APPEL: In The New Year, Louisiana Needs A Better Deal For Our Tax Dollars

It’s a new year! As we approach the halfway mark of our governor’s term we are still waiting to hear a vision of his plan for where he believes Louisiana should be heading. We all know that we are last in virtually every measure of success that states are measured by; that’s sad but it is a great starting point for the future. After all from the bottom, if we want to improve, everything is up.

In his first weeks the governor made a decision to accept Medicaid expansion. I believe that he did so because he sincerely believes that there are undefined forces beyond the control of the people that prevent them from prospering. This philosophy goes on to maintain that government substitute itself for self-reliance by being some kind of universal support system.

I give him credit for his desire to improve healthcare in our state, but since he chose not to work with legislature, I doubt that his approach will work. Simply put, people will be people and while spending massive amounts of money may create some incremental improvements it cannot overcome old habits.

Further, beyond accepting the validity of his acceptance of socialized healthcare, the governor missed an incredible opportunity to get a good deal for Louisiana. When he unilaterally accepted Obamacare it was at the very end of President Obama’s term and the President was desperate to build upon his legacy. The President would have granted us incredibly favorable terms to accept his signature program, especially in that we are a Deep Red state. Many other states had already negotiated acceptable Medicaid expansion contracts with the Federal government, primarily based upon granting them freedom to design their own state-based systems that better fit the needs of their people. Unfortunately it seems that our governor made no attempt to do so and now we have an enormous program that will soon be, if it is not already, too expensive to afford.

But that’s water under the bridge. What does he have in mind to get our state out of last place in everything else? Surely not only silence. Let me help here a bit. We are one of the few states in the South blessed with incredibly valuable assets; energy, minerals, agriculture, ports, railways, waterways, primary manufacturing, available land, climate, and so on. Most states would relish just 1/10th of the assets that we have.

So what does he have in mind as goals for infrastructure, education, creating a growing economy, crime reduction, breaking the cycle of poverty? I know that the stock answer of his Party has been “share the wealth,” and I also know that he continues to blame Governor Jindal for not being able to move our state forward, but surely by now he must have some thoughts as to where he wants to lead us?

OK, ok, so let me try to propose some of my ideas. To my way of thinking there is but one underlying principle that defines what our political strategy must be. In order to allow our people to enjoy the prosperity that is common in so many of our sister states, we must literally recreate Louisiana.

I mean re-create it completely.

We have suffered under the same philosophy of government for far too long and it has brought us nothing but poverty and failure. It is pure folly to think that somehow we will end up achieving better results by, as the governor seems fixated upon, just making state revenues more “predictable,” without correspondingly tearing the old way of doing things out by the roots. After all, “predictable” in our political world is but a euphemism for “ever-growing.” So when he speaks of predictable revenue streams he means ever-growing revenues to feed the same old failed ways.

So here is my personal vision of how to recreate Louisiana. These ideas are not in any particular order. All of them are long term goals, not in any way a quick fix. We have taken decades spiraling to the bottom and it will take decades to gain our rightful place. But as the old expression goes “you can’t finish, until you get started.”

First, we must truly educate our people, especially our youngest people. That means setting very high goals and ending the practice of accepting failure because it suits adult needs. It also means spending scarce resources in a manner that achieves our goals and not in the same ways that we have always have just because we always have or because it is politically astute to pour good money after bad. It also means serious consideration must be given to a different model of education governance. In a sense it means out with the old, in with the new.

We must redefine the role of government. All we have to do is absorb that constant drumbeat of last place rankings to know that we are a political catastrophe. We know through countless fiascoes that a government that tries to be everything to everyone is doomed to mediocrity – at best. So we must end the belief that we will improve our people’s lot by simply spending more and more with no demand for efficacy and efficiency.

Our only path to better days mandates an acceptance of the status quo must be over. By doing so we open the way to a new 21st century form of government, a form based upon a modern fundamental compendium of law, a new constitution. This new constitution must be based upon the principle that the happiness and prosperity of the people are our goals and it must use proven concepts borrowed from successful states to reach those goals. As such, we must guard against the insidious tentacles of special interests and short sighted, old school politicians who would try to guide the creation of such a fundamental law into a re-make of our failed past. We must have leadership that has vision and a fierce commitment to re-creating Louisiana, not just a rehash of shadows of the past.

