Political problems

That's one way of putting it. 

Gov. Jeff Landry’s ambitious plan to overhaul Louisiana’s tax structure has largely been pared down to a more modest goal – cutting state income taxes.

 
Lawmakers are working on a way to make sure the state can pay for that desired tax reduction while not having to make damaging cuts to areas such as health care and higher education.

The paring down was part of the plan, though.

The idea here was always solely about affecting a massive shift in tax burden from the richest (corporate and high income taxpayers) to the poorest (people who pay sales taxes on every day essentials.) The feint at lessening the blow by cutting out special exemptions and tax credits was a ploy to establish buy-in to the scheme as various lobbying groups mobilized to save their own privileges. Mission accomplished. 

This week, the Senate declined to fully roll back some of the state’s expensive business incentive programs, such as its movie and television tax credits and historic preservation tax breaks that collectively cost the state hundreds of millions of dollars annually.

A plan to eliminate a state inventory tax credit, which covers taxes businesses pay to local governments, has been delayed until 2026, and a proposal to increase a tax on heavy machinery and equipment used by industrial employers has also been scrapped.

And now we're back to where Landry and Richard Nelson always planned for us to be. Legislators will approve a higher sales tax than their own bill originally targeted vs. the prospect of more cuts to health care and higher ed. A win-win for them despite the conventional reporting that posits it could lead to "political problems." 

If he doesn’t find a way to make up for that money, Landry runs the risk of revisiting the same political problems that plagued former Gov. Bobby Jindal.

Jindal also cut income taxes without replacing the lost revenue or finding a permanent way to cut government spending. His policy led to chronic budget problems for years and made the former governor deeply unpopular when he left office.

Bobby Jindal left office after having steamrolled to a second term and launching an ambitious (although comically hubristic) Presidential campaign. You could say he was unpopular, but he never seemed to notice that. He seems to be living well. More to the point, the income tax cut Jindal pushed through (quite similar in nature to the one Landry is proposing now) set the stage for budget cuts and the currently regressive taxation regime that are core elements of the Republican ideological project.

And now they are about to build on that. If those are "political problems" they're not "plaguing" Jindal or Landry so much as they are Louisiana's poor and working classes instead.

Bobby Jindal pantsed us

DEQ still hasn't quite gotten their britches pulled back up.

The fish testing program cost about $500,000 per year and led to an average of three new mercury advisories per year.

That all ended in 2008, when DEQ gutted the program amid a push by Gov. Bobby Jindal to force cuts across various state agencies. For eight years, there was no fish tissue sampling, except in the aftermath of a chemical or oil spill.

State law requires the program to draw its funding from tax dollars, grants or donations. DEQ has been hesitant to ask for more funding from the Legislature or push for a rule change that would allow the use of money from fees or fines.

In 2015, environmental groups put pressure on DEQ to revive the program. “We had to embarrass the hell out of them,” Kohl said. It worked, apparently.

“Our butt was hanging out and we had to cover it up,” Piehler said.

This also says that Louisiana's waterways are particularly dangerous environments for mercury poisoning in the fish that live there. But, you know, as President Trump says....

“Atmospheric mercury is less than it was, and most of the mercury we were getting was from aerial deposition,” he said.

That doesn’t mean testing should cease, Kohl said.

“If you don’t test, you don’t find problems,” he said. “Some people like that. Ignorance is bliss.”

Do the collapse

Turns out they have to blow more stuff up. Terrific way to ring in the New Year. Don't worry. The football and tourism related events will still happen, of course.

City officials presented a timeline for when the implosion of the failed Hard Rock Hotel construction site would happen shortly after they announced the demolition of the building would move forward at a press conference Tuesday evening.

Fire Superintendent Tim McConnell told media the building should be imploded in nine weeks, with recovery of the bodies of two still-missing workers and further investigation to follow. A three-month cleanup will also take place after the planned implosion.

The only factor that could move the demolition past the nine weeks is the College Football Playoffs and New Year's Eve events, McConnell said. "We will not let it interfere with CFP," McConnell said.

This also says they're going to stabilize the "Alpha" crane that has been dangling over Canal Street since the last time they set off explosions down there.  That one collapsed into the now-condemned building while the other broke in half and nose-dived into Rampart Street where it punctured a sewer line.

This result was different from the elegant "umbrella closing"  effect officials said they were going for beforehand. Nonetheless, we were all told immediately afterward that the crashing and dangling was, in fact, exactly what they meant.  McBride also noticed this discrepancy and points us to this video where the contractor continues to say that it happened just like they planned.  McConnell even said at the time that after the demolitions, the dangling Alpha crane was "very stable." It's weird though that the thing they did on purpose just left something that still needs to be stabilized hanging off the side of the building for a month. Sounds fishy to us. But it was good enough for the sages at Georges Media where the moral of the story was, as usual, everyone in charge is doing a great job.

