The metastasizing revenue error

Lost in all the back and forth negotiations and legal maneuvering  between the New Orleans Public School District and the City over finances, no one has yet adequately explained the "accounting error" that led to the schools' budget deficit in the first place. Now it turns out that the errors are not necessarily limited to NOPS only.

This story says the city may have overestimated revenue projections for this year by some $18 million. 

New Orleans officials overestimated 2024 property tax collections by $18 million, further complicating what has become a fraught year for city budgeting. 

The revelation came during the quarterly Revenue Estimating Conference, when the city’s chief economist, Matthew Cooper, said he misjudged how much of the city's assessed property taxes would actually be paid.

The error could have implications for other taxing bodies that rely on City Hall revenue estimates. The Orleans Parish School Board last year discovered a $50 million deficit, which school officials have partially blamed on bad revenue forecasting by the city.

City finances are incredibly complicated and the shortfall could be the result of multiple types of errors and shenanigans. The article emphasizes the lag effect from appeals after a reassessment year for one rather benign example. But note also, in this passage, the effect of a rapidly sickening economy.

But the overall property tax compliance rate is a combination of both real estate and business inventory taxes, and inventory compliance sagged to 78%. Inventory taxes are assessed every year, but Cooper said he didn’t know if the 2024 compliance rate is typical. He attributed it to businesses that closed and didn’t pay inventory taxes, but didn’t say if that occurred more frequently last year than other years.

“They don't want to pay their inventory if they’re out of business. They can't pay their bills in the first place,” Cooper said in a brief interview.

I'm sure the next mayor and council will figure a way out of it though.  Probably the plan will involve bigger and better tax breaks for hotel developers. 

NEW ORLEANS - After months of work with numerous stakeholders, Council Vice President Helena Moreno is introducing a proposal to create clear and concise regulations for developers to receive a Restoration Tax Abatement (RTA). For far too long, existing guidelines have been confusing to applicants, appeared inconsistent, and contained some outdated policies that do not support good development projects, nor do they ensure accountability on behalf of RTA recipients. Plus, approvals for RTAs appeared to be subjective. Moreno now wants to ensure that the determination is based on meeting criteria along with providing clarity and accountability to the program.

The Restoration Tax Abatement (RTA) Program provided by state law allows the City Council the ability to approve a tax abatement for commercial property owners and homeowners who expand, restore, improve, or develop an existing structure in a downtown development district, opportunity zone, economic development district, or historic district. If approved, the owner has the right to pay ad valorem taxes based on the assessed valuation of the property for the year prior to the commencement of the project for five years after completion of the work. 

There's always money in the litigation stand (also some notes on the school board race)

They say you can't fight City Hall. In New Orleans, that has been especially true. For a long time, the city was notorious for refusing to pay up on court judgments against it. This year, the city council has begun to rectify that. Though, not all at once. 

Last month, the New Orleans City Council approved legislation requiring the city to almost immediately start paying out the oldest state court judgments on its books, those dating from the late 1990s until 2006. All remaining judgments must be paid off by 2027.

The payments will consist of only the original judgment amounts without interest — a caveat that has frustrated plaintiffs in some of the oldest cases, whose claims have accrued decades’ worth of additional interest fees.

Still, if you are in a hurry, there are some tricks to getting the city to cough up. For example, if you are the Orleans Parish school system, you can... commit an "accounting error" that blows a $36 million hole in your own budget.  Suddenly, the checkbook opens! 

Amid a massive financial crisis spurred by an accounting error, the Orleans Parish School Board has agreed to dismiss a years-old lawsuit against the city of New Orleans for $20 million in cash and $70 million in funding guarantees. 

While school leaders across the city may be reassured by the quick $20 million payment, which will help plug budget holes for the 2024-25 school year, charter officials are still anxiously awaiting final details on the district’s promise to directly support their school budgets and students in the face of the shortfall that remains, which is estimated at $16 million – but may be more, depending on what financial advisors find as they look through district ledgers.

This settlement has both short-term and long-term implications. By the end of this calendar year, the city will pay the school board $10 million, with another $10 million to follow by April 1; the agreement also directs the City Council to pay an additional $70 million through education-program funding over the next 10 years. A promise education advocates are happy to have in place with council and mayoral elections coming up.

The $20 million comes in concert with a series of last minute City Council additions to the municipal budget touching on a number of needs including homeless services, staffing needs in certain departments, and the Algiers Ferry. They also added some questionable items, like $5 million for Troy Henry's Six Flags grift and $12 million for.. whatever is going on at Charity Hospital now. (Or maybe not, actually! More on both of those topics in another post later.)  

There's a bit in the Verite article where members of the council and administration pat each other on the back for cooperating to solve these problems. But the reason they were able to be somewhat generous now is because the austerity cup and ball game the Cantrell administration has played in recent years has left an outsized reserve of unspent revenues. We've written about this quite a few times, actually. Even during the pandemic, the sales tax receipts weren't as bad as Gilbert Montano's budgets projected. But the imaginary projected deficit just around the corner kept us from even spending COVID relief funds in a timely and effective manner. I've argued, and continue to believe, this was an intentional manifestation of the Cantrell administration's conservative ideology. Anyway, the city has these funds available and the council is right to use them. The fact that they weren't included in the mayor's proposal is evidence that the council had to force it to happen.  Just imagine what they could have done if the school system hadn't set itself on fire. 

Speaking of which, did you know, there is one open seat on the Orleans Parish School Board waiting to be filled?  It's on your December 7 ballot. 

The only competitive New Orleans race in the Dec. 7 runoff election will pit a political newcomer against a long-time fixture in the city’s education sector for a seat on the Orleans Parish School Board. 

Gabriela Biro, a Gentilly hairstylist and first-time political candidate, said she decided to run for the 2nd District seat because she didn’t feel comfortable voting for the other candidates running in her district. The 2nd district includes New Orleans East, Gentilly, Pontchartrain Park and the Upper 9th Ward. 

“I had been tired of choosing between the lesser of two evils in many voting instances,” Biro said. “And I was like, I’ll just do this.”

Biro came in second in the Nov. 5 primary election, where none of the three candidates for the seat cleared the 50%-plus one threshold to avoid a runoff.

Biro’s opponent, Eric “Doc” Jones, came in first in November. Jones, who previously ran for a seat on OPSB and the state Board of Elementary and Secondary Education, has worked in education for decades — first as a teacher and later as a charter school board member and education consultant.

It was a little bit surprising to me that the odd man out of the runoff, Entergy executive Chan Tucker, was the most heavily funded by the national charter school lobbying Death Star that has been placing candidates on school boards with relative ease for years now. Notice also that this article quotes BOTH candidates statements that suggest openness to taking more schools back from the chartering organizations.  Looks like twenty years of New Orleans's "experiment" with an all-charter school system hasn't been a fantastic experience for voters. 