Obviously funding government is critical but we have always approached it from the wrong direction. Through history we have funded state government without any concept of prioritization or long term goals. The result has been that we have always spread our resources far too thin and we have created an environment in which there is no trust that government will spend with the people’s best interests in mind. So through our new fundamental law and statute we must instill a spending process based upon priority, goals, transparency, measurable success, and accountability. It is incumbent upon the leaders of our state to create trust in themselves so that the people will truly believe that the state is moving in a defined direction and that their tax dollars are being spent to the benefit of the overarching goal of prosperity for all.

Bold leadership dictates that if we are to assume our rightful place it is absolutely fundamental that we dissuade our people of the phony notion that government is the path to prosperity. Prosperity only comes from the efforts of the people, not from government. Government’s role is to create an economic growth environment that presents the opportunity for all to succeed; it is not to offer false images of a better quality of life based upon hollow promises. History screams that only poverty is the outcome of government dependency.

Traditionally it has been the modus operandi of Louisiana’s political class to use subtle nuances of fear and jealousy to convince our people that only they, that same political class, can protect the helpless people from insidious forces beyond their control. How many times do we hear politicians say “I will fight for you” – who do we think that they are fighting? Maybe good strategy for politicians, bad for citizens! An educated population would see through this phony behavior and bury these false political prophets.

The path to prosperity starts with a secure job that leads to ever higher incomes and benefits. Those jobs do not and never have come from government. They come from the business sector. The way to get business to Louisiana so that we can create those jobs is to have an economic environment that attracts business with the secure knowledge that it can make a profit and keep it. The only role for government is to create that favorable environment, but to do so by collecting as little as possible in the form of taxes and fees as needed to fulfill priorities.

This is so important and yet so often cast as an adversarial relationship. Jobs are the path to personal prosperity. Government can be a benefit or a hindrance along that path. Our state has failed to capitalize on its assets through business growth simply because government has been a hindrance to business. It is easy to contrast the phenomenal prosperity in Texas or Florida with our own weakness. Government in those states interjects itself as little as possible and gets out of the way!

So how can government help create a favorable economic environment? As noted it starts with minimized government interference and low taxes. But it also means that we must end the scourge of the trial lawyers who, using own laws and court systems against us, personally make millions from civil litigation but at a cost to us by driving business away while driving up personal and business insurance costs.

It also means that we must limit wasteful economic development incentives by reworking our rules and goals and then using those funds for real priorities such as education. Business has a list of metrics that it uses to evaluate a location when it decides if it will move or expand. This is critical to understand – we do not measure up well in these metrics so we have been forced to use monetary incentives to attract business.

But just buying business can be as bad as not having it. Fundamentally we must address our failures but in the meantime we are forced to use incentive. All incentive must be able to fulfill a few simple rules;

  • We must have a strategic plan based upon the market and our assets and weaknesses. Only businesses that fulfill that plan should qualify
  • We must focus upon good paying jobs and not dirty, low employment business
  • A business must meet defined goals and metrics
  • A business mustn’t be in direct completion with existing state businesses
  • A business incentive must be for a clearly defined time period, not a subsidy forever
  • An incentive must result in a definable monetary return to the state Treasury over a defined time period and not result in a negative cash flow to it

As we all know only too well business votes with its feet. When it is subjected by state or local government to corruption, endless bureaucratic complexity, overzealous rules and regulation, or a whole raft of other anti-business practices it simply leaves. When business can’t make a profit it moves. When business can’t keep its profits, because politicians so that they don’t have to tax their own voters tax it heavily instead, it leaves. When business experiences any of these determinants to its success the word gets out and other business just doesn’t come. Business doesn’t get hurt for long by these counter- productive practices, the people get hurt when they can’t find good jobs. If we want prosperity we must have leadership that recognizes these truisms and refuses to allow them to interfere with the people’s best interests. I am not advocating business over the people, only the reality that there must be a balance, as demonstrated by our failure to achieve economic equivalence with our sister state, a balance that we do not currently grasp.