For a different take on that, please see this month's Antigravity where Jules Bentley offers this counterpoint. 

It’s not surprising that Mayor Cantrell now wants to raze the whole structure to the ground, since this murder monument indicts her entire political class. What a towering tribute to its enablers the Hard Rock Hotel presents, a great slumping sundial whose gnomon points to their collective moral lodestar, unquenchable greed. It celebrates the greed not just of its developers but all who collaborated on, encouraged, profited from, and rubber-stamped this deathtrap. The list of the guilty is long, and every name on it is written with the blood of the building’s laborers—for Mammon, whose temple this is, desires human sacrifice.

Yeah you are going to want to read the rest of that. Jules is probably the only writer in town who can so, um, lovingly pull together the threads of New Orleans power, politics and exploitation that run through this story.  (Others who lack the patience and craft can only blurt stuff out into the void.)

I do feel compelled to add one bit, though.  In this passage, where Jules is describing one of the Kailas family's several scandalous entanglements with the corrupt polity, we learn what became of their Bayou St. John home.

Because the Kailas family is one of metro New Orleans’ biggest landowners and developers, almost everyone’s in bed with them, including former Governor Jindal, whose various campaigns they provided with tens of thousands of dollars of donations, monetary and in-kind.

In just one year under Jindal’s tenure (2011-2012), the Kailas-owned Lago Construction firm got more than $1.5 million of taxpayer money through state contracts—contracts which, thanks to the hard work of WWL’s investigative team and David Hammer, we now know were variously improper and fraudulent. On dates they charged taxpayers for long days of public service work, Lago employees were instead laboring on the Kailas family’s multi-million dollar Bayou St. John mansion. You won’t find them there now, alas. In 2016, they sold that property to Metro Disposal CEO Jimmie Woods for ten dollars.

Woods immediately put the Kailas house to use as a venue for political fundraising events. This one was for JP Morrell who was considering a run for mayor at the time.  Look at all the folks who showed up.

In addition to Gov. Edwards, the $250-per-person fundraiser at businessman Jimmie Woods’ home on the bank of Bayou St. John drew a host of other Democratic officials — U.S. Rep. Cedric Richmond and Public Service Commissioner Foster Campbell, who is running for U.S. Senate, as well as City Councilman Jared Brossett and current and former members of Mayor Mitch Landrieu’s administration. The packed event suggested an unusually strong coalition around a term-limited state senator, and Morrell acknowledged there is widespread speculation around who will run in New Orleans’ upcoming mayoral race.

Not long after that Woods hosted a similar event for Karen Carter-Peterson.  She didn't run for mayor either. But that's not the point here so much as it is that, politically speaking, New Orleans is a small town where the money does seem to go around and around in a very tight circle. You can get a pretty good glimpse of it behind just about any building you knock over.

Never stop shock doctrining

Does anyone ever read these mayoral emergency declarations? This one was scanned sideways so it's very likely no one will look at it for long. Basically it names an "Emergency Authority" comprised of the mayor, the chief of police, the fire chief, and the city's "Homeland Security" director (which, no, of course that last position should not exist.)

The Emergency Authority is empowered to "commandeer or utilize any private property it finds necessary to cope with the local disaster emergency."  It is also empowered "to direct and compel the evacuation of any and all persons from any part of the city."  In other words, they've empowered themselves to arrest you or confiscate your personal property without cause.  Do they really need to do this?  This isn't to say that our public safety officers shouldn't direct and assist the public as to the best way to keep safe during an emergency.  It's fine for the police to set up barricades, or for the mayor to recommend an evacuation. But they don't need any special power to get cooperation from the public. The fact that they automatically assume they do speaks to the hard authoritarian bent of municipal governments in the 21st Century.

There's some other questionable stuff in there. For some reason, the Emergency Authority has to the power to "limit the sale, dispensing, or transporting of alcoholic beverages."  Which is weird since many of us would consider those a critical necessity in these situations. Thankfully, the current Authority appears to agree with us about that.

“Go get a drink. Watch it on TV,” said Collin Arnold, the city’s director of homeland security. “If you’re in line of sight of this, you’re too close.”

The part of the declaration that most interests us, though, is the part where the EA is empowered "to suspend the provisions of any regulatory ordinance prescribing the procedures for conduct of local business, or the orders, rules or regulations of any local agency, if strict compliance with the provisions of any ordinance, rule or regulation would in any way prevent, hinder, or delay necessary action in coping with the emergency."

What that means is they can rush a whole bunch of no-bid contracts into effect. According to WWLTV, even those expedited negotiations haven't gone smoothly. 

NEW ORLEANS — Danger and uncertainty surrounding the demolition of two massive and unstable cranes inside the Hard Rock Hotel collapse site has delayed the risky operation for a second day in a row.