Of course, anti-charter rhetoric in the runoff is a lot more believable coming from the union-endorsed newcomer than it does coming from the former charter school board member and "education consultant" who once worked as a recruiter for Teach for America. Especially now that he's adding equivocations. 

In an interview last week, Jones called the school district’s structure “dysfunctional.” He ran his initial campaign this year as a pro-district school candidate, saying that he would like the district to take over failing charter schools. His stance drew the attention of pro-charter groups, which spent over $200,000 against Jones and another pro-district candidate as they campaigned for the Nov. 5 election. Last week, Jones said the district should avoid taking over failing schools and should instead partner with them to avoid closures. Jones said he would adjust the accountability framework for schools.

Jones said he favors district oversight, but only to a point: “As long as the oversight doesn’t interfere with their day-to-day operations, it doesn’t interfere with hiring practices, it doesn’t interfere with their curriculum selection, it doesn’t interfere with their mutual contracts they have in their building.”

The district should do "oversight" that doesn't actually have anything to say about how a charter school operates.  Okay, got it. 

That article also features an amusing dialog between Jones and the reporter asking about a grade inflation scandal that got him kicked off of the Coghill Charter board as well as a series of ethics violations and resume discrepancies. To me, the funniest one was the part where we learn "pro bono" is the Latin for "give me $5000." 

Verite News confirmed that he has worked at the school, albeit in a pro bono position. In 2015, the Louisiana Board of Ethics filed charges against Jones over his employment at the school. According to the complaint, Jones worked as the school’s chief academic officer, a position for which he received no compensation. 

The ethics charge stemmed from $5,000 he invoiced the school for staff training, even though such training was part of his normal duties in the job for which he agreed to work for free. The ethics board later voted to issue a “letter of caution” to Jones, dismissing the charges.

But there's more in there I wouldn't want to spoil. Just know that Verite's questions to Jones definitely do not make him mad at all. 

Anyway, one of those candidates will be working on solutions to the school system's ongoing fiscal crisis next year.  Which one should that be?

Seems bad

I don't really know what else we're supposed to say about the legislative session.  Every week is just gonna be a new load of very bad ideas cruising right on through.  Today, the latest scheme for de-funding public education passed out of committee without objection. 

Elected school board members also are starting to speak out against ESAs. On Thursday, just hours after the pro-ESA rally in Baton Rouge, the Livingston Parish school board discussed the bills at a special meeting.

One board member warned that a reduction in state funding could force the district to close schools and lay off teachers. Superintendent Joe Murphy said that an ESA program open to all families could guzzle up tax dollars, leaving less money for the “minimum foundation program,” or MFP, the state’s public school funding formula.

“I think this absolutely has the potential to devastate our schools from an MFP standpoint,” Murphy told the board. After all, money for the ESA program “has got to come from somewhere.”

The money coming out of the public schools' MFP will be at least half a billion dollars a year, in fact. But that's far from the only way in which our "fiscally conservative" legislature has determined to bankrupt the state this year.  Keeping in mind the already much talked about half billion dollar "fiscal cliff" that approaches in 2025, lawmakers spent the special session on "crime" adding tens (growing perhaps to hundreds) of millions of dollars to the budget for throwing people in prison and keeping them there. And the current session may expand that further. Bills are advancing that would jail people for panhandling on the streets or perhaps attending professional conferences. Maybe those are the same thing. Or at least one leads to the other. I haven't quite worked it out. 

Anyway, the legislature has the big checkbook out. But we know how much these fiscal hawks like to talk about prudent budgeting. So they must have some pretty great expectations of future revenues. Wonder where that's going to come from.  One things for sure, it won't come from the oil companies. 

The state House on Monday passed a bill that would cut the oil severance tax rate by 4 percentage points, a measure that aims to revitalize Louisiana’s oil industry but could leave an $80 million gap in state tax revenue.

House Bill 259, sponsored by Rep. Beau Beaullieu, R-New Iberia, faced virtually no pushback on the House floor, passing the chamber 86-13. It now heads to the state Senate.

With a vote of 96-6, the House also overwhelmingly passed a second Beaullieu bill, House Bill 418, which would halve the tax currently levied on oil and gas produced by wells that have been orphaned and inactive.

The Louisiana Budget Project.. or whatever the hell they call themselves now.. these NGOs "re-brand" themselves all the time for no reason..  estimates the severance tax cut could end up costing the state $80 million year.  Seems bad. 

What happened?

We did it! We're back, everybody. 

Revenue projections

The Cantrell administration expects general fund revenue of more than $762 million, driven by sales taxes, property taxes, licensing and permitting fees, and more. The remainder of the operating budget is funded via revenues earmarked for specific purposes like federal and state grants and specific districts' property tax funds. Those revenue projections suggest that the majority of the city's revenue streams will return to pre-pandemic levels, according to Montaño.

A whole year ahead of time, according to 2021 Monatno, anyway. 

New Orleans is set to receive $388 million from this year’s coronavirus stimulus package, and while council members are calling to spend at least some of that money, Mayor LaToya Cantrell’s administration is urging a slower approach.

Chief Administrative Officer Gilbert Montaño on Monday resisted calls from the council to hold mid-year budget hearings on the funds and urged that the vast majority of the money be held back, with the first major round of spending not coming until next year. And even then, Montaño urged council members to take the long view and parcel out spending through 2025, when some projections say New Orleans will finally emerge from its pandemic-induced deficits.

At the time, Montaño and Cantrell were resisting calls to spend the federal relief money on housing and other support for service industry workers facing evictions. In other words they were being asked to use the funds to help poor people affected by the pandemic; the purpose they were actually intended for.  Instead, Montaño wanted to squirrel as much of it away to address his 5 year "projected" deficits.  

But, here we are. Not even 5 years down the road and the deficits seem to be over.  Maybe it's finally time to make good on the original promise of the American Rescue Plan? 

Or maybe not. As these counter-programmers to today's hearing pointed out, we're mostly spending it on cop stuff.

At a press conference outside City Hall before the mayor's budget presentation, advocates with the Big Easy Budget Coalition issued their demands once again.

"The American Rescue Plan dollars really offered New Orleans a once-in-a-lifetime opportunity to move in a different direction and recover from the pandemic and recover from years of inequity," said Sarah Omojola, director of Vera Louisiana, a local initiative of the Vera Institute of Justice. "Instead the ARPA dollars— the American Rescue Plan dollars— were used to plug budget holes and invest in policing."

Cop Season

 Keeping with the wildlife theme, when is it not cop season in the Quarter?  

