competing HB 595 to require Children’s to use NOAH as a mental health facility.

COMMITTEE WATCH: There are no committee meetings today. The House Committee on Appropriations will convene 9 a.m. Monday to consider a set of bills regarding the budget-making process filed by a group of conservative lawmakers called the fiscal hawks. The House Committee on Ways and Means will convene 10 a.m. Monday to consider bills regarding tobacco tax increases.

$5 billion – The amount of potential state revenues lost to tax breaks in fiscal year 2012 (Source: Tax Exemption Budget)

 

Thursday, April 18, 2013
Republicans disobey governor on bill for hearing impaired
Normally loyal Republicans disregarded from Gov. Bobby Jindal’s orders to vote against House Bill 238, which restores $1 million per year to the state’s Telecommunications for the Deaf Fund by reducing the five-cent per month landline tax to two-cents and extending the a two-cent tax to cell phones, pagers and long-distance phone lines. According to the Lens, the bill’s sponsor, state Rep. Patrick Williams, D-Shreveport, also refused to withdraw the bill after receiving a warning from the governor.

LSU privatizes hospitals
The Louisiana State University Board of Supervisors voted unanimously to privatize public hospitals in New Orleans and Lafayette Wednesday, even though some details of the agreement are not finalized. The Joint Legislative Committee on the Budget will review the privatization deals later this year.

Former governors endorse tax exemption reform
Four former Louisiana governors – Kathleen Blanco, Edwin Edwards, Buddy Roemer and Mike Foster  – called on the Legislature to review the state’s myriad tax exemptions. Blanco and Edwards also opposed the governor’s controversial decision to reject Medicaid expansion in Louisiana, which would provide health insurance for 400,000 people and bring in $15.7 billion in federal support over the next decade. Roemer and Foster did not directly address the question of Medicaid expansion.

Bills expanding TOPS eligibility pass committee
Two bills expanding eligibility for TOPS passed in committee Wednesday. The first bill, House Bill 243, sponsored by state Rep. Steve Carter, R-Baton Rouge, would extend TOPS funds to eligible students who complete high school international baccalaureate, or IB, programs overseas. The second bill, House Bill 612, sponsored by state Rep. Hunter Greene, R-Baton Rouge, extends TOPS to Louisiana students who graduated from out-of-state schools and want to pursue graduate degrees in Louisiana. The Legislative Fiscal Office estimates that Greene’s bill would add more than $2 million a year to the cost of the program once the changes are fully implemented.

Advocates support tobacco tax bills
Advocates for higher tobacco taxes gathered on the State Capitol steps Wednesday in a show of support for bills that raise tobacco taxes. While Gov. Bobby Jindal initially favored higher tobacco taxes as part of his broader effort to eliminate the state’s personal income and corporate taxes, he does not support the new bills because they are not paired with tax breaks. The bills are House Bill 304 (Talbot), House Bill 417 (Ritchie), House Bill 623 (K. Jackson) and House Bill 235 (Badon). Rep. Katrina Jackson, D-Monroe, also sponsored House Bill 537 as a constitutional amendment.

COMMITTEE WATCH: The House Committee on Appropriations will convene Monday at 9 a.m. to consider a set of bills regarding the budget-making process filed by a group of conservative lawmakers called the fiscal hawks. The House Committee on Ways and Means will convene Monday at 10 a.m. to consider bills regarding tobacco tax increases.

$1 million – The amount of revenue House Bill 238 restores to the to the state’s Telecommunications for the Deaf Fund each year (Source: HB 238 Fiscal Note)

Wednesday, April 17, 2013
Hospital privatization considered today
The LSU Board of Supervisors is considering two hospital privatization agreements today that would place public hospitals under the care of private companies. Though state and LSU officials are attempting to transfer hospital operations by the end of June, a draft lease agreement posted on the LSU Board of Supervisors website noted the cost of the lease was “under discussion and subject to final agreement on appraisals.”

Meanwhile, the state Senate passed legislation Tuesday requiring LSU to receive legislative approval before privatizing the LSU public hospitals. The resolution was approved without any debate or objections, but there are questions about whether it will have any effect.  Gov. Bobby Jindal’s administration said the resolution does not have the force of law, and the attorney general’s office has agreed that the deals do not need approval from legislators to take effect.

Lavish health benefits for Orleans Parish Criminal Court judges
The Orleans Parish Criminal District Court released documents detailing lavish life-savings insurance benefits for judges, which were purchased with fines and fees collected from criminal defendants. According to Nola.com, who filed a lawsuit filed in February with WVUE-TV after the courts refused to release the documents, “The documents show that judges who took advantage of up to six supplemental life insurance policies offered to them — a group that included nearly every judge — enjoyed nearly a half-million dollars each in potential benefits, the bulk of them unavailable to other court employees.”

Proposal for state-funded construction projects released
Gov. Bobby Jindal’s administration released the state’s capital outlay budget Tuesday, highlighting proposed construction funding for major projects throughout the state. The total cost of all the proposed projects is $123.7 million. The budget replaces $6.5 million of the $100 million that the state will raid from the New Orleans Convention Center next year, and promises to replace the remaining $93.5 million down the road.

Meanwhile, the House unanimously approved a bill that would give legislators more authority on the state’s construction expenditures.  House Bill 526 by Rep. Joel Robideaux, R-Lafayette, allows the Legislature to make final recommendations on which local projects are sent to the State Bond Commission for lines of credit, rather than the governor.