But financial issues may have also played a role, at least in causing the first delay, which pushed back the implosion first planned for Friday afternoon to Saturday.

The developer of the ill-fated hotel project, a group led by Mohan Kailas, did not pay the $5 million demolition price until Saturday morning. The demolition team, a joint venture between D.H. Griffin Wrecking Co. of Greensboro, N.C., and Lemoine Disaster Recovery of Lafayette, required full payment into a trust prior to the demolition, according to public records requested by WWL-TV.

Now maybe it's a stretch to think either Kailas or the contractors would be so crass as to use the "ticking clock" of a collapsing crane as bargaining leverage.  I would have been at least a skeptical of that. But then I read that LaToya says of the negotiations, "This work has not contributed to delays or diverted from the stated priority of keeping the public safe during this trying time," which sounds to me like it has definitely contributed to the delay.

Also, hey, look who is here!

Sanford said Lemoine, a disaster consulting firm that was purchased earlier this year by former Shaw Group founder Jim Bernhard’s Bernhard Capital Partners, is a part of the demolition team. On its website Lemoine touts its “ethical working relationship with the State of Louisiana and parish and government agencies.”

Bernhard's "ethical working relationship" with state, local and federal government in under emergency conditions  is well documented. The Shaw Group picked up a $100 million deal with the Corps of Engineers to "de-water" the city after Katrina. 

Those contracts were awarded without competition under rules that allow agencies to bypass normal procedures during an emergency. Several went to companies that have been major financial supporters of the Bush administration. One firm, Shaw Group Inc., of Baton Rouge, is on the client list of lobbyist and former FEMA director Joe M. Allbaugh, though he has said he does not get involved with contracts.

Shaw also came under criticism for having received favors from the Jindal Administration's dispersal of post-Katrina hazard mitigation contracts.  Shaw also took advantage of an emergency declaration to help Jindal build his infamous "sand berms to nowhere" after the Deepwater Horizon oil disaster.

The berm project has been a boon to Louisiana industry: although many of the dredging companies working on the project have out-of-state headquarters, all have a major presence in Louisiana. The Shaw Group, the lead contractor on the project, is based in Baton Rouge and has been one of Mr. Jindal’s leading campaign contributors over the years.

Most recently, Bernhard's relationship with state government extends to a deal with the Edwards administration to privatize energy systems in state buildings.  Although his companies have frequently contributed to Republicans, Bernhard is a registered Democrat.  Clearly he's willing to support any elected person in a position to help him out.  This year he "supported" Edwards by allowing himself to be talked out of running against him. 

Bernhard Energy Solutions partnered with the HVAC company Johnson Controls at the request of the Edwards administration after both firms submitted proposals to the state. Bernhard Energy Solutions is one of several companies controlled by Bernhard Capital Partners, a private equity firm run by former Shaw Group chief executive and Democratic Party official Jim Bernhard, who was floated as a potential candidate for governor before ruling it out last year.

Threatening the Governor's job may not be your traditional emergency management situation but obviously, he takes that pretty seriously.   In any case, Bernhard does appear to know his business.

Why is John Bel soft on vouchers?

Good news! John Bel says he's finally ready to do something about Bobby Jindal's disastrous school voucher scheme.

Louisiana Gov. John Bel Edwards said he will call for an overhaul of the state’s scholarship voucher program, saying the structure that uses public money to pay for private school tuition for nearly 6,900 underprivileged students was poorly conceived.

In an interview just weeks after an in-depth examination by a consortium of local and national news organizations highlighted flaws, Edwards said he will call on state leaders to reform the $40-million-a-year Louisiana Scholarship Program. The governor did not specify what changes he will seek, but said the goal should be for schools in the program to perform better.

He doesn't say what he's going to do.  But he definitely is not interested in abolishing the voucher program.  Which raises the question from us, why on Earth not?

Last month, WVUE, WWNO, Reveal, and what's left of NOLAdotcom collaborated on a damning series of reports confirming what most of us already knew about the voucher scheme. The plan was always more about siphoning money away from public education regardless of whether Louisiana students realized any benefit, which, of course, they did not.

Seven years later, however, the $40-million-a-year Louisiana Scholarship Program has failed to live up to its billing. The nearly 6,900 students who’ve left public schools have instead been placed into a system with numerous failing private schools that receive little oversight, a months-long examination by a coalition of local and national media organizations has found.

And this was always at least part of the intent. We've known pretty much since the beginning that the voucher scheme was a direct attack on the concept of public education, an avenue for Bobby Jindal's cheap pandering to science denying evolutionists, and an obvious opportunity for the sort of corruption described in these reports.