If the Audubon Society were to produce a field guide to Louisiana law enforcement, it would likely point to the Quarter and vicinity as a prime spot for sightings, a kind of Avery Island of cops. In addition to NOPD officers on foot, on bicycles, on horseback, on Harleys, and in sedans and SUVs, alert visitors can spot khaki-clad deputies from the Orleans Parish Sheriff’s Office, members of the Louisiana State Police in their distinctive hats, and representatives of the Federal Protective Service patrolling buildings like the U.S. Custom House on Canal Street. The Orleans Levee District Police and the Harbor Police are often out and about in one of the city’s few above-sea-level districts, and the retro all-caps italic insignia of the City’s Grounds Patrol isn’t an unfamiliar sight. A particularly eagle-eyed observer might see the occasional state fire marshal or deputy court constable—perhaps a bit more scarce after one such official was suspended for allegedly failing to respond to an eyewitness report of an ongoing rape, in a case that made national news—along with private security guards in a variety of uniforms. If there’s a French Quarter problem that can be solved by the application of police, it’s hard to believe it hasn’t already been thoroughly addressed.

That's a new Antigravity article about, not just the unchecked advance of over-policing and surveillance, but specifically about the shamelessness of the local media establishment in whipping up support for this program.  Relentless sensationalist fearmongering over crime by the local press all summer in concert with a lobbying campaign put on by the so-called "NOLA Coalition" of pretty much every business tyrant, real estate vampire, tourism boss and non-profit grifter in town has already generated a political response.

Juiced by an astroturfed stunt ostensibly aimed at recalling the mayor, the combined pressure of the oligarchs aligned in formation has caused the City Council to overturn a partial ban on surveillance technology.  This week the council will follow up on this by spending $700,000 for new cameras and license plate readers in the French Quarter which is already more blanketed by such devices than any other neighborhood in the city.  The crime panic lobby also appears to have spurred the mayor into a desperate proposal to just throw $80 million directly at a police department with no structural purpose besides "retention bonuses."

The pay package – which includes $30,000 bonuses for recruits who make a starting salary of $42,411– represents a massive injection of funding over the next three years into a force with a $215 million annual budget that already dwarfs other city agencies. And while it would be largely covered by federal pandemic relief funds, the package could run smack into competing priorities at the City Council, which must approve the plan. Some council members who have pushed for actions such as adding civilians to the force are skeptical that throwing money at cops will be enough to keep them on the job.

Cantrell is proposing that the city spend its American Rescue Plan allocation, money intended for cities to use in protecting its most vulnerable residents from the ongoing ravages of the pandemic, on perks and cash giveaways to the police instead.  The mayor's plan offers free health care, not to the poor and working class of New Orleans hit hardest by the pandemic, but to the police. The mayor's plan offers student loan relief, not to New Orleanians struggling with debts and rising costs of living in an economy on the verge of recession, but to the police. The mayor's plan offers rental assistance, not to New Orleanians facing evictions and being priced out of the city by tourism and real estate speculation, but to the police.  It's the most obscene and insulting thing imaginable to divert funds intended to help people victimized and immiserated by the pandemic to the police whose very function is to surveil, arrest, and suppress those same victims as deteriorating conditions drive them into further marginalization.  And yet, in this article, Cantrell says she believes this monstrous act to be the "best use" of the one-time COVID relief money.

Just as shocking here we have  this from Cantrell's CAO Gilbert Montano.

Under the city’s plan, all of the proposed $80 million package save $5 million would be covered by American Rescue Plan Act funds, according to Montaño. The federal stimulus act has sent $388 million to the city treasury, although most of that has already been committed to making up for lost tax revenue and other priorities.

“We’re once again looking at this as an investment. Without a safe habitable city, what good is a strong fund balance?" said Montaño.

Recall that this was the very same question displaced New Orleans workers, residents facing eviction, and citizens suffering diminished city services asked of Montaño last year. What good is a strong fund balance when people are left hungry and homeless and precarious by a global disaster? But he refused to budge for any of them opting instead to hold the relief money in reserve to cover imaginary budget deficits his spreadsheets projected five years into the future. 

Chief Administrative Officer Gilbert Montaño on Monday resisted calls from the council to hold mid-year budget hearings on the funds and urged that the vast majority of the money be held back, with the first major round of spending not coming until next year. And even then, Montaño urged council members to take the long view and parcel out spending through 2025, when some projections say New Orleans will finally emerge from its pandemic-induced deficits.

And now here we are a year later, a year poorer, a year more desperate, and we're watching Gilbert Montaño and LaToya Cantrell hand the federal lifeline intended to relieve the poor and desperate over to the police instead.  Ordinarily, you'd think a city council might be eager to step in and oppose such a blatantly evil policy proposal offered up by a politically damaged administration. But they won't.  Which should tell you, among other things, that the organized campaign to subject the mayor to these political pressures is having its intended effect.

Teachers aren't going to break the budget

There's a certain logic to what the so-called "fiscal hawks" are arguing. We do not want to repeat the Jindal era cycle of de-funding critical public services through tax breaks for rich people and shell games like school vouchers and medicare privatization while covering up for it by dropping "one time money" into places that will eventually need recurring revenue to avoid more drastic cuts. Even now, while the state is flush with federal COVID relief, we're still just a few years away from the next "fiscal cliff" as temporary sales taxes start to roll off the books.  

None of this should mean that teachers have to suffer for it, however. But for some reason, they're still the first thing that comes to mind when lawmakers want to talk about being cautious with the budget. 

Geymann’s amendment to House Bill 1, the state’s operating budget, is written in an English that can only be described as “technical.” It basically blocks using extra money expected to be “recognized” by the REC on Monday to add another $500 to proposed pay raises for educators or any other expenses that will become part of the annual operating budget and have to be paid in the future. Geymann said the additional funds needed to increase teacher pay raises from $1,500 to $2,000 can and should be found in the recurring revenue stream.

It's ok to give the teachers their raise and find the money in the budget later.  Nobody ever said corporate tax exemptions need to keep happening, for example.  Although the legislators don't seem as worried about those.

Will we ever Make It Right?

We have to say it's a remarkable trip the City of New Orleans has been on with short term rentals for the better part of the last decade only to end up right back where we started. We've been through years and years of hearings, hotly debated regulations that don't work, hotly debated revisions to those regulations that continue to not work, at one point we even decided to go the whole nine and turn enforcement responsibility over to an industry profiteer.  A whole lot of things have happened. But also nothing has changed.  This article says it's "inexplicable" but is it?  

With New Orleans' spring tourism season in full swing, the Cantrell administration’s stated plan to crack down on illegal short-term rentals is inexplicably stalled, leaving scofflaw operators to freely list unpermitted rentals on Airbnb and other online booking platforms.

Pinning down just how many unpermitted rentals are available is nigh impossible, but data provided by the technology firm Granicus, combined with City Hall's short-term rental registry, suggests they outnumber legitimate ones at least 3 to 1.

There's probably a very simple explanation, actually. Helena Moreno seems pretty close to getting it right here. 

Council member Helena Moreno said she is baffled by the administration’s flagging enforcement efforts. 

 “With the lack of enforcement and slow-walking of accountability measures, it makes me wonder whether this is purposeful,” Moreno said.

