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Monthly Archives: May 2012

A Poster Child For Government Waste

Do you live in a home or apartment that costs $329 per squa Thanks to your tax dollars, however, 112 New Orleanians will have the opportunity, with subsidized rent, to boot.

At its last meeting, while the legislature was busy across town trying to balance the budget, the newly formed Louisiana Housing Corporation ('LHC') voted to spend $33,252,033 in taxpayer money to redevelop the 17 story New Orleans Texaco building at 1501 Canal Street, which has been vacant for 15 years. The project will create 112 900 square foot apartments for low-income seniors at a cost of roughly $300,000 per apartment, or $329 per square foot. The current average Louisiana home price is $109 per square foot.

According to the LHC board booklet, the project will include energy-efficient appliances (including a range/oven, refrigerator, dishwasher, and microwave oven), modern window coverings, a professionally-designed fitness center, common rooftop patio with breathtaking views, spacious lobby with contemporary furniture, original art, music, wireless internet, lounge/community room with large flat-screen TVs and seating, business center with computers and printers, and gated service parking lot with direct access to building for an additional fee.

It would have been cheaper for taxpayers to buy each of these seniors a home in the expensive Country Club of Louisiana or English Turn subdivisions.

What's the LHC? It's the state's streamlined housing agency created last spring by Governor Jindal to unite dozens of housing programs previously spread across five state agencies. (Governor's website). Its mission is to create affordable housing for low-income Louisiana citizens. The governor appoints most of its board members.

I sit on the LHC board as State Treasurer. Mine was the only vote against this wasteful project. In hopes of at least slowing down this runaway train, I asked the LHC board at least to reduce its cost by 20%. The board refused.

Louisianians are compassionate, generous people. We will gladly give a hand up to our less fortunate neighbors. But building a small number of expensive units is unfair to the hundreds of other low-income seniors in New Orleans who could also have been provided safe housing with the same amount of money if the LHC had chosen to rehab some of the 47,000 blighted properties in the city, which would not have cost $329 per square foot and would not have concentrated poverty in a new housing project. Itís also unfair to taxpayers who foot the bill.

My critics will argue that some of the $33 million is just ìfederal money.î ìFederal moneyî is still taxpayer money, including Louisiana taxpayers. It should be treated with the same care and diligence as state tax dollars, especially when our federal government has run up a $15 trillion sovereign debt that our children and grandchildren will have to pay back, probably through higher taxes.

The LHCís mission is admirable. It should be fulfilled by using common sense to weigh costs and benefits. $329 per square foot flunks that test. As a smart person once said, doing good does not mean doing it at any cost.

Previously published by www.thehayride.com

Are interest rates being ignored in transportation debate?

Time and tide wait for no man, as the saying goes. The forces that will drive economic prosperity in this century are moving at full speed, so the time is now for Louisiana to take full advantage of a unique financial opportunity to create jobs and transform our economy by smartly and responsibly investing in Louisiana roads and Louisiana infrastructure.

We are in the midst of a historic low-interest rate environment that experts have predicted will be with us for only a short time. As chairman of the state Bond Commission, Iíve sought every opportunity to improve our bond rating and save the taxpayers millions by using these low interest rates to refinance our existing state debt.

The time is now to take advantage of these low borrowing costs by investing in roads and infrastructure, or watch regretfully as the price of progress becomes more expensive over time.

I strongly believe that the completion of I-49 South from Lafayette to New Orleans is the most important infrastructure priority for Louisiana. Nothing will create the good paying jobs of the future and grow a 21st century Louisiana economy better than by opening up this commercial superhighway to the nation and to the world.

I am proud to have lead a successful initiative that will provide financing for the completion of I-49 North by leveraging idle funds in the stateís Unclaimed Property program. To finance I-49 South, we can do the same thing, but because I-49 South is so expensive, we must also devise other innovations to fund this critical project, such as exploring the use of public-private partnerships to attract private sector investment, and, yes, carefully explore the option of funding portions of I-49 South via tolls, if taxpayers vote to do so. Letís get the debate out of ìneutral.î

Completing Interstate 49 will have enormous economic multiplier effects for the economy of Louisiana, but we must also use this low interest rate opportunity to meet long-standing infrastructure needs in every corner of our state.

A good down payment on that is House Bill 783, authored by Rep. Jim Fannin and supported by Governor Jindal, which generates over $325 million for long needed road repairs in rural areas across the state.  The plan would use an existing revenue stream to leverage the funding of these repairs and improvements over a three-year period.  I strongly applaud efforts such as these to get road projects moving without raising taxes.

I know that as important as summoning the political will to make these important investments is, itís even more critical that we do so with the full confidence and backing of our ìshareholdersî ñ the hard working taxpayers of Louisiana.

To that end, the state should take the lead in initiating these road and infrastructure projects, while at every opportunity enabling the leadership of our local communities ñ and the voters of Louisiana directly ó to decide how we can best and most efficiently finance them. Our shareholders must have the final say to make sure their tax dollars are wisely invested ó not sent down another ìblack holeî at the state capitol.

The time is now to make the tough choices about reducing the size and cost of state government so that we may direct those precious taxpayer dollars to a smart and responsible road and infrastructure agenda. Letís not put our progress in ìreverseî by missing this window of opportunity to invest in our future in a manner thatís most cost-effective for the taxpayer. Letís get moving!

First published at www.thepoliticaldesk.com

The Truth About State Job Costs

You may have read or heard that Louisiana state government is spending less of your hard-earned taxpayer dollars because it has fewer employees. That's not true.

It is accurate that we have reduced the number of state jobs over the past 6 years or so by 7%, or about 1.2% a year, mostly by not filling vacancies, but we are spending at least $650 million more on salaries and benefits after the reduction. In other words, weíre going backwards.

A February 2012 report by the Legislative Auditor explains why. According to the Auditor, on June 30, 2005, Louisiana state government had 94,733 total positions in the executive branch. We had 83,533 on June 30, 2011. In the past 9 months, however, we have added 4,326 positions for a total of 87,859, according to the April 13, 2012 ìwarm bodyî report of the Department of State Civil Service. Thatís an overall decrease of 7% in a little over 6 years.

But here ís the thing. In his report the Auditor also found that over this 6 year period Louisiana taxpayers are spending:

  • $397 million more on salaries;
  • $47 million more on ìother payî (overtime, incentive pay, shift differential pay); and
  • $210 million more on benefits (health insurance and retirement).

Thatís $650 million additional taxpayer dollars despite the reduction of 6,874 positions. And, according to the Auditor, that doesnít even include the increased spending on ìother payî and benefits for higher education that the Auditor ìcould not determineî (see page 11 of his report) because higher education has its own separate computer system.

This is unacceptable. The state budget has increased $6 billion since 2005, or 32%, without counting federal ìhurricane dollars.î We now know one of the reasons why.

Every unnecessary taxpayer dollar state government spends to lead the South in the number of state jobs adjusted for population is a dollar less we have to invest in roads, schools, universities, health care, coastal restoration and small business development. Every dollar we spend on unnecessary labor costs is a dollar less we have to return to taxpayers, through lower taxes, to spend on themselves, their children and their retirement. 

Other states do their jobs with fewer employees. If they can do it, Louisiana can too.

Don't take my word for it. Read the Legislative Auditor's report yourself. Go to www.lla.state.la.us and click on "reports & data."

Louisiana taxpayers deserve better. Louisiana state government can do better.

Published by www.thehayride.com

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