 It's even worse than you might think, though. As the Bayou Brief points out, the vouchers aren't merely a means of diverting public money into unaccountable private hands. They're also a vehicle for ultra-wealthy individuals like Eddie Rispone, for example, to set up very large tax loopholes for themselves.

In December of 2014, he donated $1 million to ACE Scholarships Louisiana, a Student Tuition Organization, and according to an audit of ACE, 100% of his donation was rebate eligible.

While we do not know Rispone’s income or how much of his donation was used toward scholarships, it’s possible to estimate how much Rispone could have profited off his $1 million donation.

If Rispone’s entire donation was used for scholarships in 2015, assuming Rispone did not donate more than 50% of his annual gross income and that he was in the highest income bracket (36.9% marginal tax rate), Rispone’s donation qualified him for up to a $950,000 rebate from the State of Louisiana and a federal tax savings of $369,000.

Therefore, his $1 million donation had a potential return of $1,319,000 ($950,000 + $369,000) for a profit of $319,000.

So, given all of this, since we know the voucher program is a disaster for Louisiana education,  and since we know criminally wealthy oligarchs like Rispone are benefiting from it. Why does John Bel say we should merely "reform" (he doesn't specify how) rather than abolish it?  Rispone is even applying a significant portion of his ill-gotten and protected wealth to challenge John Bel in this year's election.  Why would he let him get away with that?

What could possibly go wrong?

The John Bel administration is about to enter into a big contract for privatizing energy systems servicing state buildings. The deal is with a company called LA Energy Partners.  Who are they?

The agreement would see LA Energy Partners take over the chiller systems at the Shaw Center for the Arts in downtown Baton Rouge, as well as make a host of energy upgrades at 31 state buildings.

If approved, the deal would set the state for any state entity to “opt in” to a similar agreement with the company, which is a joint venture between Bernhard Energy Solutions and Johnson Controls Inc.

Bernhard sounds familiar to you probably.  Here is why.

Bernhard Energy is controlled by Bernhard Capital Partners, a private equity firm founded by Jim Bernhard, who co-founded and ran the energy services giant Shaw Group before its $3 billion sale to CB&I in 2013. Bernhard, a former Democratic party official, was floated as a possible candidate for governor this year before he ruled it out.

Oh boy oh boy. Sure, Bernhard has been a big wheel in the State Democratic Party but his Shaw group was always happy to contribute to whichever Democrat or Republican was in a position to help it make money.  It was at least in part through Republican channels that Shaw made a ton of money "dewatering" New Orleans after Katrina.

Last week FEMA gave out hundreds of millions of dollars worth of contracts to engineering and construction firms to build an estimated 300,000 temporary housing units. Those contracts were awarded without competition under rules that allow agencies to bypass normal procedures during an emergency. Several went to companies that have been major financial supporters of the Bush administration. One firm, Shaw Group Inc., of Baton Rouge, is on the client list of lobbyist and former FEMA director Joe M. Allbaugh, though he has said he does not get involved with contracts.

Shaw also was picked last week by the corps for a $100 million contract, with one of its first tasks to pump floodwater out of New Orleans. The agency contacted two other companies to generate competition for the work, a corps contracting official said yesterday, but only Shaw responded.

Later, Shaw greatly benefited from Bobby Jindal's Hazard Mitigation grant program which came under scrutiny in 2011 from the Legislative Auditor.

The findings seem to fit in with years of complaints from applicants and HMGP staffers alike, who said the program is plagued by miscommunication, convoluted verification procedures and ever-changing policies. The policy changes were mostly intended to speed up a program that took almost three years to pay significant dividends for homeowners but was "front-loaded" to pay program management fees to a prominent state contractor, the Shaw Group.

At one point late last year, one of every four dollars paid out by the program had gone to Shaw for administrative fees.

Despite these criticisms, Shaw's role in the program was continued and expanded. This was in addition to the scratch they picked up building Jindal's sand berms to nowhere following the 2010 BP oil spill. They must have just happened to be in the right place at the right time again.

The berm project has been a boon to Louisiana industry: although many of the dredging companies working on the project have out-of-state headquarters, all have a major presence in Louisiana. The Shaw Group, the lead contractor on the project, is based in Baton Rouge and has been one of Mr. Jindal’s leading campaign contributors over the years.

Anyway, so, according to the Advocate today, Jim Bernhard was thinking about running for Governor this year. This will be the second time he's almost gotten in John Bel's way but was convinced to step aside somehow.  Surely this new LA Energy Partners contract coming when it does is just a coincidence.

Meanwhile, back to today's story, look who else is here.

Bernhard Energy Solutions partnered with the HVAC firm Johnson Controls at the behest of the Edwards administration after both companies submitted proposals to land the state energy deal.

Ooohkaayy. So what we have here is a big expansive contract to do energy efficiency in government buildings involving one high profile political operator AND Johnson Controls.  Never seen anything like that before. What could possibly go wrong?