It's hard not to think that. Otherwise, it would be difficult to explain why the city would be leaving so much money on the table. As Moreno also points out, the city has somehow never managed to give anyone a straight answer as to how much money it actually collects in fees and fines under the current STR enforcement regime. Strange behavior for an administration that has been otherwise diligent in chasing down drivers ticketed by its robots or shutting down any street parade or music venue not able to pay the premium fees. We know the city wants to collect its money.  It's just particular about who actually has to pay. 

Now I'm not honestly recommending that any normal person with actual things to do tries this, but, for those who really must, you can view last Wednesday's meeting of the city revenue estimating conference here.  Watching these meetings one gets a (rather grim) feel for what this administration's ideas are about the city's economy and who it is supposed to serve. For example, during a discussion on employment numbers, Gilbert Montano briefly references the "Great Resignation" to signal his sympathy with the "people don't want to work" myth popular among bosses these days. (Actually the labor participation rate is nearly back to pre-pandemic status now. But that isn't going to stop the ownership class from demanding we continue to shred what's left of the social safety net just in case any workers out there feel even the slightest hope.) At the REC, the Cantrell administration generally sound like they are the corporate board of a big hotel. Almost all of the metrics highlighted in their presentation are based on how well the tourism business is going; how many visitors fly in and out, how many hotel rooms are occupied, etc.  The first time I saw LaToya Cantrell speak publicly about short term rentals her comments were already very much shaped by a hospitality management mindset. Even while she assented to the point that they may be raising housing costs, she basically looked past that to assert that New Orleans is a "destination city" and that STRs are a source of revenue.

But Cantrell is "the mayor right now" and somehow all that revenue isn't finding its way into city coffers. Property values are up, rents are way way way up,  but according to city projections, property tax revenue is down slightly.  At the meeting, much of the discussion about that centered on assessor Erroll Williams. In September, Williams granted across the board breaks to property owners following Hurricane Ida.  The fact that Williams's office has apparently granted some invalid corporate exemptions was also mentioned. 

Near the end of 2020, three local government agencies denied tax breaks for planned improvements to the Folgers coffee plants in New Orleans East. But only now, more than a year later, has the assessor put the properties onto the tax rolls, making the company liable for $5.1 million in real estate levies.

Assessor Erroll Williams blames the Louisiana Department of Economic Development for the delay. That agency blames Williams.

That T-P story details circular arguments from the assessor and from LED about who is supposed to inform whom about ITEP denials. But, I dunno, I think one thing an assessor might do in a case like this  is call somebody and ask?

Williams said his office was following its standard practice: Don't put properties on the rolls while their applications for tax breaks are still pending. He said his office asked the state about Folgers in February because the state database did not yet show the tax breaks were denied and he had received no formal paperwork from any agency saying a decision on the breaks had been made.

"This office hasn’t gotten a letter from the School Board, city of New Orleans or the Sheriff’s Office that they’ve decided to vote the contract down, so I can’t put a taxpayer on the rolls based on what I read in the newspaper," Williams said.

The status was not changed to “denied” until March, at which point Williams said his staff began working to put the properties on the tax rolls.

The state agency said it “does not notify local taxing authorities about the actions of local government entities involved in the ITEP application review process. Questions about when and how the exemption is applied at the local level are best directed to each local taxing authority.”

Hard to believe these people can't all get together and talk one way or another. This just isn't that big a town.  Especially now that nobody actually lives here. Who can afford to, anyway?

Anyway, not to give the REC any more work to do but it turns out there are other places to dig for lost property tax money if they're feeling hard up. 

In total, Make It Right owes $14,972.81 in back taxes and fines, which are added to a property’s tax bill once they become delinquent. Most of that debt was accumulated in 2021, when the foundation failed to pay taxes on any one of its properties. And It’s possible that number will grow even higher for unpaid 2022 taxes, which are due today, March 31. 

According to the city’s online tax records database, the foundation owes $9,493 in 2022 property taxes. But The Lens was unable to confirm that the foundation has not paid that down. It appears that the city’s digital property tax records haven’t been updated to show whether property owners have yet paid their 2022 taxes. Officials did not respond to questions about the group’s 2022 property taxes.

Or maybe this is another thing where they've got to wait on Erroll to update the spreadsheet. 

One last point about the REC. Montano et al are still being extremely cautious with their use of the American Rescue Plan dollars by projecting it out over the course of a five year hypothetical revenue gap instead of applying it toward the addressing the city's numerous critical human services and infrastructure needs. (Notice how they are not shy about throwing that money at police as fast as they can, however.)  Back in August, we wrote more about how this administration's ideological conservatism informs its approach to budgeting.   On Wednesday, the projections we saw did not account for the next tranche of ARP dollars promised to cities because there was still talk in Washington about clawing those funds back in the next spending authorization.  As of this writing, though, it looks like that money is still coming.

Under the emerging deal, Mr. Romney, said, most of the $10 billion would be repurposed from the $1.9 trillion pandemic law Democrats muscled through without Republican support last March. But direct funds for state and local governments would likely not be touched, after Democrats balked at this money being clawed back. Mr. Romney said negotiators had discussed taking back some funding from a program that allowed states to give grants to local businesses.

That's pretty good news. But it could be better.  The way it looks right now the primary benefit of the federal bailout is it allows the city to keep letting wealthy property owners slide on their responsibility at the current rate. Without it, they'd still do that, of course. But they'd have to crack down even harder on the poor than they currently do to make up the difference.

Holy hell it is already June

It's been quiet on the Yellow Blog for a few weeks and, I guess, for much of the year. I've been kind of slacking, I realize that. That's not to say I've been off in space or anything. The main point of this blog is basically note taking for stuff that goes on in the news or just things I read and hear in general. Trust me there are plenty of notes. The "drafts" folder here is quite prolific. I just haven't taken the time to sit down and organize them in a while.   That's not a great thing because if I don't process at least a little bit, it starts to feel like I might forget it all. Which.. again.. the main point of this blog is so I don't forget about things that happen. 

And there's a ton of stuff going on right now that I don't want to lose track of.  The legislature is wrapping up today.  I managed to get some of that down a few weeks ago, but things have not improved since.  Most notably, despite being in possession of an historic budget surplus flush with federal money to throw at whatever they like, lawmakers decided to fund a roads and infrastructure program by forcing more cuts to higher ed and health care. 

Today, we learned that they have decided to scrap two years of work toward a plan for automating expungements of criminal records because the State Police said it might cost too much. 

Davis said State Police still weren’t able to afford the proposal. He told legislators last month that  if James’ bill passed his agency might be forced to reduce the size of its next police academy class — a priority for several lawmakers — or cancel the purchase of new police vehicles. 

But lawmakers could have absorbed the entire cost in next year’s budget. The Legislature’s budget plan includes $17 million in unallocated funding that can still be spent. The Supreme Court is also sitting on millions of dollars of reserves that could be used for this purpose if it wanted to do so.