Orleans Parish public schools experience last-minute funding cuts
The majority of pubic schools in Orleans Parish received notice they will receive $181 less per student, a cut of 4 percent this fiscal year. State officials say the cuts are due to an unplanned influx of students in elementary and secondary schools and a decrease in local revenues. Many local officials, however, believe the state’s controversial — and currently unconstitutional — voucher program is draining the cash pool by funneling money to private schools.

House passes bill to help deaf, hard of hearing, and speech impaired
The state House of Representatives passed a bill designed to help the deaf, hard of hearing and speech impaired. Rep. Patrick Williams, D-Shreveport, said his House Bill 238 would  impose a two-cent per month tax on cell phones while decreasing the existing tax on landlines from five cents to three cents per month. Revenues brought in through the tax will pay for communication devices that assist the needy.

Clergy come to Capitol to press for reforms
More than 100 clergy members from around the state, organized by the New Orleans-based Micah Project, came to the state Capitol Tuesday to urge legislators to approve the expansion of Medicaid, curb Louisiana’s world-leading incarceration rate and avoid additional cuts to the state budget.

COMMITTEE WATCH: The Senate Committee on Health and Welfare convenes at 9:30 a.m. to consider bills that regard Medicaid transparency, abortion requirements and health action plans. The Senate Committee on Senate and Governmental Affairs convenes at 2 p.m. and the House Committee on House and Governmental Affairs convenes at 1 p.m. Each will consider separate bills that would prohibit the Legislature from considering sales tax rebate legislation during even-numbered years. The House Committee on Education convenes at 1 p.m. to consider multiple proposed changes to the TOPS program.

Click here for a complete listing of today’s committee meetings.

$123.7 million – The total cost of recommended projects in Gov. Bobby Jindal’s proposed capital outlay budget. (Source: Nola.com)

Tuesday, April 16, 2013
Louisiana House Ways and Means Committee Chairman Joel Robideaux announced Monday that the Legislature would not consider bills to eliminate the state income tax this session. According to Nola.com: “Robideaux said legislators weren’t willing to deal with a measure that would have meant declining state revenues at a time when many lawmakers feel Louisiana’s $23.7 billion budget is already on shaky ground.”

With the income tax debate on hold, lawmakers will begin focusing their energy on avoiding additional years of spending cuts. The Lens reports both Democrats and Republicans agree the state must identify ways to avoid the steady cuts during Jindal’s five years in office – including large cuts to higher education and health care programs serving the poor. A Southern Media poll released earlier this year showed nearly 80 percent ofLouisiana voters opposed further cuts to higher education and health care.

Jindal’s proposed budget attempts to reduce spending cuts by using one-time funds for higher education. But that plan received much criticism from lawmakers during yesterday’s Senate Finance Committee meeting. Committee chairman Jack Donahue, R-Mandeville, noted the state will run out of one-time money at some point, implying the need for a more sustainable solution to fund recurring services. Sen. Ed Murray, D-New Orleans, also criticized the plan, saying the proposed budget “sets a bad precedent” by raiding $100 million from aNew OrleansConvention Center fund to finance higher education.

Nola.com reported lawmakers are also shifting their focus to raising the tobacco tax. According to a new survey released by the American Cancer Society, 73 percent of Louisianans support such an increase. “This support comes from a broad-based coalition of voters, including 74 percent of Republicans, 71 percent of Democrats and 78 percent of independents. In addition, voters from across the state and across virtually every demographic group support the tobacco tax increase.”

A bill from House Speaker Chuck Kleckley, R-Lake Charles, to use a “stabilization fund” to attract more federal Medicaid dollars to Louisiana hospitals passed out of the House Appropriations committee Monday. According to Nola.com, “the bill would allow hospitals to pool their own cash in a state-operated fund, which would then be submitted to the federal government for additional matching dollars.” Supporters say the measure could bring an additional $170 million to the state.

COMMITTEE WATCH: The Senate Finance Committee convened at 9 a.m. to continue its review of the governor’s budget. The House Ways and Means Committee will convene at 2 p.m. to review several remaining bills that lower state income taxes. More than 80 clergy leaders from around the state are at the Capitol today to press legislators about the need for a balanced approach to the budget; for Medicaid expansion and an end to over-incarceration.

Number of the Day: 73 percent – The number of Louisianans who support an increase in the tobacco tax. (Source: The American Cancer Society)

Monday, April 15, 2013
Nearly half of the members of the House Ways and Means Committee strongly oppose bills that would eliminate or phase-out income taxes without paying for the $3 billion revenue loss, according to The Lens. The tax-writing committee will consider three bills today that eliminate personal income taxes over a 10 year period, which the state’s fiscal office concludes will cost almost $24 billion over that period.

The Associated Press reports Gov. Bobby Jindal gave lawmakers very little guidance on shaping a plan that eliminates income taxes after parking his own plan, opening the door for Legislature to eliminate one-third of the state’s general fund without replacing the lost dollars. “He’s said he’d support a phase-out, rather than an all-at-once removal he originally sought. And he doesn’t want lawmakers to raise more money with taxes than the state would have brought in under the current structure. That’s about it for parameters.”