They call it a career in public service

Which is just a fancy way of saying take em for all they're worth coming and going.

Former Gov. Bobby Jindal, who made his opposition to Medicaid expansion in Louisiana a cornerstone of his gubernatorial platform and a talking point in his 2016 campaign for president, has joined the board of directors of WellCare Health Plans, Inc., a Florida-based company that "focuses exclusively on providing government-sponsored managed care services, primarily through Medicaid, Medicare Advantage and Medicare Prescription Drug Plans."

Medicaid gets cut. Medicaid gets expanded or shot through with bewildering rules and mechanisms designed to benefit private insurers and drug companies.  All of this jerking around can mean stability or banruptcy or even life or death for millions of people. For amoral grifters like Bobby Jindal, though,  it's all the same. Always another way to make a little money.

According to a filing with the U.S. Securities & Exchange Commission (SEC), Jindal will be serving on the company's Audit, Finance and Regulatory Compliance Committee and the Information Technology Oversight Committee. Wellcare board members receive $90,000 per year, the filing says, with additional annual retainers of $12,000 and $8,000 for the two committee positions. Jindal also will receive 405 shares of Wellcare common stock, which was trading at $307.48 on the New York Stock Exchange at day's end, making the compensation package worth more than $230,000.

Okay well maybe not just a little money. 

Here is some regulatory capture we can all get behind

As long as nobody is talking about abolishing the Louisiana Economic Development Department Of Corporate Welfare Money Gifting (yet) we might as well keep the pressure on it to use its powers for good. 

Louisiana Economic Development is asking a judge for at least $16.8 million in payments from Bell Helicopter over two failed deals in Lafayette to create jobs at a state-financed helicopter assembly facility.

The state agency said the Fort Worth, Texas-based helicopter company acted in "bad faith" by trying to get the state to accept a revised deal earlier this year, while the firm secretly moved its operations to Texas.

According to LED, Bell was seeking tax breaks from Fort Worth's local government and outlining a new "factory of the future" in Texas this year that would bring 400 jobs, all while failing to meet its obligations in Louisiana.

Y'all, Bobby Jindal gave away a lot of giant novelty checks to some pretty shady grifters while he was Governor.  It might be worth our while to run around clawing back as much of that money as we can that hasn't made its way all the way to Tahiti just yet. 

He really is gonna do the Bobby Jindal thing

The annoying thing about Mitch's big leap into national politics is the corporate press has a slower learning curve spotting the phonies positioned as corporate centrists than the ones who come from the hard right.  Which is why we're gonna have to put up with a longer period of fawning promotion from the very same pundits who saw through Jindal right away.

It doesn't help that Mitch has better chops. Mitch is every bit as brutal, self-centered, and unprincipled as Jindal was. But he pulls off the stagecraft much more professionally. It's hard to imagine Landrieu launching a campaign for President with a "Look, a turtle!" surveillance video, for example.   Although, he does have the equipment available to shoot such a video should he somehow decide to do so.

That Bobby Jindal legacy

Just a note to tuck away for when Fiscal Cliff Season gets into full swing.

Louisiana colleges were hammered by cuts over the last decade. The state spends $700 million less annually on its public colleges than it did in 2008.

The Governor's budget proposal comes out tomorrow.  The Legislature may or may not be going into special session soon. You're going to hear a lot from Republicans about how the problem is "too much spending." What they will mean by that is $700 million out of higher ed wasn't enough for their liking.

FNBC is looking to "lawyer up"

Some of the principles at the failed First NBC bank are starting to worry about the legal trouble they find themselves in. From the looks of things, they planned for this very scenario ahead of time.

Well before the bank failed, it took out five insurance policies aimed at protecting bank directors and officers from personal liability for bank business, court filings show. The company held roughly $60 million in insurance policies.

On Tuesday, attorneys for First NBC Bank founder and former CEO Ashton Ryan Jr. and former Chief Financial Officer Mary Beth Verdigets appeared before Magner after filing motions for their clients to begin collecting money from insurance policies, long held by the bank, to cover their mounting legal costs.

Magner deferred making a ruling on the insurance policies. At least one former bank official raised questions about how the proceeds would be tapped.

"People are getting demand letters, and they need to lawyer up," said William Aaron, a New Orleans lawyer who was a director of both the bank and its parent company. "The question is, is the court going to be a gatekeeper every time somebody needs to lawyer up?"

The Advocate reported a few weeks ago that a federal grand jury is looking into the bank now but we don't know what specific charges might be under consideration. We already knew that the bank collapsed as a result of Ryan's suspiciously risky bets on post-Katrina rebuilding tax credits that never paid off for the institution itself.