Anyway, there's more, of course. But that's not the only thing.  A bunch of stuff has been going on. Another building is collapsing downtown while we are still figuring out what to do about the last one.   A big municipal election is coming and some of your all time favs are back in the mix. It's hurricane season again and the turbines are.. not ready.  It's June now but the first of July is coming and that is going to be the worst first of the month yet for people facing eviction. 

Also other things! I have to make time to get this stuff in context before it all becomes a big blur and our consciousnesses disintegrate into the wind.  I'm trying.  

Meanwhile, holy hell it is already June. The myrtles are already in bloom and it hardly even feels like we're in 2021 yet.

Is it possible to do less with more?

Now that the "Rescue Plan" bill has passed, it's time to pick around in it and see what we've won.  Of particular interest now will be keeping an eye on state and local politicians to see if they continue pushing for austerity budget cuts even though the stimulus specifically provides funds intended to prevent that from happening. This morning the LA Budget Project calls attention to one provision of the bill meant to head some of this off. 

The law also contains an important provision for states receiving the aid: for every dollar that a state government spends on net tax cuts, it will lose a dollar of federal support. As lawmakers gavel into session next month, they will have an opportunity to make long overdue investments in Louisiana’s people, families and communities instead of providing tax cuts to businesses and the wealthy. This provision provides an incentive to do just that.  Nicholas Johnson of the Center on Budget and Policy Priorities has the details: 

Cutting state taxes now would repeat a mistake many states made in the wake of the Great Recession: they cut taxes, which harmed families, undermined economic growth, and exacerbated economic inequality and racial injustice. Instead, states should address critical health and economic needs by making investments that can help build antiracist, equitable states. To help them do so, the American Rescue Plan Act includes $195 billion in fiscal aid for state governments (and more for schools and for local, tribal, and territorial governments).

They can't use the one time stimulus payments to create new "fiscal cliffs" made out of tax cuts for rich people.  Republicans in some states are already complaining, of course.  But the truth is there will plenty opportunities in the new law for them to steal whatever they want.  This line, in particular, seems like a just such an opportunity. 

(3) TRANSFER AUTHORITY.—A metropolitan city, nonentitlement unit of local government, or county receiving a payment from funds made available under this section may transfer funds to a private nonprofit organization (as that term is defined in paragraph (17) of section 401 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11360(17)), a public benefit corporation involved in the transportation of passengers or cargo, or a special-purpose unit of State or local government.

Which suggests that the city of New Orleans, still beset with serious infrastructure challenges, and which has spent the past year threatening layoffs, furloughing workers, and dropping cryptic hints about "shared sacrifice," could still move ahead with its plans to do all of those things while shoveling the federal stimulus funds out the back door to non-profits controlled by the NOLA Business Alliance or Leslie Jacobs, or even Stephen Perry with very little accountability for any of it. Especially interesting thing to watch for just ahead of an election season when people will need paying off.

You can build it back better later

The Governor's budget proposal is due out this week. It looks like they are going to plan for cuts now that they expect to undo once the stimulus comes in. 

Jay Dardenne, the commissioner of administration for Gov. John Bel Edwards, plans to kick off the negotiations on February 26 by presenting a budget proposal to the Legislature that includes spending cuts based on current revenue projections.

But the potential for more federal aid is on the horizon. President Joe Biden’s push for a $1.9 trillion stimulus package, which would be the third federal aid bill since the pandemic started, could ease the state’s losses, and put Louisiana in a stronger position for fiscal 2022, which starts July 1.

“It's anticipated that we get a federal stimulus. If that's the case, then we'll be in better shape,” said state Rep. Jerome Zeringue, R-Houma, the chairman of House Appropriations Committee. “Because the economy is in such bad shape right now, we’re hoping we'll have a similar situation to what we had last fiscal year, and we won't know that until the federal stimulus package comes in. We're anticipating it, but there's no guarantee until it comes. That's kind of what we need and are depending upon to continue to get us through this crisis.”

A month ago, the Revenue Estimating Conference deliberately chose a more conservative projection than was really necessary, not only because they didn't know the size of the stimulus, but also because they chose to lowball projected tax collections.  So there should be ample opportunity to add back later whatever cuts show up in the proposal now.

Of course, the last time this legislature had to figure out what to do with federal stimulus funds, they carved out $300 million for John Schroder to dispense on his own.  So we'll have to see what they come up with this time.

 

The state budget is not yet busted

Some quick notes on what's being reported from the Revenue Estimating Conference today. The projection they adopted expects the overall budget to shrink by about $223 million this year. BUT there are multiple caveats and what-ifs that will determine the eventual impact on services. 

The REC is itself a politically contentious process.  Its purpose is to set an initial framework for the Governor's budget proposal before the legislative session begins.  After that, lawmakers can figure out how to find more money if they want or just move everything around. But this is where they come up with the number that sets the starting point.  But that starting point isn't an absolute truth ordained from the heavens. It's something that gets argued over by the committee. The result of that isn't so much as an agreement on the most reasonable forecast as much as it is an agreement to stop arguing.

The four-member Revenue Estimating Conference, made up of (JBE's Commissioner of Administration Jay) Dardenne, (Senate President Page) Cortez, independent economist Stephen Barnes, and House Speaker Clay Schexnayder, picked the less rosy of the two available forecasts.

Manfred Dix, an economist for the governor’s administration, forecasted a drop of only $35 million in the state general fund for the upcoming fiscal year, citing what he sees as a quicker recovery as vaccinations ramp up.

Dardenne initially moved to recognize Dix’s forecast, saying the panel would meet again in two months to revise its forecast. President-elect Joe Biden’s administration is also expected to push for aid to state and local governments now that he has Democratic control in Congress.

The panel’s independent economist, Barnes, sided with Dardenne, but Cortez and Schexnayder refused, with Cortez saying the panel should proceed cautiously with so many unknowns. Instead, all four agreed to the more conservative estimate, with Dardenne saying he wanted to avoid going without a revenue forecast, something that had thrown the budget process into chaos amid previous disagreements.

So the REC number is important. But remember not to take it too seriously. Predicting the future is, after all, always more of an art than a science. For example, it says here that state sales tax revenues during the pandemic weren't quite as bad most people expected.  Also there's a fair amount federal money already allocated for Louisiana that hasn't been factored in yet simply because the rules for spending it haven't been established. 

However, the $292 million in higher-than-expected tax collections this year could be used to help cover some of next year’s expenses. In addition, Louisiana is receiving new federal aid passed by Congress in December, some of which could help offset state budget cuts next year. Louisiana and other states still are awaiting federal guidance on what strings exist on the latest assistance.

And, of course, no one expects that to be the end of the federal aid. We could end up being disappointed about the eventual size of it. But right now there are reasons to be optimistic that the next stimulus package could include real fiscal help for the states. Even Cortez thinks so. 