Jim Beam of The Lake Charles American Press said eliminating the state’s personal income taxes without replacing lost revenues would  repeat the state’s mistake in repealing  the  Stelly plan. Louisiana lost $359 million in revenues in 2009 following the Stelly repeal, and more than a billion dollars more since that time. “The citizens of Louisiana can only hope lawmakers don’t repeat the mistake the previous Legislature made five years ago when it repealed the Stelly plan. The state has been in a financial bind ever since.”

Gov. Bobby Jindal defended Louisiana’s school voucher program Friday on NBC, saying the program funds “what works for the child.” The governor’s remarks come as the state is awaiting a Supreme Court ruling on the constitutionality of the 2012 law that created the voucher program. Jindal announced earlier this year that he might call the Legislature into a special session this summer if the education overhaul is ruled unconstitutional.

Residents who depend on Earl K. Long Hospital in Baton Rouge for care filed suit  against the governor and the Department of Health and Hospitals requesting an injunction to delay its closure. The lawsuit contends that closing the hospital will not save the state money and alternative care facilities are not yet in place to address the health issues of the needy. With EKL slated for closure today, members of the Joint Legislative Committee on the Budget quickly approved a funding plan last week that shifts services  to Our Lady of the Lake Regional Medical Center. .

The closure of Earl K Long means state corrections officials will rely on other Baton Rouge-area hospitals to provide emergency and in-patient care for prisoners. According to LSU statistics, an average of seven inmates per day  were treated at EKL – with most of them coming from state prisons.

COMMITTEE WATCH: The House Ways and Means Committee convened at 9:00 a.m. to consider alternative proposals that will eliminate, phase-out or lower state income taxes. The House Committee on Appropriations will consider a bill that creates a Medical Assistance Trust Fund that will be used to pay for Medicaid. And the Senate Finance Committee meets at 1 p.m. to get an overview of the 2013-14 budget.

$79 million – The amount the state’s $1.3 billion budget shortfall will grow in the next fiscal year if the Legislature begins a 10-year phase-out of income taxes next year (Source: Legislative Fiscal Office)

Friday, April 12, 2013
Gov. Bobby Jindal told reporters Thursday that he will not put any “barriers” on proposals to eliminate the state’s income tax, implying that an income-tax phase-out could get signed into law without ways to make up the $3 billion in lost revenue. An analysis by the Legislative Fiscal Office shows phasing out the income tax would cost the state $23.7 billion over 10 years, including a $78 million shortfall in the coming fiscal year.

House Speaker Chuck Kleckley, R-Lake Charles, also favors gradually eliminating the income tax, and suggested legislators could simply replace the lost revenues in future legislative sessions. He lauded the governor for putting the onus of designing the tax plan on the Legislature, saying this answers lawmakers’ demands for more independence.

Council for a Better Louisiana President Barry Erwin said phasing out income taxes while leaving future elected leaders to deal with the future consequences and future strains on the budget is a recipe for more budget cuts, which should give citizens a grave cause for concern. Citing recent polls that showed scant support for more budget cuts, Erwin wrote, “If voters are dying to continue cutting state support to critical areas of state government in exchange for the elimination of income taxes, they seem to be keeping it a secret.”

Gov. Bobby Jindal said Thursday he would not sign legislation that limits TOPS awards. Jindal said Louisiana’s free college tuition program for above-average high school graduates keeps children from leaving the state, implying that it’s worth the skyrocketing costs.

Attorney General Buddy Caldwell said Jindal’s plans to privatize the LSU-run public hospitals don’t require legislative approval. The opinion also noted hospital leases must assure the leased facilities continue to provide the same level of health care services as required by law.

$23.7 billion – The cost of phasing out Louisiana’s income taxes over 10 years (Source: Legislative Fiscal Office)
Thursday, April 11, 2013
Economists from LSU, UNO and Tulane say eliminating the state’s income tax “is simply not good public policy. It is irresponsible.” Co-authoring a Nola.com editorial, Jim Richardson of LSU, Tim Ryan of UNO and Steven Sheffrin questioned the financial and economic wisdom of Gov. Jindal’s claim that the state should eliminate the personal income tax irrespective of revenue offsets or expenditure cuts. The economists noted cutting the income tax likely won’t create new jobs or improve Louisiana’s business climate rankings in a meaningful way. They said the state’s tax burden is already the second lowest in the nation, and any future attempts to raise revenues for public services would fall on businesses. The economists concluded by reminding readers Louisiana is currently in a structural deficit — where expenditures are greater than receipts — and eliminating income taxes, which supports almost 25 percent of the state budget, will make that deficit worse.

Louisiana’s current budget deficit is $1.3 billion, and Jindal’s attempt to close the gap by cutting budgets for public services drew a second day of public outcry during the House Appropriations Committee meeting on Wednesday. Among other concerns, lawmakers received warnings that budget cuts could cause rural hospitals, domestic violence shelters and food banks to close. Even the Louisiana Nursing Home Association criticized the governor’s proposal, saying it would take $183 million out of a trust fund established to help pay nursing homes to care for Medicaid patients.

A plan to close Earl K. Long Medical Center in Baton Rouge and shift services to Our Lady of the Lake received funding and approval from lawmakers Wednesday. The Joint Legislative Committee on the Budget had to approve the measure this week since EKL will close its doors Monday — well ahead of the original November date. Many feared Medicaid and uninsured patients in Baton Rouge would not be able to access care if the funding wasn’t approved. Sen. Sharon Broome, D-Baton Rouge, and State Rep. Regina Barrow, D-Baton Rouge, expressed concerns about the way Jindal’s administration handled the closure process — citing unanswered questions from the public, their offices and a federal agency that must approve a key part of the financing for the Lake takeover.