In the meantime, the scheming appears to have financed ventures benefiting some interesting public figures. Irvin Mayfield secured a pile of money from them he could throw into a pit. LaToya Cantrell bought a house which either she or the bank botched tax payments on for a while.  Then there was this elaborate scam where FNBC financed the "tuition rebate" portion of Bobby Jindal's school voucher program.

The tuition donation program is less generous but more flexible than vouchers, and it has grown fast after a slow start. Following an approach adopted by some other states, it relies on the tax code to direct money to private schools rather than the state appropriations that fuel vouchers. Last year, the tuition donation program allowed about 1,700 Louisiana children to attend 167 private schools, double the enrollment of the year before. Donors to the program are set to recoup about $7 million in taxpayer-funded rebates from last year's scholarships.

The program has been tweaked some in recent years. But it's still a means by which private schools and participating "donors" are heavily subsidized through an elaborate tax credit shuffle.

The basic setup is the same. Donors underwrite part, but not all, of a child’s private school tuition. Later, donors get back 95 cents for every dollar they give. And they can write the whole thing off as a charitable donation on their federal taxes.

Starting Jan. 1, though, donors to the program will no longer get recompensed via a state rebate that's paid out of general state tax collections.

Instead, donors will be repaid in the form of a credit on their state income taxes. That’s in line with how 16 other states already organize their own private school choice programs. Their tax payments then will be redirected out of the state treasury and into the hands of Louisiana private schools to offset student tuition.

The changes to the law will also limit participants to organizations who pay Louisiana income taxes. This will be sad news for some of the out of state participants who had been benefiting such as Chick Fil A and, yes, believe it or not, the Atlanta Falcons.

Anyway, getting back to FNBC, there's so much going on there that it's hard to pin down just what the Feds might be looking into. But you can see why they might be looking to being to lawyer up. You can also see why they might be reaching out for friends and allies who could still help them. One wonders, for example, if John Kennedy might be one such person.

WASHINGTON — In a Capitol Hill battle over the financial industry's use of arbitration clauses in contracts to limit class-action lawsuits, a key undecided Republican has attracted the attention of bank lobbyists and consumer advocates.

That person is U.S. Sen. John Kennedy, Louisiana's recent arrival in D.C. with a seat on the Senate's banking committee. So far, as the debate has started to percolate, Kennedy has kept his cards close the chest on how he might vote on a Republican-led effort to scrap an Obama-era regulation making it far easier for customers to bring class-action lawsuits against banks, credit-card companies and other financial institutions.

Kennedy is playing coy for now because he likes being feted by finance lobbyists, no doubt.  And maybe FNBC is more worried about criminal prosecution at the moment. But we're pretty sure John will be there, if not for FNBC, then for whoever the next fraud looking for legal protection might be.

Something something something #DrainTheSwamp

Comically corrupt businessman's administration hires comically corrupt businessman.  (Again.)

Bruce Greenstein, the former Louisiana health official who fought charges that he perjured himself during a state contract investigation, has landed a job in President Donald Trump's administration. He's been appointed chief technology officer at the Department of Health and Human Services, Politico reports.

The charter school con

There are multiple reasons people have gotten on board with "school reform" over the years. Most of them are bad. For many it is an end run around integration. For others it is an ideological experiment with "market princilples." For others, still, it is a desire to use public institutions as a vehicle for promoting and enforcing  their religious practices.   For Donald Trump's incoming Secretary of Education Betsy DeVos it is a little bit of all three.

DeVos is married to Amway scion Dick DeVos (whose father, Richard DeVos, is worth more than $5 billion, according to Forbes) and is seen as a controversial choice due to her track record of supporting vouchers for private, religious schools; right-wing Christian groups like the Foundation for Traditional Values, which has pushed to soften the separation of church and state; and organizations like Michigan's Mackinac Center for Public Policy, which has championed the privatization of the education system.

This week, Bobby Jindal praised Trump's choice of DeVos  calling her, "the breath of fresh air we needed."

Beyond the larger politics of it, the internal impetus behind the charter movement is economic.  Its implementation has meant a direct transfer of income away from teachers and toward administrators.

That's according to a report the Education Research Alliance for New Orleans released Tuesday (Jan. 17) that's sure to make waves.

New Orleans public schools now spend $1,358 more per student than a 17-district comparison group. But they spend $706 per student less on instruction, including teacher salaries and benefits

There are more administrators, and they typically earn higher salaries than they would have without the reforms," authors Christian Buerger and Doug Harris write.

New Orleanians apprehensive about the coming vicissitudes of Trump's America at least have the advantage of familiarity as they are already living a lot of it.