Once President-elect Joe Biden takes office, Congress could also put even more federal funding relief on the table — and that could also affect how large any state budget cuts would need to be.

“We fully expect to get more stimulus dollars,” said Senate President Page Cortez, R-Lafayette, a member of the Revenue Estimating Conference.

Cortez said he does worry any money coming from the federal government after Biden becomes president might not arrive in time to help prop up the state budget. Congress still has to negotiate the new package and the legislature often finishes Louisiana’s budget in June, right before it takes effect in July.

It's hard to know whether or not Page is joking there.  If the last few years have taught us anything it is that this legislature is not worried in the least bit about fiscal deadlines. 

The upshot is the pandemic fiscal doom is not yet upon us. Which is an important thing to remember when Republicans start talking about belt tightening during the session this year.  They are still in charge of deciding whether or not you have to suffer in order to protect the petro-bosses who fund pretty much all of them.  There are better choices, though. 

Oh also be sure and check out this FB event hosted by the LA Budget Project. Looks like they will be talking about a lot of this stuff.

Austerity isn't just an accident of nature

It is city budget season.  Happy Holidays. There will be quite a few of those in the future for these folks.  Unpaid, of course. 

Chief Administrative Officer Gilbert Montaño told City Council members in a special meeting Monday that under the budget plan set out by Mayor LaToya Cantrell and her administration, furloughs that took effect this month for employees should continue through next year. 

Employees would be furloughed for one day per pay period, or 26 furlough days over the course of the year, Montaño said. People who earn less than $30,000 a year would be excluded from the pay cut. 

The city's public safety departments, such as police and fire, will also take a 6% and 8% cut to their overall budgets, while other departments could see up to a 40% cut, he said.

Wow. Especially sucks to be the "other departments".  

The hardest hit departments include Public Works, which will see its funding drop more than 40% to $34 million. That decrease includes cutting about 10% of its total positions.

The City Planning Commission, which is responsible for reviewing development proposals, is also slated for a 40% cut, will lose 6 of its 26 positions. The Vieux Carre Commission, the small agency that enforces the historic preservation rules in the French Quarter, is facing the deepest cut in the city at 42%, will lose two of its six spots.

To explain itself, the administration cites the obvious.  A compounding crisis of pandemic-induced depression has caused a sudden drop in expected revenues.  The federal government has failed to respond adequately and what aid it has made available has been watered down and diverted at the state level.  

All of this is, regrettably, true. But it's important to also keep in mind that many of the consequences of that disaster are still left to our local lords to decide. There are individuals in charge right now who impose their values on the question of who suffers the most during the disaster.   The above mentioned cuts in this budget are one example. The pandemic didn't decide the cut Public Works by one amount but NOPD by another.  Similarly, the pandemic didn't decide that businesses shouldn't have to pay the sales taxes they collected during Mardi Gras. Their lobbyists told the mayor that's what they wanted and she agreed to it.   The pandemic didn't decide it was time to give corporate landlords a big tax break paid for by residents and through layoffs. The assessor made that call.  

And, of course, we know the pandemic can't read the city ordinances but we are pretty sure that wasn't who decided to ignore this (admittedly toothless) city council decree that we would no longer stiff the Public Defender's office.  A person did that. On purpose.

The new math

Remarkable that the more power we give the ostensible "fiscally conservative" party to operate in Louisiana, the more likely we are to working with completely made up numbers.  Republicans have been balking at the revenue estimates ever since they took over the House in 2015. This week, they fired the legislative fiscal officer because he wouldn't let them block parish lawsuits against oil and gas companies.

The ouster of Carpenter comes three weeks after state senators blasted a fiscal note that said a bill they favored could have prohibitive costs.

The public rebuke of Carpenter’s office occurred on May 19 when a fiscal note produced by staffer Rebecca Robinson reported that a bill to kill lawsuits filed by coastal parishes against oil and gas companies could result in “a significant increase in expenditures” if the state were to take over the suits. That’s because, Robinson found, the Louisiana Department of Natural Resources estimated it would cost the state at least $4.3 million to take over each of the 43 cases, or up to possibly $185 million for all of them.

Before we get too far in the way of defending the technocrats here, we should acknowledge that forecasting revenues and costing out legislation is often as much are as science. This year's budget projection, complicated several times over by the volatile price of oil among other effects of the COVID crisis is as sure an example of that as any. We try to make sophisticated guesses about these things but we are still, largely, making guesses.

So the argument here is really about power.  If you have the power to affect the guess, then you try to make the guess favor your desired policy outcome.  Republicans in the state legislature want to protect oil companies and insurers from liability. They want to protect rich people from having to pay taxes. They're a lot closer to getting that stuff done if their version of the guessing the numbers is what sets the parameters of debate.  That's really half the battle right there. Or maybe three fourths depending on who is estimating.

Actually they don't CARE about us at all

I know Gilbert Montaño is employing a kind of corporate-politcal-speak here intended to persuade upper level pricks into not being quite as prickish as they want to be.  But it still sounds naive as a public statement.

Louisiana as a whole received about $1.8 billion from the stimulus, $800 million of which is supposed to be passed on to local governments.

Montaño suggested there could be changes to that program in the future and that he didn’t think the intention was to leave out cities like New Orleans, which has a population of about 391,000.

“I don’t think the framers (of the CARES Act) thought New Orleans would fall below the threshold,” he said. “Place like New Orleans, Atlanta, I don’t think were anticipated to fall into the smaller city category.”

Actually the framers of the CARES Act (Republicans in the US Senate) mean for every state and every city to fall into crisis mode. The cascading disaster can only benefit the wealthiest Americans who Congress exists to serve in the first place.  There's no shaming them away from this purpose.  The President is already articulating their political rationale.

In an interview with the New York Post, Trump expressed reluctance to use a new stimulus bill to aid the states hardest hit by the coronavirus crisis. “I think Congress is inclined to do a lot of things but I don’t think they’re inclined to do bailouts,” he said.

He went on to say the states shouldn't get cash in part because they have Democratic leaders. “It’s not fair to the Republicans because all the states that need help — they’re run by Democrats in every case,” Trump said.

That sounds like absolute nonsense. Every state needs help regardless of who is in charge right now. It makes more sense when you understand that the Republicans in every state want to dismantle and sell off public services and infrastructure. The COVID caucus of Republican hardliners in the Louisiana legislature are already moving austerity budget measures intended to accelerate that process.

The purpose is to leverage the pandemic into a shock doctrine scenario that will force states and cities to lay off their workforce, sell off their assets, and privatize what remains of their public services by handing them over to for-profit entities. It's already happening in New York.

NEWS: Former Google CEO Eric Schmidt will chair a commission that re-imagines how New York operates, @NYGovCuomo announced.

