It’s a fairly large document, and it seems to be a good deal more aggressive and ambitious than Gov. Bobby Jindal has been to date.
What’s interesting, though, is the fact that yesterday the Governor didn’t particularly highlight much of it in his State of the State speech. The address, with the entire legislature in tow, was more of a rehash of his first three years as governor and a highlighting of a lot of the state’s economic development wins. But he didn’t really sell the package below, and that’s a bit puzzling. There is some quality stuff in this agenda Jindal ought to have done a better job with.
From a release the governor’s office put out this morning, here’s the package with our comments included where appropriate.
Keep Louisiana Growing
Governor Jindal’s Legislative Package: 2011 Legislative Session
*In addition to the FY 11-12 Budget, Governor Jindal is supporting the following legislative initiatives. The 2011 “Keep Louisiana Growing” Governor’s package includes initiatives to improve education and make communities safer for Louisiana families. Note: Other legislative initiatives will likely be added to this package during the session as other bills are introduced that support this agenda.
Encouraging Business Investment
SB 71 by Senator Mike Michot renews and extends the Quality Jobs program for six years.
- The Quality Jobs program is a powerful incentive for job creation, which provides up to a six percent rebate on annual payroll expenses for up to 10 years and either a four percent sales/use tax rebate on capital expenditures or an investment tax credit equal to 1.5 percent of qualifying.
- The Quality Jobs program supported 29 business location or expansion projects in 2010, which could generate over 2,400 new direct jobs and over $1 billion in capital investment in Louisiana.
It’s an OK idea, and it has benefited business. This is one of the tax breaks for business the unions and the Democrat pols are gunning for, and Jindal did a nice job of standing against them with the inclusion of this piece. But it’s really a stopgap-type measure to have a specific government rebate program in place when what would be more beneficial would be a more favorable tax rate, period. Why not cut state sales and payroll taxes in total? That would give you lower rates for everyone and a simpler tax structure which allows businesses to make smarter – and more profitable – decisions.
SB 134 by Senator Dan Claitor and HB 467 by Representative Steve Carter renew and enhance the Technology Commercialization Credit and Jobs Program.
- The Technology Commercialization Credit and Jobs Program provides a 40 percent refundable tax credit for companies that invest in the commercialization of Louisiana technology and a six percent payroll rebate for the creation of new, direct jobs.
- This bill extends the program for another six years and converts the refundable tax credits for technology commercialization expenses to rebates, in order to deliver the incentive more quickly to companies.
See above; our comments are the same.
HB 248 by Representative Cameron Henry and SB 123 by Senator Danny Martiny enhance the Digital Interactive Media Tax Credit.
- The Digital Interactive Media Tax Credit is at the center of Louisiana’s economic development strategy to attract high-wage, high-growth software development activity to the state. The incentive provides a 25 percent transferable tax credit for qualified production expenditures in Louisiana and a 35 percent transferable tax credit for Louisiana resident labor expenditures.
- This bill increases the attractiveness of the incentive by giving companies the option of taking a refundable credit or a rebate equal to 85 percent of the face value of the credit.
Once again, tax credits are better than soaking the business community, but simplicity is better than a bunch of rebate programs and special treatment.
SB 135 by Senator Dan Claitor and HB 441 by Representative Steve Carter renew and enhance the Research and Development Tax Credit.
- The Research and Development Tax Credit program provides up to a 40 percent refundable tax credit to businesses conducting research and development in Louisiana.
- This bill extends the program for another six years and converts the refundable tax credits to rebates, in order to deliver the incentive more quickly to companies.
R&D normally comes from gross profit, so you’d get more of it if your businesses could realize bigger profits. Again, this is better than high taxes but it’s not as good as simplifying and lowering the rates. One supposes that with the deficit being what it is a tax reform plan probably isn’t politically possible this year.
HB 348 by Representative Walt Leger extends and improves the residential historic rehabilitation tax credit, which allows homeowners rehabilitating historic or blighted homes to earn a state income tax credit on up to 25 percent of rehabilitation costs.
- In addition to extending the sunset of the tax credit from December 31, 2012 to January 1, 2016, the bill enacts several improvements that make the tax credit more accessible to homeowners.
- It also lowers the minimum rehabilitation costs to qualify from $20,000 to $10,000, allows any homeowner to access the 25 percent credit regardless of income level, and raises the credit for blighted homes over fifty years old to 50 percent of rehabilitation costs.
They want this in New Orleans, and the homebuilders want it as well. This one should be pretty easy to pass.
HB 349 by Representative Walt Leger renews and extends the commercial historic rehabilitation tax, which allows taxpayers rehabilitating a historic structure located in a downtown development or cultural product district to earn a state income and corporation franchise tax credit on up to 25 percent of rehabilitation costs.