Non-levitating train to Disneyworld

It's almost a decade now since Bobby Jindal's fantasy nightmare about levitating trains to Disneyland killed our chance at a high speed rail project in Louisiana. At that time, the newly inaugurated President Obama had raised HOPEs that a forthcoming federal stimulus bill would fund our decades long dream of commuter rail between New Orleans and Baton Rouge as part of a longer line connecting us with Houston.   But Jindal helped introduce America to the style of paranoid obstructionism that would go on to help Republicans block a substantial portion of Obama's agenda throughout his two terms. It's been fun.

Anyway, it looks like we might be finally getting that rail service after all. It won't levitate or anything, but the plan is for these trains to actually go to Disneyworld.

Monday, the Southern Rail Commission distributed $2.5 million in federal funds to design, build and improve train stations in Louisiana, Mississippi and Alabama. A quarter-million went to Baton Rouge to develop plans for a train station at the old Entergy campus near the corner of Government and 14th streets.

The goal is to revive the passenger route between Orlando and New Orleans, which already has lines that run to New York, Chicago and Los Angeles. There would be a separate spur for riders to commute between Baton Rouge and New Orleans.

As always with this, it's not a good idea to hold one's breath. But if you are the optimistic type you might expect to see the BR-NO line up and running around 2020 or so. 

Bobby would have fit right in

Poor Bobby Jindal. He did everything an aspiring GOP big timer has to do to get elected or appointed to national office these days.  He always flanked to the right of the field no matter the issue. He took the Norquist pledge. He refused to see any problem that couldn't be solved by privatizing state assets away to cronies or at least cutting taxes for rich people.  He even got in on the racism, Islamophobia and anti-immigrant fervor that animates so much of the GOP base these days which was a bold move for a non-white son of immigrants to make.

None of this got him elected but, under different circumstances, it could have gotten him a role in the new Trump Administration. He would have fit right in.

In nominating billionaire activist Betsy DeVos for education secretary, Trump has signaled that, like Jindal, abandoning public schools is one promise he hopes to keep. Trump proposes using $20 billion in federal funds as block grants to encourage states to fund private-school vouchers. That would mean diverting another $110 billion in state and local funds to send students to private schools that conservatives like DeVos claim are superior to their so-called "government school" counterparts.

However, Trump and DeVos -- who has spent $1.6 million trying to influence Louisiana elections -- must persuade cash-strapped governors and legislators to spend scarce resources on a scheme that's failed wherever it's been tried.

This is where the disappointment of Jindal's voucher program enters the picture, as policy makers and the media will inevitably examine its dismal performance. At Jindal's urging, in 2008 lawmakers created the Louisiana Scholarship Program (LSP), enabling some disadvantaged students to leave public schools graded a C or lower and enroll in a participating private school. By 2014, more than 6,000 public school students attended one of 126 private schools.

Mann goes on to argue in that column that the negative example of Jindal's "failed" voucher program might prove to be a problem for Trump and DeVos's schemes moving forward.  

In a paper published last year by the National Bureau for Economic Research, three scholars documented "the large negative effects" and the reduced academic achievements of scholarship program students in 2013, the first year after the program's expansion.

"Our results show that LSP vouchers reduce academic achievement," the researchers concluded, explaining, "attendance at an LSP-eligible private school is estimated to lower math scores" and "reduce reading, science and social studies scores."

Why? "We find evidence," the researchers wrote, "that the negative effects of the LSP may be linked to selection of low-quality private schools into the program."

But, no, none of that matters. The whole point of the exercise is an ideologically driven assault on the very idea of universal public education.  In that respect, Jindal's Louisiana experiment and DeVos's in Michigan have been big successes. And now it's time to push that program at the national level. 

Bobby could have fit right in with Trump.  But he made that one fatal mistake of publicly attacking the boss that one time.  And, well, now he's got to go find something else to do.
 

Louisiana has a revenue problem AND a spending problem

Remember those two legislative sessions this year when a bunch of whiny babies couldn't raise enough money to fix the state budget?  Yeah, well, they didn't raise enough money. 

Louisiana will still have to make more than $600 million in midyear budget cuts over the next two months despite raising more than $1.5 billion in taxes last spring and cutting the popular TOPS scholarship program.

The state's budget cycle that ended in June had a $313 million budget deficit that must be made up in the current budget year. Louisiana's state taxes also aren't bringing in nearly as much money in the current year as projected. State budget chief Jay Dardenne said he expects an additional shortfall to be more than $300 million when its announced next month.

"I know many people thought we would have more money than we needed right now," said Ben Nevers, Gov. John Bel Edwards' chief of staff, during a budget meeting Monday (Dec. 6). "That just hasn't happened."

Dardenne said the governor will be proposing cuts to higher education, hospitals for the poor and uninsured as well as services for people with disabilities in the middle of the year because there isn't enough money to prevent those types of reductions.

Those cuts will be proposed despite the fact that legislators spent months in Baton Rouge last year looking for ways to spare higher education, hospitals and people with disabilities from budget cuts. The state's "rainy day" fund -- which is supposed to help cover unexpected financial shortfalls -- will also likely be used.