Schmidt says he will focus on Telehealth, remote learning and expanding broadband access. pic.twitter.com/NM7Pw7fMrZ

— Jimmy Vielkind (@JimmyVielkind) May 6, 2020

And, unless something is done, it's likely to happen in New Orleans as well, under Montaño's direction.  

One possibility that’s being considered to increase those savings is offering incentives to city workers for retiring early, he said. The details of that plan are still being worked out and would depend in part on how much the city would need to pay out for unused time-off, he said.

The city could also save between $10 million and $12 million this year from reduced overtime costs from public safety workers, largely due to the cancellation of festivals and other major events, Montaño said.

The bosses won the pandemic.  They've got hardline Republicans in Washington and Baton Rouge to smash what remains of your dwindling public services and infrastructure. And they'll have neo-liberal Democrats in your cities to "partner" with the private profiteers who will scavenge and hoard the broken pieces. Despite Montaño's attempt to appeal to a better nature, this is what the "framers of the CARES Act" intended.  A few weeks ago, the mayor described the situation at a press conference. The CARES Act, she said, "doesn’t make me feel like we’re cared about if that’s all that’s going to come down from the federal government to the city of New Orleans.”  I think that's probably the most accurate take on all of this.

The COVID Caucus

What are they even doing there?

While the work went on at the speaker’s podium, the 78 legislators in attendance – many of whom were not wearing masks as prescribed by leadership – milled around the chamber chatting and joking with one another. Often groups of lawmakers gathered in clusters so large that House Speaker Clay Schexnayder, R-Gonzalez, dispatched a sergeant-at-arms to break them up.

I mean, I know there is work to do but at least we could expect everyone to take it seriously given the circumstances.  But if they aren't even going to take the public health threat (or even the health of their colleagues) seriously, what do we think they're going to do about the effects of a crashing economy? 

The crashing price of oil, which was trading in the $20 a barrel range Monday, will likely have the biggest effect on the state’s revenues, Albrecht said. Currently, the state’s revenues are based on a roughly $60 barrel of oil, and for each $1 drop in the price over a year, Louisiana’s revenues drop by around $12 million.

Complicating the picture is Louisiana’s economy wasn’t roaring to begin with, Albrecht said, which made the state particularly vulnerable to such a dramatic shock. Manfred Dix, the economist for Edwards’ administration, said the state was facing a “double-whammy” of oil prices and business closures from the pandemic.

“It’s not easy when from one day to the next you basically tell the economy to shut down and close doors,” Dix said.

Which, again, is why we have to be extra diligent in making sure people are taken care of during the hard times.  A lot of what they're able to do in that regard begins with what the federal government allows. But in the meantime the state lawmakers need to be thinking about ways to keep critical state services available, keep people paid, that sort of thing.

Are they taking that task seriously? Of course not. They're just there to give tax breaks to oil companies. Everybody knows that's their real job anyway.

Failed states

Every state and municipal government is teetering on the brink of fiscal calamity right now. This is, to say the least, not an ideal circumstance to face in the midst of a public health crisis. It's also a direct result of the health crisis, of course, and should be treated as such. So far, unfortunately,  the response to this symptom is no better than any other aspect of the disastrous federal response to COVID 19.

The Republican initiated CARES Act passed in Congress last week provides massive unaccountable bailouts to large banks and corporations. It presents small businesses with a morass of SBA technicalities to tangle with. And it gives workers little more than pocket change.  There is money in there designated for the states as well. But it's already obvious that will hardly be enough to meet the costs they'll incur fighting the disease and doesn't even begin to address the crippling budget shortfalls to follow.

This much is clear already. And that's before most states even understand the strings attached to the funds they've been granted. Louisiana will receive $1.8 billion from the CARES Act. But legislators aren't yet sure how they'll be allowed to spend it.

What Louisiana budget drafters are trying to figure out is if the money coming from Washington, D.C., could displace some of the dollars the state already had slotted, thereby freeing money to use elsewhere in the state budget.

The general understanding is that federal money can be used to pay COVID-19 expenses — and not to replace state revenue losses.

Now that the legislative session has already been postponed, there's even less time to sort this out.   Louisiana faces so much uncertainty because its budget depends heavily on oil and gas production and on sales taxes. With suddenly oil down at pre-2003 prices tourism at a standstill, and consumer activity limited to bare necessity shopping, the whole of state govenrment looks like it's about to crash. 

But the one thing lawmakers should not do is panic. They may be faced with a crisis within a crisis, but they should know also so is every state. A global pandemic is threatening to cost the US hundreds of thousands of lives, potentially.  50 failed states cannot cope with the ramifications of that. And so the states cannot be allowed to fail. Louisiana legislators should assume they won't be. If the uncertainty persists over the summer, they can pass a standstill budget and muddle though to next year.

Either way Congress will have to act again. We don't know when that will be but when they do there are already plans for what that action can look like.  And shoring up state and municipal budgets will have to be a top priority.

The day the rent stood still

Well here we are at the first turn of a new month in the Time Of The Covid. Rent is due. How many are able to pay?  Even after three emergency acts of Congress and a few local declarations meant to protect renters, the answer is probably not as many as you may think. The emergency net we've thrown up has many holes.

The recently passed federal stimulus "CARES" act includes a ban on evictions and late fees that extends only until the end of July. After that, there's nothing to stop anyone being told to pay back rent or else. On top of that, the federal ban only applies to properties receiving federally backed mortgages or government subsidies.  If your landlord owns the building outright, you are on your own.  For the time being, renters in New Orleans are protected by a temporary postponement of eviction hearings in the City Courts until April 24.  The Governor has also suspended evictions statewide until April 13. Both of those dates will likely be extended but probably not for very long.

In the meantime, a lot of people are still being evicted through extra-legal means. Landlords are either sending out threatening notices or just physically locking tenants out of buildings.  If this is happening to you, by the way, you may try contacting Southeast Louisiana Legal Services, the Louisiana Fair Housing Action Center, or the City Office of Community Development. Beyond that, though, homeowners and renters facing foreclosure or eviction have only inadequate protections which may or may not be extended on a month to month basis.

The only way to provide a more reliable form of relief is for Congress to step back in with a "Phase IV" stimulus bill. The previous efforts have done nothing to provide Americans with the certainty they will need to make it through the 12-18 months before we expect a COVID vaccine could be available. Only the federal government can do this. That's where the big money gun is. We just haven't fired it in the right direction yet.

As long as no one is sure when they'll be able to work, people are going to need an income. The plan to get it to them already exists. We just need to make it happen.

Rep. Rashida Tlaib (D-Mich.), for example, proposed giving everyone $2,000 on prepaid debit cards, then $1,000 per month until a year after the public health emergency subsides. Recurring payments had been a Democratic priority the party was unable to achieve in the bill that passed last week.

Unfortunately the designs for this and other necessary expanded safety net spending have become mired in the latest iteration of the perpetually doomed "Infrastructure Week" package. We don't have time to wait, though.