- This legislation extends the sunset on the tax credit from January 1, 2012 to January 1, 2016. The commercial credit’s helps increase tourism, property value, boost downtown areas and cultural districts, and increase business activity in areas using the credit.
See above. It’s the same bill applied to commercial property.
Providing Greater Budget Flexibility
SB 144 by Senator Mike Walsworth sunsets dedicated funds, which are not constitutionally protected every four years following review by the Joint Legislative Committee on the Budget.
- The state has locked away $4.75 billion in protected funds over the years, resulting in an inflexible budget process, which places a disproportionate burden on higher education and health care. This bill sunsets dedicated funds, which are not constitutionally protected, every four years unless the Legislature enacts a law to recreate or extend a fund. Special funds related to grants, court orders, state contracts, industry associations, the judiciary, and retirement funds are exempted.
- The bill also requires that every four years, the Joint Legislative Committee on the Budget conduct a comprehensive review of all dedicated funds and makes recommendations on their continuance.
This is a smart bill. These dedicated funds were put in place to keep governors and legislators from robbing Peter to pay Paul every time there’s a deficit, but the fact is it’s our responsibility as voters to elect people who will be responsible with our money. Dedicating funds rather than making smart priorities is a cop-out, and it doesn’t work. We’ve seen that. This bill is borne out of necessity, but strategically it’s past time that our state declare priorities and eliminate the things it doesn’t need to do. Getting rid of dedicated funds which support unnecessary functions is a key step in that direction.
SB 131 by Senator Gerald Long allows the governor to reduce statutorily dedicated fund appropriations by an additional five percent during a budget deficit.
- Currently, the executive branch can only reduce statutorily dedicated and constitutionally protected fund appropriations by five percent during a deficit. This bill increases the authority to reduce statutorily dedicated fund appropriations, excluding constitutionally protected and mandated fund appropriations, by an additional five percent during a deficit. This will help mitigate cuts to higher education and healthcare in times of budget shortfalls.
More flexibility is good, but it requires that elected officials don’t abuse that flexibility – which gets back to us voters doing our job and getting rid of the politicians who aren’t serious about fiscal responsibility. There should be no sacred cows in state government, and this bill slaughters a few.
SB 137 by Senator Gerald Long and HB 527 by Representative Kay Katz allow the governor to place the interest from statutorily dedicated funds into the state general fund during a budget deficit.
- This bill diverts the interest earned on statutorily dedicated funds, excluding any that are constitutionally protected or mandated, to the state general fund during times of deficit to help mitigate cuts to vulnerable parts of the state budget.
Surprised that’s not already done.
HB 479 by Representative Kirk Talbot and SB 5 by Senator Conrad Appel increase non-hazardous employee contributions into LASERS while keeping benefits intact.
- Today, regular state employees in LASERS contribute eight percent of payroll towards the retirement system while the state employer contributes 22 percent of payroll. Employees are funding less than 27 percent of the total cost to support the retirement system. In 1987, employees funded 40.7 percent of the total cost to support the retirement system.
- Raising non-hazardous employee contributions to 11 percent of payroll will relieve the increasing burden of state retirement benefits on Louisiana taxpayers without affecting employee benefits in any way. This will result in approximately $24 million in state general fund savings, which can be used to offset reductions to higher education and healthcare. Even with this change, employees will fund 33.3 percent of the total cost, which is still well below the 1987 ratio. Among retirement systems for regular state employees without Social Security coverage, LASERS members will still contribute the second-lowest share towards retirement costs.
The state employees will be furious about this, and it’s a good thing they’re not in AFSCME or SEIU – because they’d be playing bongoes and smoking weed in the state capitol by the weekend like they did in Wisconsin. But Louisiana’s pension system is underfunded in a way the legacy media in the state has been highly delinquent in publicizing; without some major changes we will be Illinois by the end of the decade. This is a good first step.
HB 426 by Representative Chuck Kleckley adds the Commissioner of Administration to the boards of trustees of the state employees, teachers, and school employees’ retirement systems.
- Currently, the chairs of the House and Senate Retirement Committees and the Treasurer have a seat on the board of trustees of all four state retirement systems. Yet, the Commissioner of Administration only has a seat on the State Police retirement system board. Adding the budget architect for the executive branch to the other three boards would help ensure that the retirementsystems behave in a fiscally responsible manner with taxpayer dollars.
Improving Outcomes in Higher Education
SB 140 and SB 251 by Senator Conrad Appel and HB 391 and HB 588 by Speaker Jim Tucker and Representative Thomas Carmody restructure higher education to carry out the postsecondary needs of the state by creating a single governance board for higher education.
- This Constitutional Amendment and companion legislation create a single responsible entity for higher education. The current five-board management structure of higher education creates a middle-management layer of oversight that often hinders rather than promotes effective management and improved student outcomes. In fact, two institutions in different systems who wish to collaborate must obtain the permission of not one, not two, but three boards.