The Senate Education Committee approved a bill Wednesday that will change the funding mechanism for public universities. Under the proposal, the amount of state funding for each public university would be based on the following factors: student retention rates, timely progression toward degree completion, certificate and degree production, alignment with projected workforce needs, and potential earning power of graduates. Science, technology, engineering and math majors will be weighted more heavily in the funding mechanism.

The Senate Education Committee also approved a TOPS bill, sponsored by state Sen. Ben Nevers, D-Bogalusa, which would change core curriculum requirements and GPA calculations for TOPS eligibility. The bill would allow students to take upper level courses in addition to traditional courses and still be eligible for TOPS. A fiscal note for the bill stated, “it would only take 23 additional students qualifying for a TOPS Opportunity award based on the revised GPA calculations to exceed $100,000 in additional TOPS Expenditures”

Thursday’s Committee Watch: The House Committee on Education meeting features two bills that would allow out-of-state and international students to qualify for TOPS; the House Committee on Health and Welfare meeting features a bill that revises aid to needy families and employment services for Temporary Assistance for Needy Families (TANF) recipients; and the House Committee on House and Government Affairs features a bill that requires the Legislative Fiscal Office to analyze the General Appropriation Bill and issue reports regarding major enhancements and increases, major reductions and means of finance substitutions from the previous year’s budget.

25 percent – The amount of the state budget supported by income taxes (Source: Nola.com)

Wednesday, April 10, 2013
Gov. Bobby Jindal’s decision to “park” his tax shift proposal is giving life to more radical plans that would phase out the state’s personal income tax without figuring out how to pay for the lost revenue. Three House members have filed bills that would end the personal income tax over five or 10 years and leave it up to lawmakers in the future to figure out how to pay for the bill. But House Ways and Means chair Joel Robideaux, R-Lafayette, said that strategy is not the prudent thing to do. “The budget is not stable enough to just take money out of it.”

Tim Barfield, the governor’s point man on the tax shift plan, would not say if the administration will insist on revenue neutrality on any tax changes passed by the Legislature. Speaking Tuesday before the Senate Revenue and Fiscal Affairs Committee, Barfield noted revenue neutral reform would be his personal desire, but wouldn’t give legislators a definitive answer on where the administration stands. Barfield’s remarks drew the ire of Sen. J.P. Morrell, D-New Orleans, among others.

The Advocate says Gov. Bobby Jindal’s latest approach to tax reform – leaving it to the Legislature without any plan to pay for income-tax elimination – is worse than his original plan. “The chronic budget crises that have been a characteristic of Jindal’s financial mismanagement would be made exponentially worse, particularly for lawmakers facing the budgets after Jindal leaves office in January 2016,” the newspaper writes in its lead editorial.

The reaction to Gov. Bobby Jindal’s latest tax-shift strategy began breaking down along partisan lines Tuesday. Democrats accused Jindal of “flip-flopping” on the issue, noting that he dismissed a 2011 plan that called for phasing out the state income tax without replacing the lost revenue. Democrats said they won’t accept a tax plan “unless they present us a plan of how they would do this without devastating education and health care.” The response from Louisiana Republicans pledged to carry-out income tax cuts while holding true to “core priorities.” The Republican leadership’s press release did not outline those core priorities and did not mention raising revenues to offset the $3 billion per year loss.

The Nola.com Editorial Board also chimed in on Jindal’s decision to abandon his plan, saying the governor was “wise to drop his proposal for a massive tax swap” but calling on lawmakers to implement some good ideas from governor’s proposal — like eliminating the corporate franchise tax, centralizing tax collections and reducing or eliminating some of the state’s 468 tax exemptions. “The governor talked Monday about Louisiana needing a ‘tax code that looks like it was written on purpose.’ Yes, it does. His tax swap wasn’t the way to get there, but he and lawmakers should continue to work toward that goal.”

In addition to debating income tax cuts and offsetting the $3 billion in losses, lawmakers also must fill a $1.3 billion gap in next year’s budget. The House Appropriations Committee heard from the general public about the governor’s proposed 2013-14 budget, which slashes millions of dollars from domestic violence services, prescription drug programs for seniors and breast and cervical cancer programs that offer screening and treatment to thousands of women each year. The governor’s cuts also target the state’s public hospital system and around-the-clock care for developmentally disabled children.

The Louisiana Hospital Association endorsed federal Medicaid expansion on Tuesday. LHA president John Matessino urged the state to take advantage of the significant federal resources available to expand health care coverage. Meanwhile, the Louisiana State Medical Society said it would not support simply expanding Medicaid eligibility but would support healthcare models “which seek to provide private insurance coverage to additional low-income individuals and families not covered by Medicaid.”

In addition to rejecting federal Medicaid expansion that would expand health coverage to nearly 400,000 residents, the Jindal administration announced Tuesday that it will not entertain the Arkansas Medicaid model. The model proposed in Arkansas would use federal dollars to finance private insurance programs. The Jindal administration recited its usual chorus when describing the decision to reject the Arkansas model: the proposed plan does not provide the flexibility the Jindal administration desires.