Right now state and local governments are expected to expand services and maintain staffing levels while tax revenues plummet. they're going to need emergency funding.  Louisiana will get $1.8 billion from the CARES Act. We're all but certain that won't be enough.  The City of New Orleans expects to find itself with a $100 million budget deficit by the end of the year. Of the state's $1.8 billion, how much will be available to address the city's needs?  Right now it isn't clear if the city is guaranteed any of it.

The centerpiece of the state aid is the $150 billion Coronavirus Relief Fund, which state, tribal, and local governments can use this year to meet costs connected to the virus. Each state will receive at least $1.25 billion — though the District of Columbia will only receive about $500 million — while the most populous states (California and Texas) will receive over $10 billion each, we estimate.  In most states, a portion of the funding will go to local governments serving populations over 500,000. Tribal governments will receive $8 billion.

New Orleans's current population is probably not even 400,000 (fill out your Census form, by the way) so it's very likely we're all at the mercy of the state government. Whenever the legislature manages to reconvene, we'll talk about that then.

But hey do you know who does have $100 million just sitting around right now?  That's right. It's our friends at the Convention Center. The times being what they are right now, though, you can't just have a stash like that doing nothing without somebody taking notice.

A coalition of 21 local unions, advocacy organizations and other groups are calling on the Ernest N. Morial New Orleans Convention Center to release $100 million out of its unrestricted cash reserves to support hospitality industry workers who are out of work due to the coronavirus crisis.

The Convention Center has recently reported somewhere between $185 million and $215 million in unrestricted reserves, which it has accumulated through the collection of locally generated hotel, food and beverage taxes. In 2018 and 2019, those collections exceeded $65 million.

Convention Center officials did not respond to requests for comment for this story, including questions about the current value of its reserves.

Ha ha I'm sure they didn't.  Hell they just spent all of last year fighting with (well, okay more like doing a Kabuki play with) the mayor over whether or not this particular pile of money ought to be paying for city infrastructure repairs. Thanks to Walt Leger's work in the legislature, they got to hang onto it after all.  Guess what Walt Leger does now.

Accompanying the report on the rapid deterioration in the Convention Center's business outlook, on Tuesday board president Melvin Rodrigue said he would be stepping down from the position he has held since 2008.

Rodrigue, president and chief executive of Galatoire's, was recently elected as chair of the National Restaurant Association, a powerful lobbying group that has been pushing for relief measures for its hard-hit members. He has been in talks with the governor since late last year about a successor, he said Tuesday.

He will be replaced by Walt Leger III, a former state representative and the current general counsel for New Orleans & Co.

So is Walt going to turn around now and just give away all the money he earned his current job working so hard to secure?  Doesn't seem like it. But if service workers are still out of work, and rent keeps coming due month after month, and if no one in D.C. has fired off the money gun, then relief has to come from somewhere.  And seeing as how that $100 - $200 million was gathered off the backs of the very workers asking for it now, well, it looks like they've probably got dibs.

Busted

The legislature isn't working right now.  That's probably a good thing. I mean, it's usually a good thing when that bunch doesn't have to get together but in this case it's especially so because they would all be freaking out over the budget.

Economists assumed oil prices would average $59 a barrel when compiling the state’s revenue forecast, but state leaders are expected to meet early next month to adopt a new revenue forecast that will determine how much money lawmakers and Gov. John Bel Edwards have to spend. The price of oil has dropped by nearly half ahead of that meeting, trading in the low $30s a barrel in recent days.

For every $1 drop in the price of oil, Albrecht said, Louisiana loses about $11 million to $12 million in direct tax revenues.

Now that doesn't necessarily mean they  will have lost $330 million just like that.  For one thing the revenue estimate is based on the expected price of oil over the course of the entire year. So if the price rebounds later, it could average out to be a negligible difference. 

Of course, that story was from a week ago.  Today we have another look and...

The American oil benchmark West Texas Intermediate dropped 24 percent to just over $21 a barrel, the lowest price since 2003. 

The global Brent benchmark fell to just above $25 a barrel, a level just below January 2016. Oil prices are more than 60 percent below where they were at the beginning of the year.

Aaanyway... just tell the legislators to sit tight for now.  Coming back in to work too soon could be even more dangerous than it already is.

Just disband the REC

If state revenues are whatever we say they are, then why even go through the pretense of pretending to have an "expert" driven estimate?

Schexnayder said after the vote that he felt his proposal was a compromise and would have given the governor and Legislature a “starting point.” Last year, the REC adopted a forecast in the spring, during the legislative session, that gave the state more money, and Schexnayder said he figured the REC could do that again this year if it adopted his proposal.

None of these numbers are real. The process is just about setting the limits of what we will argue about. Of course this has always been the case. But now that we're admitting the technical elements are a waste of time, maybe we can streamline things a bit.

Nobody wants to be D.A. apparently

Is Leon just grandstanding and fearmongering to hear himself talk?

Orleans Parish prosecutors lost almost as many trials as they won last year, a steep drop in convictions from just two years ago, when prosecutors secured guilty verdicts in three out of four of the 60 cases that produced a verdict.

In response, and amid an exodus of mid-level prosecutors, Cannizzaro has asked senior litigators once assigned solely to major felonies to train recent law school graduates.

“Our crime-weary citizens rightly expect the prosecutors of our office to be determined, competitive and proficient in the courtroom,” Cannizzaro said in a recent interview. “We have recognized where our trial numbers have deviated from the usual standards, and that is why we implemented in December a temporary reorganization plan.”

In a better world we might think a declining conviction rate is a good thing since it means, at the very least, that the District Attorney has slightly less leverage to go around bullying people than he currently does.   It also would mean we wouldn't have to allocate so much money to Leon's office which, as we can see, is what he's really pushing for here.

The DA blames the city.

He says that a $600,000 annual budget cut — roughly 5% of his overall budget — imposed by the City Council in 2017 and 2018 prompted lawyers to leave. The funding was restored in 2019, and in the 2020 budget his office has received a $500,000 increase.

But as long as Leon is free to assume that people really are "crime weary" (and the media does nothing to discourage them from feeling that way, he'll continue to push for more money to spend on putting more people in jail.

One would also assume that he's in the news making all this noise because he's gearing up to run for reelection but... there are these "rumors."

Some courthouse observers speculate that prosecutors are leaving because of the uncertainty ahead of this fall’s district attorney election. Cannizzaro hasn’t said whether he’s running, and the one contender who has announced, City Councilman Jason Williams, promises to be a formidable candidate.

“The rumors change from day to day” as to whether Cannizzaro will run, said Gregg Carter, a criminal defense attorney.

Yeah, well, there were similar rumors the last time he was up for reelection too.  Also there are similar rumblings that maybe Williams is thinking about backing out of the race himself. 

If so, it's odd to find him running around downtown with a bullhorn and getting on TV and stuff.  Is there a trick to running for D.A. that involves really seeming like you don't want to run for D.A.?