One of the most negatively impactful results of our current structure has been the constitutionally established relationship between state government and local government. This relationship was established during a time that is so different from today and yet it has survived until now because it has been a useful tool used by generations of politicians to maintain political power. This relationship is really easy to understand through the words stated by President Garfield many years ago -“he who controls the money of a nation controls the nation”.

But by playing the “game,” local governments have evolved to enjoy a symbiotic relationship with state government. The result is that the state sends massive amounts of funds to locals even as it limits what locals can raise in their areas. This gives local governments the ability to spend large amounts without ever having to go to their own voters to justify their accomplishments by asking for taxes. There is another byproduct, when the local government wants more to spend it doesn’t have to justify its own efficiency, it just blames state government and uses local political power to force state government to kick in more.

This process dramatically limits the availability of funds for state priorities even as it hurts local jurisdictions’ ability to set and fund their priorities. It also allows for bad local management of government services because local politicians don’t have to demonstrate their own stewardship of the money. It is a system that is good for politicians and lobbyists at both levels but bad for the people. It’s way past time for this anachronism to go and to put the state and local relationship into a balance that is built upon priority and efficiency.

And now for the 600-pound gorilla, or should I say $15 billion gorilla, in the room; there is not a person in our nation who is not aware that healthcare is always a top priority. The battle lines are loosely drawn between socialized medicine and private healthcare. Nationally Obamacare has met one Democratic goal, for all practical purposes it has destroyed the previously existing private insurance market that had been the basis of our healthcare for generations. So now, we have no choice but to either go to a fully government run system or some form of hybrid between what remains of the private market and national healthcare.

As it relates to our state, the governor’s unilateral acceptance of Obamacare has placed us in a precarious financial position. In a sense his decision has created a limitless obligation that literally absorbs all of our disposable revenue. Add to that, as nationally Obamacare is starting to unwind there are grave consequences poised to do devastating harm to our budget and the welfare of our people. As noted the governor’s poorly-crafted acceptance of Obamacare has forced him to increase taxes on our people even as our competing states eliminate their taxes to build their economies.

So with the premise that we are committed to taking care of our least able but not in a manner that wrecks our ability to pay for it, we must escape the governor’s bad decision and create a new hybrid healthcare model that is right for Louisiana. Once we agree on a redesign of an economically feasible state system we must approach the Federal government and renegotiate the Obamacare terms that he accepted. This will result in a sustainable and effective healthcare delivery system that doesn’t absorb all of our revenues, eviscerating other vital state services, far into the future.

Finally let me re-iterate that Louisiana must abandon the victim mentality and racial/class divisions that our politicians have used for so long in their quest to maintain power. Putting this simply, while this poverty of spirit has served the political class very well, it has resulted in a whole host of social ills vested upon the people of a state that is so rich in assets that economic poverty seems inconceivable. It is far past time to tear up the old contract with Louisiana’s citizens and engage the power of our people through their own resourcefulness and hard work to build a state that is a beacon of economic prosperity. Despite what our leaders have told us, the ONLY way out of poverty, crime, and all the many social ills that we share is to create a vibrant economy that builds wealth for our people.

These ideas do not represent an easy fix. They mean that we must create a vision of what Louisiana could be and abandon the concept that our people are incapable of competing with so other states. Louisiana was once one of the shining stars of the nation and we can be again. The sole problem is that through the decades, we have lost our way and our confidence.

But a re-created Louisiana can’t happen unless we have leadership that reverses those decades of government dependency and fear of the unknown. If we ever expect a better deal, we must re-create Louisiana and it must start now.

According to Shakespeare as attributed to Henry V, leadership of the nature that can bring our people from the wilderness of poverty is the equivalent of – “Once more unto the breach, dear friends, once more”. In other words we must stand together, against all odds and fearlessly push forward in order to bring victory to our people.

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