$1.4 million – The proposed cuts to domestic violence services in the governor’s budget, on top of a $1 million cut enacted earlier this year (Source: Nola.com)
Tuesday, April 9, 2013
Gov. Bobby Jindal admitted defeat during yesterday’s opening address to the 2013 legislative session by announcing that he will park his tax shift proposal. The governor remains committed to the elimination of income taxes, telling the Legislature, “Send me that bill to get rid of those taxes.” There are several bills circulating through the Legislature that would eliminate income taxes immediately, phase-out the taxes over three to 10 year periods, or reduce income tax rates. It is unclear, however, if and how the revenue lost through eliminating or reducing rates would be replaced.

You can read a full transcript of the governor’s address by clicking here.

Louisiana Budget Project issued a statement on eliminating the income tax.

The New York Times reported on Jindal’s announcement, writing “[The announcement] was only the latest in a season of setbacks.… Unfavorable polls, once discounted as the byproduct of an ambitious agenda, were only getting worse — recently much worse. The governor’s statewide school voucher program, a pillar of his education reform package, was blocked by a trial court judge on constitutional grounds. Judges have since also blocked his revamp of teacher tenure rules and a change of the state retirement system. … Then at the end of March, Mr. Jindal’s health secretary, Bruce Greenstein, announced his resignation amid reports of a federal grand jury investigation into the awarding of a $185 million state contract.”

John Maginnis added his two cents on the governor’s decision to park his tax plan, noting none of the bills filed by legislators to phase-out income taxes include a way to pay for the foregone revenues. Maginnis also said not all parts of the governor’s plan were bad, and the Legislature should still attempt to centralize its tax collection system, simplify the tax code by getting rid of inefficient sales and income tax exemptions and increase tobacco taxes.

In other news, obstetrics and gynecological care for uninsured women in the Baton Rouge area is in jeopardy. The state Department of Health and Hospitals and Women’s Hospital have not closed a deal for the private takeover of the LSU-operated outpatient women’s clinic. The facility, which is also home to OB-GYN graduate medical education programs, is scheduled to close Monday. DHH spokeswoman Christina Stephens said the department hopes to finalize the agreement between LSU, DHH and Women’s Hospital “in the coming days.”

A state audit released Monday said the Recovery School District did not properly manage the construction of modular school buildings at the Abramson site in Eastern New Orleans, resulting in $6.1 million in questionable costs on the $105 million project. The project’s original budget increased by $29 million thanks to 60 change orders and contract amendments, the audit says. The new report comes just a week after the state auditor’s office issued a separate audit showing $2.7 million in property had been lost, misplaced or stolen from the Recovery School District in the last four years.

Nola.com is suing the LSU Board of Supervisors over its refusal to release the names of other finalists for the school’s presidency. The Nola.com suit will likely be joined with a similar suit filed by The Advocate last week. The Nola.com lawsuit asserts there is no factual or legal basis for LSU’s claim that there are no public records of other candidates. State law entitles the public to “the name of each applicant for a public position of authority or a public position with policymaking duties.”

$2.92 billion – The projected state collections from income taxes this year (Source: Revenue Estimating Conference)

Monday, April 8, 2013
Gov. Bobby Jindal will deliver his opening address to the Louisiana Legislature at noon today to mark the beginning of the 2013 Regular Legislative Session. Louisiana Public Broadcasting will provide live statewide coverage of the governor’s address, which is expected to highlight Jindal’s proposal to drop the state’s income and corporate taxes and increase the sales tax.

Prolific blogger (and LSU professor) Robert Mann lists 25 questions viewers should ask while watching the governor’s address, including whether Jindal will acknowledge the sizeable public opposition to his tax plan and whether he will offer a defense for using one-time money in his budget. Mann noted Jindal has never faced a Legislature more skeptical of his policies, and the outcome of this year’s legislative session could have huge impacts on Jindal’s presidential aspirations. “In short, the stakes for him have never been higher. What happens in the next three months could determine whether he is a failed governor.”

The Advocate Editorial Board lambasted Jindal’s tax shift proposal for its disparate impacts on the poor and the rich. “A huge criticism of Jindal’s tax plan is that repealing income taxes is mostly a benefit for the best-off taxpayers…. Even the administration’s own data, after considerable massaging, shows high-income taxpayers getting tax breaks of 200-to-1 or better over those in low-income brackets (including low-income and retiree tax rebates).” The editorial also noted the proposal makes the tax code more complex for the poor and retirees, because they would have to complete tax return documents in order to receive their rebates.

As the governor’s tax-shift plan struggles for traction and his poll numbers crater, the resignation of Health and Hospitals Secretary Bruce Greenstein couldn’t come at a worse time, the Associated Press says. Greenstein resigned last month after a federal grand jury launched an investigation into his alleged improper involvement in the award of a $194 million state contract to CNSI, where Greenstein once worked. With Greenstein gone, Jindal lost a major supporter of his plans to reject the federal Medicaid expansion and to privatize the LSU-run public hospitals that care for the poor and uninsured.

The governor announced Friday the state’s incoming chief information officer, Ruth Johnson, will lead the search for the replacement for CNSI, which saw its contract terminated in the wake of the federal investigation. The chosen firm will take over Medicaid claims processing from current firm Molina in 2014. Meanwhile, CNSI is considering legal action against the state for wrongfully terminating the contract.

Delgado Community College in New Orleans cited reductions in state funding as one major reason for an $8 million budget deficit this fiscal year. The shortfall will result in layoffs of faculty and unclassified employees by the end of May, according to an email sent by Chancellor Monty Sullivan to faculty and other employees. While Sullivan’s memo didn’t detail the number of employees that will be laid off, it did note the budget deficit may be the same or even greater in 2014.

