Wednesday, 04 May 2011 20:49

Jindal's Budget For Louisiana Has No Clear Sale

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Jindal's main planks of his budget proposal unfold like this:


  1. Raid Stable Funding Sources (See, OGB and TOPS)
  2. Bilk the Feds by exploiting Federal Funding Formulas for more  Dollars
  3. Sell State Assets
  4. Raise Fees on Students

In fact, Jindal has created a panic within his budget process. The results are manifest. No regular measures are available, so only last-ditch hail-marys are left.

Because he is obsessed with his image to wing-nuts and is therefore monolithically to revenue measures (even those that are strongly supported by Louisianians, like Tobacco taxes, or repealing unnecessary Tax Credits), Jindal is in a bind.  Due to his "rob-peter-to-pay-paul," one-time budget gimmicks over the past few years he has painted himself into a corner. And the only way out of this corner is the increasingly desparate moves of what State Treasurer John Kennedy called a "junkie." It didn't have to be this way. Jindal had opportunities in '08 and '09 to reorganize State Government and put surplus funds to good use. But we know how that turned out.

It's not just Democrats that are putting the hex on the Jindal Budget. Jindal-supported Republican House Speaker Jim Tucker slammed the budget yesterday:

House Speaker Jim Tucker said Thursday that additional cuts might be needed to bring the $24.9 billion state budget into balance, and accused Gov. Bobby Jindal of sending lawmakers a "tenuous" plan based on shaky financial underpinnings. ...

"The reality is, this budget still has a lot more cuts left in it," Tucker said, adding that he doesn't think the votes are there in the House to sell three state prisons or to raise college tuition and fees by $98 million, as Jindal is advocating.

He also questioned whether there is enough support in the House to pass a constitutional amendment dedicating $92 million in tobacco-settlement proceeds to the TOPS college scholarship program, thereby freeing that much general-fund money for other uses.

"I think it becomes really problematic for us to meet our constitutional obligation to send a balanced budget to the Senate without fully understanding what those efficiencies are," Tucker said.

The governor's budget plan includes $474 million in one-time revenues and also is counting on $225 million in various savings and "funding efficiencies" that the administration has not laid out in enough detail to satisfy Tucker.

Another ploy by the Jindal administration is to privatize the Office of Group Benefits (the Office that oversees Health Coverage for State Employees) by selling off the PPO part of the plan. The sale would be for a one-time payment, and would be advised by a New York Investment Bank. The PPO runs with low overhead and also holds a $510m trust fund from plan surpluses. Let's run that by you again. This is so well-run, and with such low overhead, that it runs a surplus. 

Jindal's panic-stricken budget office is now making a fanatical grab for the trust fund to pay for their own fiscal mismanagement:

The proposal has rankled current and former state employees and lawmakers who say the Office of Group Benefits runs its insurance programs with low administrative costs and who call the privatization plan a bid to raid the $510 million trust fund filled with premiums paid by covered employees.

Lawmakers, who would need to approve pieces of the privatization plans, questioned how a private company with a profit motivation would keep state costs low and suggested an outside firm would have to either raise premiums or reduce claims payments to make the numbers work.

Which is of course the argument many Progressives made in favor of a single-payer, or universal, healthcare system. 

"Is there any data or statistical analysis to make sure this is going to work, or is this a trial balloon?" asked Rep. Rogers Pope, R-Denham Springs.

Sen. Butch Gautreaux, chairman of the Senate Retirement Committee, said any deal seemed likely to be unfair to the employees who paid for health care coverage."I don't really trust that the industry's not going to get the upper hand," said Gautreaux, D-Morgan City.

Obviously, it's really about privatizing government, isn't it?

Rainwater said the privatization plan could cut the office's 300-person work force in half...

The governor's 2011-12 budget proposal anticipates saving more than $10 million next year from laying off group benefits workers and shrinking the office size, but it doesn't include the use of any one-time money generated by the sale, estimated to be up to $150 million or more.

In an ironic twist, old Gold-Standard of Ethics Bobby is having trouble selling the Office of Group benefits because he refuses to be transparent:

Legislative Auditor Daryl Purpera said Gov. Bobby Jindal's administration has refused to hand over some information about a proposal to hire a private company to run a state worker health insurance program.

The administration says the records sought by the auditor are exempt from review under state public records laws. Purpera said Monday that without the information, his auditors can't determine whether the privatization would be beneficial for the state.

"We want to be protective that we don't give away state assets," Purpera told the Senate Retirement Committee in a discussion about proposed privatization efforts.

Rich, ain't it? Sell it all, Jindal says.

Bobby is used to being for sale, as scandal involving his wife's foundation indicates. Now the rest of the state of Louisiana has to get used to that 'fire-sale' feeling.

by Lamar Parmentel of Daily Kingfish

Daily Kingfish

Bayoubuzz Staff

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