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Hear the Echoes # 22 - Thursday, July 7, 2011

Here the Echoes No. 22

 

Figment of Imagination

$1.6 billion and shrinking

Education cut in the face of SURPLUS

 

            Bobby Jindal duped a lot of folks with his "sky is falling” forecast of a mind-boggling deficit.  Government would close down, university budget cutting would send hundreds of academicians scrambling to greener pastures (where?).  Health offices wouldn’t take care of patients.

 

Among those duped by the deficit claim were Rep. Jim Fannin, the appropriations chairman, Sen. Mike Michot, chairman of finance, and Sen. Ben Nevers, the stalwart defender of public education.

 

            The story goes, "The state is broke.”  We have a $1.6 billion shortfall and had to make tough decisions.  We had to cut education, universities, technical colleges, local governments.   We had no choice.  We had to put the state back on sound financial basis.

 

            Who’d quarrel with such reasoning?

 

            Only those of us who recognized this was the Jindal version of Naomi Klein’s shock doctrine at work; and that its goal was to create an atmosphere of chaos so that Louisiana would accept his initiative to shrink government no matter the hurt to the state.

 

            School boards were convinced that the 2.75% growth factor of the Minimum Foundation Program (MFP) of funding for public schools would be missing for the third straight year.  Never mind that the state would pass down to the local boards the cost of transporting private and church school students at their expense instead of a separate line item to the state department of education.  Never mind that the state promised stipend of $5,000 reward to teachers who succeed in achieving the tough National Board Certification would no longer be a line item but would also have to be absorbed in the shrunken MFP.  Never mind that the school board contribution to the state retirement systems would jump to 22%. 

 

            Get over it!  We had to put the state back on a sound financial basis.

 

Perhaps the budget excess Jindal touts should also have included evaluating his own use of government helicopters.  In just five months he spent over $45,000 flying to north Louisiana church services where there were reports claiming the can was shaken, after church, to raise money for the governor‘s campaign.  The helicopter trips increased since then with frequent flights over the BP oil spill.  Those flights cost more than $3.9 million for 350 hours of flying time.

 

Get over it!  We’re being fiscally responsible.

 

            But, when the legislative game ended what we found was that Jindal increased to $5,000 a tax credit available to parents who pay tuition to private schools.  We found that the state run education district (RSD) still needed double payment of its state insurance and another $8.6 million was drained away from public schools.  We found too that another $8 million was needed for a "pilot” voucher program to benefit still another group of families paying tuition to private schools in New Orleans. 

 

            What is it with Bobby Jindal?  Does he think he can buy votes in New Orleans and not raise hackles in Dry Prong, Minden or Shongaloo?

 

            In the mean time back at the state treasury the dollars were stacking up.  At the end of April the difference was only $24 million less than last year; and income tax collections have a habit of bringing in $500 million each month in May and June. In May of 2011 the State Revenue Department showed the Grand Total of State and other Revenues to be $666,333,170.71.  Might the Treasurer report, in July, that the state wound up with close to a BILLION dollars in surplus? 

 

            Perhaps one could have expected a large deficit two years ago when the national economy was losing 700,000 jobs a month.  Louisiana, as is its habit, typically doesn’t mirror the job losses of the nation.  It is hard to rationalize such when the Haynesville Shale drilling bonanza pumped $3.1 billion into the state economy in 18 months.  It’s hard to rationalize that when that single component of the Louisiana economy made thirty-one new millionaires in northwest Louisiana.

 

            Somehow the rationale that shale drilling would not have much impact on state revenue because severance taxes are deferred until the finding and drilling costs per well are recovered.  I guess the Revenue Estimating Commission wasn’t aware that the rich yields in Haynesville allow cost recover within three months.  In May alone severances taxes have grown from $54.9 million in 2009, to $68 million in 2010, and in 2011 to $70.8 million.  I guess that’s not reflective of Haynesville making a contribution to state revenue rising?

 

            In December, a national organization reported that Louisiana ranked fifth best in the nation in the growth in goods and services produced in 2009.  In fact, while Louisiana’s economy was growing, 39 other states had a decrease in the value of their goods and services. On a regular basis since that report Jindal has boasted of a series of economic development wins from the major Nucor Steel mill to glass manufacturing to electronic gains and even to chicken plucking. 

 

Of course one might wonder that Pilgrim’s Pride chicken owner Bo Pilgrim gave Jindal a campaign contribution; or that Edison Chouest Offshore and Albemarle expansions were also accompanied by sizable contributions to Jindal’s campaign.  One might even wonder that the failed effort to sell Louisiana prisons had anything to do with sizable contributions from several prison operations companies that operate some prisons in Louisiana.  But, for whatever reason these expansions, should have provided a second hint that perhaps the chaos-building deficit would not materialize.

 

Stakeholders in the education of Louisiana’s children not only pay a significant price in straining to meet Jindal administration demands for student achievement with less; they are assaulted by an all out effort to charter even larger numbers of schools that will open opportunities for education operating companies to siphon still more dollars from the classroom.

 

Now that is what masquerades as an education governor?

 

 

 

Don Whittinghill

Consultant


 

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