 $5,000 – The estimated tax break for a tax filer with $100,000 in income under Jindal’s tax shift proposal, compared to the $18 tax break for a filer with $20,000 in income, assuming the low-income filer receives his or her tax rebate. (Source: The Advocate)

Friday, April 5, 2013
House Appropriations Committee members criticized the governor’s higher education budget on Thursday, which includes $490 million in “one-time” money that likely won’t be available in the future. If any of these funds fail to materialize, the state will be forced to make more cuts to its public colleges and universities on top of the nearly $650 million in cuts since 2008. Diminishing state support for higher education funding led some committee members to verbally support House Bill 194, which would take tuition-setting authority away from the Legislature and give it to the university governing boards.

With the governor’s tax-shift proposal conspicuously lacking in local allies, the governor is relying on national groups as he tries to build support,  Gambit reports. “The money (from national conservative networks) — about $750,000 will be raised by Jindal’s independent political arm Believe in Louisiana — is expected to pay for advertising in an effort to go over the heads of the same special interests that helped him achieve his goals early on.” The move comes after the governor’s usual  supporters, such as the Louisiana Association of Business and Industry, the Louisiana Municipal Association and the Louisiana Bankers Association, continue to express  grave concerns with the sweeping reform.

Tyler Bridges of the Lens looked at the political evolution of House Speaker Chuck Kleckley, R-Lake Charles, a close ally of the governor who has shown a modest independent streak now that the tax-shift plan is on the rocks.

The sales-tax increases called for by the governor’s tax-shift plan would also be a major blow for local governments, The Advocate wrote in its lead editorial. That’s because parish and local governments rely on their own sales taxes to fund many services, and renewing those taxes would become much more difficult if Louisiana adopts the country’s highest combined sales-tax rate.

Louisiana will receive $95 million as part of a settlement with insurance companies over damage sustained in storms dating back to Hurricane Katrina. About $56 million of the money will be plugged into the current fiscal year budget, , while the rest will go to the “rainy day fund.” While this was good news for the governor and lawmakers, Louisiana still has not raised all the money it expects to spend this current fiscal year because some contingency funds haven’t materialized, such as $10 million from the lease of the New Orleans Adolescent Hospital.

A new report by Ernst & Young, the firm hired by the administration  to crunch the numbers for his tax-shift plan, noted that expanding the sales-tax  base to include services will force companies to either pass these costs on to their customers or reduce their economic activity in the state. Nearly 55 percent of current state and local taxes in Louisiana are imposed on businesses. The report also says, “It impossible to determine who bears the burden of the sales tax and how the tax burdens vary by household income levels. As a result, it is difficult to design policies to offset this burden on lower income households.

Katherine Newman, dean of the School of Arts and Sciences at Johns Hopkins University, appeared on NPR’s “Here and Now” Thursday to explain how high sales taxes can lead to to higher death rates, more crime and a lower rate of high school graduation by taking a larger percentage of income from the poor than from wealthy households.  Newman said regressive taxation makes it harder for the poor to afford better education, the cost to move to a better neighborhood and to buy medicine for illnesses. Newman said tax structures are particularly regressive in the South, noting  that the difference in income for a working mother in the South and one in the Northeast — each with the same number of children, poverty-level wages and similar spending patterns — could be as high as $2,300.

A firm hired by the administration to review the state’s $1.2 billion in uncollected debts gave state officials its final recommendations Thursday, which would help collect up to $158 million in old debt. Among other reforms, the CGI report recommended creating a centralized collection operation and requiring state agencies to forward the names of debtors and take other steps. CGI said the state would collect $26 million of the total debt over the next five years by doing nothing different and $2.9 million by selling the debt for a loss.

$1.2 billion – The amount of unpaid debt owed to the state Department of Revenue, the state Department of Health and Hospitals, the state Department of Transportation and Development, the state Department of Insurance, the state Department of Children and Family Services and Delgado Community College. (Source: The Advocate)

Thursday, April 4, 2013
Louisiana House Speaker Chuck Kleckley (R-Lake Charles) is postponing debate on Gov. Bobby Jindal’s tax shift proposal until legislative staff can analyze the plan. Kleckley’s decision comes after various groups identified errors with the figures used by Jindal’s administration when touting the plan. The Legislative Fiscal Office is not expected to release its report, known as a “fiscal note,” for several weeks. In the meantime, Kleckley said the House Ways and Means Committee will begin considering alternative plans proposed by legislators when the session begins April 8.

The House Appropriations Committee questioned state Superintendent John White for nearly eight hours Wednesday with concerns about the state’s school voucher funding. Committee members criticized a decision by the Board of Elementary and Secondary Education to loosen public education money restrictions, saying the decision will result in fewer dollars for public schools as voucher students take state funding with them to private and parochial schools. The voucher program is estimated to cost the state $40 million next year, up from $25 million this year. In addition to questions about vouchers, committee members also accused White of purposefully overestimating costs in an attempt to circumvent oversight by the appropriations committee.