On the one hand, the Republicans in the state House of Representatives (with moral support from Governor Treasurer Senator Kennedy) refused to do anything to help raise the money necessary to fix the gigantic holes Bobby Jindal had blown in the budget. Louisiana has a "spending problem, not a revenue problem," Kennedy insisted. We just need to stop buying art or something.. oh and paying for poor people to go to the hospital.

On the other hand, Bobby Jindal had already blown the hospital money helping his friends get rich.  Nevertheless we were promised by Jindal and his acolytes that the privatization scheme would save the state money in the long run. (Some of us were skeptical.)  Anyway, it turns out today that a big part of the problem is.... 

Legislative Fiscal Office: Budget for privatized #LSU hospitals, clinics has grown 22% since 2013-14 year https://t.co/GuWtq76mFs #lalege

— Melinda Deslatte (@MelindaDeslatte) December 6, 2016

So, yeah, we do have a  bit of a spending problem there. 

Bobby Jindal will be ok

Bobby had practically everything Donald Trump could have asked for in a Secretary of Health and Human Services. He knew how to privatize public benefits and position cronies such that they can profit from the sell off. He knew how to pander to Islamophobes. But it turns out he didn't quite make the cut.

If we had to guess at what Bobby's mistake was, we'd probably say it had something to do with having exhibited insufficient deference to Trump that one time way back when.  Then again, nobody paid much attention to Jindal during the campaign, even while he was calling Trump a "madman."  The rumor was Mitt Romney, whose criticism of Trump came with a higher profile and at a more important point in the calendar, could still have been Secretary of State if only he had apologized.  Jindal's truly unforgivable sin in Trump's eyes probably was publishing his remarks on CNN's website.

Anyway, Bobby will be fine.  He can go right back to accepting money from various think tanks and lobbying groups to produce.. well.. more CNN.com op-eds and such for the next few years until it's time to maybe run for some other office if he wants. So don't feel too bad for him.  Even if the Trump Administration does end up collapsing in a series of scandals, impeachments, and resignations, I don't think HHS is technically in line for the Presidential succession anyway. Although, if we were ever going to find out, this would be the time.

Bi-partisan can kicking

John Bel Edwards boots a Medicaid payment across with an assist from Bobby Jindal.

But the bulk of the $315 million midyear budget deficit will be dealt with by pushing off $152 million worth of financial payments to Medicaid providers into the next year. The payments will eventually have to made -- so the expense doesn't go away -- but delaying them will help the state avoid substantial cuts in the short term.

This is the second year in a row these Medicaid payments have been delayed to deal with a midyear budget deficit. Gov. Bobby Jindal also pushed off the payments a year ago to cope with a $500 million midyear budget shortfall last November.

Under Jindal, the state government made just 11 payments to Medicaid providers in 2015, instead of required 12. To make up for that, the Edwards administration was supposed to make an extra payment, 13 in total in 2016. But now, Edwards' administration will make just 12 payments -- leaving the extra payment that wasn't made during the Jindal administration still hanging.

"It's the Jindal payment that seems to be lingering," said House Appropriations chairman Cameron Henry, R-Metairie. "We are just pushing the payment so we are not really fixing the problem."

Maybe they can keep stiffing these Medicaid providers until Trump scraps the whole social safety net anyway. What will they win, then?

How did we get here

Obviously Governors Kennedy and Landry and Henry consider this ancient history by now. But it's nonetheless worth noting how we got here.

Templeton, the New Iberia chief for IMC, said the downturn in the oil and gas industry has hurt the Acadiana economy, including those who provide health care. But, he said, the real economic crusher for the state’s medical community has been Louisiana’s reluctance to expand Medicaid coverage for the poor.

That situation is changing: On Wednesday, Louisiana started enrolling more people in Medicaid, the federal health insurance for poor people.

Templeton said, “For many years, we left significant federal matching dollars on the table,” which “caused significant stress on all of the health care providers across our state.”

Medicaid expansion was blocked by former Gov. Bobby Jindal, who sought to fortify his conservative bona fides for a run at the Republican presidential nomination.

That was fast

Just 3 days ago

So how much longer before Jindal endorses Trump? https://t.co/cduijXVDuD

— skooks (@skooks) April 30, 2016

Today:

Though he spent the majority of his campaign for the Republican nomination railing against Donald Trump, former Louisiana Gov. Bobby Jindal said Tuesday that he will vote for the real estate mogul, reluctantly, if he becomes the nominee.

Appearing on CNN, Jindal responded to comments that former Utah Gov. Jon Huntsman made to POLITICO last week in which the 2012 presidential candidate and former U.S. ambassador to China remarked that Trump is better positioned than any other Republican candidate to assemble a coalition across party lines.