Rep. Helena Moreno (D-New Orleans) wrote a letter to Nola.com criticizing the governor’s proposed 2013-14 executive budget for cutting funding for a cancer prevention program. Moreno wrote, The Louisiana Breast and Cervical Health Program, or LBCHP, last year received $700,000 in state funding. It also received a federal match totaling the amount of funding to $2.8 million. The LBCHP annually helps close to 16,000 low-income, uninsured and under-served women gain access to lifesaving tests for breast and cervical cancer. Moreno went on to note Louisiana ranks first in the country for breast cancer mortality rates, and she implored her fellow lawmakers to restore funding for this program.

A new American Association of University Professors report accused Southern University of improperly laying off tenured faculty and eliminating degree programs in October 2011 as administrators looked for ways to cut costs. Nearly 70 faculty positions and several dozen nonfaculty positions were eliminated through layoffs, retirements, resignations and attrition over an eight-month period. The report also faulted the university for not accepting a deal voluntarily proposed by the majority of faculty to take 10 percent of their job time off without pay.

Nearly $700 million dollars in disaster recovery funds to elevate houses following Hurricanes Katrina and Rita are missing, according to U.S. Department of Housing and Urban Development Inspector General David Montoya. Montoya told ABC news state officials cannot provide “conclusive evidence that the $698.5 million in Community Development Block Grant (CDBG) disaster recovery funds had been used to elevate homes.” A large portion of the blame lies with the Louisiana Road Home program, which distributed grants of $30,000 to more than 24,000 homeowners. The government investigation found 70 percent of that money is unaccounted for.

Louisiana has the highest rates of gun violence in the nation, according to a new report by the Center for American Progress, a nonpartisan educational institute in Washington D.C. CAP based its rankings on nationwide gun violence data across 10 factors, ranging from overall firearms deaths in 2010 to aggravated assaults with a firearm in 2011. Louisiana ranked first or second in six of the 10 categories, and its average ranking across all 10 factors was a 5.0, just edging out Alaska’s 5.2 for the top spot.

 $40 million – The estimated costs of Louisiana’s voucher program for the next fiscal year, up from $25 million this year. (Source: Nola.com)

Wednesday, April 3, 2013
The majority of Louisiana residents believe the state is moving in the wrong direction, according to the State of the State Report released Tuesday by the LSU Public Policy Research Lab. The 52 percent of respondents who believe Louisiana is moving in the wrong direction is up from 39 percent last year. The State of the State Report is the second recent survey revealing a growing dissatisfaction among Louisiana residents. Southern Media and Opinion Research released poll results Tuesday that showed Gov. Jindal’s approval rating dropped to 38 percent, down from 51 percent last fall.

Thousands of Louisiana families could qualify for health insurance subsidies under the Affordable Care Act, according to a report by the non-partisan Families USA. The report finds that 353,000 Louisianans could benefit from the new law, which provides subsidies for families with incomes up to 400 percent of the federal poverty level. The subsidies will not benefit the 213,897 lowest-income residents without insurance, however, because the ACA envisions that states will expand their federal Medicaid program for those people, something that Gov. Bobby Jindal has said he will not do.

The Nola.com Editorial Board says the results of a state-sponsored Medicaid expansion study undermines the state’s rejection of the expansion and provides another reason for Louisiana to expand Medicaid. The Department of Health and Hospitals quietly released a report last week, which found the state could save as much as $367.5 million over 10 years by extending Medicaid to families with income up to 138 percent of the federal poverty level. The editorial board says that despite DHH’s attempt to downplay the positives in the report, “Expanding Medicaid is [the poor’s] best hope to get health care coverage – and to catch health problems earlier. It would be irresponsible for the governor to reject the help.”

More than 700 state employees will lose their jobs after the state Civil Service Commission voted Tuesday in favor of a public-private partnership deal between Our Lady of the Lake Regional Medical Center and LSU Earl K. Long Medical Center. The commission approved the deal despite 777 employees being laid off; not having the approval from the federal Centers for Medicare and Medicaid Services on the financial plan included in the cooperative endeavor; unresolved women’s health care and prisoner care issues; and unknown costs to the state to pay for employee layoffs.

LSU spent nearly $1 million in a legal battle against former research geologist Ivor van Heerden, who claimed senior university officials destroyed his career after he criticized the Army Corps of Engineers for its role in the failure of levees during Hurricane Katrina. According to documents released by the Levees.org activist group, LSU paid Baton Rouge law firm Kantro Spaht Weaver and Blitzer more than $457,000 to represent the university and paid van Heerden $435,000 in February after U.S. District Judge James Brady dismissed the lawsuit.

Today’s House Ways and Means Committee meeting is cancelled. The meeting would have been an opportunity for lawmakers and the public to consider the severance and excise tax pieces of the governor’s tax reform proposal for the 2013 Regular Session, including exemptions and deductions to be retained and to be eliminated.

52 – The percent of Louisianans who believe the state is moving in the wrong direction (Source: State of the State Report)

Tuesday, April 2, 2013
Gov. Jindal’s approval rating dropped to 38 percent, down from 51 percent last fall, according to a new poll by Southern Media and Opinion Research. The poll also found 63 percent of respondents opposed the governor’s tax shift proposal. Reasons for the drop included education reform, budget cuts and concerns about the direction the state is going, according to a press release from Southern Media and Opinion Research.

A new report by The Institute on Taxation and Economic Policy shows that Gov. Bobby Jindal’s tax-shift proposal would raise taxes on the poorest 60 percent of Louisianans, while lowering taxes on the state’s wealthiest residents. The report said numbers previously released by the Jindal administration did not take into account the additional costs that will be paid by businesses, and therefore passed along to consumers.

Speaking at a Press Club of Baton Rouge event Monday, Rep. Joel Robideaux,  the chairman of the House Ways and Means Committee said Gov. Jindal’s tax-shift proposal is not “dead on arrival.” The plan has faced criticism from several fronts, “with liberal organizations worrying the plan would hurt the poor, business groups arguing it would burden Louisiana industry, and other groups questioning whether the numbers in the proposal even add up.” However, Robideaux said there is still a chance for the proposal to eliminate state income taxes and raise sales taxes. “If the governor is pushing something, it’s never dead on arrival,” Robideaux said. “I’m not arguing that there’s not hurdles or there’s not a lot of fixes to be made.”

The state’s fiscal hawks have amended the lawsuit they filed in January seeking a ruling against Gov. Jindal’s proposed budget. Reps. Kirk Talbot and Cameron Henry, two conservative members of the legislature, asked the court to issue an injunction against using revenue from deals that are still pending approval — also called “contingencies” — to fill holes in the state spending plan. According to The Times-Picayune, “Jindal’s $24.7 billion budget for the coming year includes more than $400 million in non-recurring revenue, money from dedicated state funds and contingencies such as the sale of properties.”

The Advocate has sued Louisiana State University’s Board of Supervisors, hoping to obtain documents related to the search for the new president of LSU. The university’s student newspaper, the Daily Reveille, filed a similar lawsuit. The state’s flagship university withheld information relating to the 100 candidates for the position. Only the name of the lone finalist, F. King Alexander, was announced. LSU said candidates ask for their personal information to be confidential, and said it has obliged in an effort to keep the candidate pool as deep as possible. The Advocate said state courts have previously ruled that  the process of hiring for important public positions is a matter of public record.

Steve Monaghan, president of the Louisiana Federation of Teachers,urged lawmakers to reconsider certain provisions in Gov. Jindal’s education overhaul, rather than just tweak and pass the same package that has been struck down by the courts. Two provisions were recently argued before the state’s Supreme Court — a voucher program for Louisiana students to attend private and religious schools, and a measure that limited the power of local school boards and made it more difficult for teachers to obtain tenure. Lower courts ruled the measures unconstitutional, and the Supreme Court ruling is expected soon.

The state’s Recovery School District is in hot water after an audit revealed it had lost more than $2.7 million in lost or stolen property over the last four years. In addition, the auditor’s report said the RSD had failed to properly note separation dates for employees who left the district. Though the auditor did not find any overpayments, the report suggested that the district could end up paying former employees. The district’s superintendent said most of the “lost” property simply had an old location code, and was still in the district’s possession and accounted for.

 

 60 – The percent of Louisiana households that will pay more under Gov. Jindal’s tax shift proposal (Source: ITEP)

Monday, April 1, 2013
Gov. Bobby Jindal will have a difficult time resurrecting his tax shift proposal following Easter weekend. The governor announced last Thursday that his proposal would increase state sales taxes to 6.25 percent instead of the previously stated 5.88 percent. Nola.com reports that the governor’s plan faces criticism from all sides, including industry groups, advocates for the poor, House Democrats and conservative Republicans.

Melinda Deslatte of the Associated Press said the governor’s “revenue neutral” stance is nearly impossible to meet and limits the extent of negotiations with the Legislature. Deslatte noted the best financial modeling software will have some mistaken assumptions and results, and warns that overemphasizing revenue neutrality could easily take lawmakers’ focus off the bigger picture of creating the best tax structure for the state and its people.

New questions about the math behind the governor’s proposal are surfacing as independent and state-employed researchers say the governor is overestimating potential revenues from increased cigarette taxes. The governor’s proposal claims to raise $370 million from increased taxes on cigarettes. But researchers from the independent Public Affairs Research Council and the state-run Legislative Fiscal Office place the actual figure between $200 million and $277 million.

Lt. Gov. Jay Dardenne expressed concern that the governor’s tax proposal will have a negative impact on the state’s tourism industry, which brings around $10 billion to the state annually. Dardenne says higher sales taxes, as well as taxes on services like advertising, will hurt hotel managers, restaurant owners and others who benefit from tourism by reducing convention business in New Orleans and other areas.

In addition to the tax proposal, the Jindal administration also must close a $1.3 billion revenue shortfall. But The Advocate Editorial Board said the governor’s fiscal year 2013-14 budget proposal is a shell game that places higher education on a course for more mid-year budget cuts. Much of the funds in the governor’s budget for higher education are nonrecurring and contingent upon property sales. If any of these funds do not materialize, the budget for higher education would be reduced by that amount.

In other news, Louisiana Department of Health and Hospitals Secretary Bruce Greenstein will resign from his post on May 1. The resignation comes after The Advocate reported on March 24 that a federal subpoena had been issued to Jindal’s administration after details showed Greenstein used his influence as department head to secure a $185 million-plus contract for a former employer.

Mental health advocates continue to battle the Jindal administration after Rep. Helena Moreno, D-New Orleans, filed House Bill 546 to allow Children’s Hospital to buy the former New Orleans Adolescent Hospital property without having to offer mental health services at the location. This year’s state budget includes $35 million that is contingent upon the land being sold. Yet, mental health advocates are concerned about services for children after mid-year budget cuts eliminated state funding for mental health care for at-risk youth.

900 – The number of bills pre-filed in this year’s legislative session. (Source: The Advocate)

 

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