- A single, restructured, and pared down central system office will be able to:
- Streamline administrative oversight to encourage accountability for student performance on the campus level;
- Remove duplicative and disjointed administrative functions;
- Increase operational efficiencies through economies of scale and maximization of resources and expertise;
- Improve student outcomes through higher quality and more coordinated data collection, analysis, and dissemination.
The single-board fight is going to be fascinating, and while we stand by our assessment that Jindal is the most cautious politician in Louisiana we’ve ever seen it’s anything but cautious for him to back these bills. The idea that Southern University should have a board is ridiculous; it doesn’t make Southern or its satellites better schools but instead provides little political fiefdoms and some patronage for wannabes to feel important. And this isn’t an attempt to pick on Southern; LSU’s Board of Supervisors and the University of Louisiana board don’t have much better records. Have one board, then give the schools freedom to compete within that structure, and you’ll create a more responsive and dynamic higher ed system.
SB 183 and HB 537, by Senator Conrad Appel and Speaker Jim Tucker, address the critical postsecondary needs of the New Orleans region by restructuring the public postsecondary resources and services currently provided to the New Orleans region into a more effective collaborative arrangement.
- Today, the New Orleans region has three public postsecondary institutions that are not meeting the needs of the region or effectively maximizing the available resources to promote student achievement. While the University of New Orleans has a six-year graduation rate of 21 percent, Southern University at New Orleans graduates just eight percent of students in six years.
- Further, according to Board of Regents space utilization audits, while the classroom space on the UNO and SUNO campuses are in use less than 50 percent of the time, nearby Delgado Community College struggles with overcrowding.
- As of fall 2010, enrollment at UNO is down nearly 6,000 students or 35 percent since 2004-05; SUNO has seen a 13 percent or 500 student drop over the same time period. Meanwhile, Delgado’s enrollment has grown by 13 percent or 2,000 students.
- This initiative merges the University of New Orleans and Southern University at New Orleans into a single accredited four-year university within the University of Louisiana System: the University of Louisiana at New Orleans (ULNO). Candidates who are ready for a four-year degree would choose one of two colleges within this university:
- A selective research college, focused on key scientific and technical programs to meet workforce needs, and housing the university’s graduate programs
- A traditional four-year undergraduate college with complementary programs
- It enters ULNO into a collaborative agreement with nearby Delgado Community College to provide developmental education and counseling to under-prepared students who need additional help on track to a four-year degree. This program would be run on the ULNO campus, providing a four-year experience with two-year programming.
- It creates a single access point for all students by placing in the same building on the ULNO campus co-administered admissions, financial aid, and counseling. This ensures the proper placement of students based on their academic readiness and provides the necessary support services to facilitate successful program completion.
ULNO is a crappy name for the school; they ought to just call it UNO. UNO is a perfectly good name and the UNO people busted their rear ends to become UNO instead of LSUNO. Otherwise, these are the bills that merge UNO and SUNO, and they’re the reason the Southern alumni are protesting at the Capitol today. Someone should ask those alumni why our tax dollars should be subsidizing $9000 a year in tuition at a school which can’t graduate more than eight percent of its students, and why that kind of performance is OK. None of them will be able to answer those questions, which means the questioner will get called a racist.
HB 549 by Speaker Jim Tucker and SB 537 by President Joel Chaisson strengthen the relationship between the state and higher education in a GRAD Act 2.0.
- GRAD Act of 2010 established performance based contracts between postsecondary institutions and the state. This legislation strengthens the GRAD Act contracts negotiated between the Board of Regents and each institution in fall 2010 by prioritizing the key Student Success metrics— graduation rates, retention rates, and percent completers—and making them required for successful performance on contract targets. It also transforms the contract renewal into an annual process that reevaluates each institution’s progress to keep pace with performance improvement.
- It also grants operational autonomies in purchasing, personnel, facilities, and investment in a three-tiered structure based on performance. Capacity to manage these autonomies would be determined by the division of administration. The highest performing institutions would be eligible to completely transform their relationship with the state by:
- Participating in a pilot procurement code developed to meet the needs of higher education;
- Investing non-state monies in bonds to maximize investment returns;
- Administering all facilities projects except those funded by G.O. bonds, and;
- Purchasing their own risk management lines of coverage in areas like workers compensation.
- Finally, it improves data and transparency by adding a cost-performance analysis of resources and outcomes to the Board of Regents’ annual report on GRAD Act institutional progress that looks at, for example, the cost per degree at each institution. The bill also standardizes, expands, and coordinates student-tracking systems of course credits to facilitate on-time graduation, articulation, and transfer.
This one originally came out of the Flagship Coalition’s proposals, and the LSU folks want it. Anything which gives the individual schools more freedom to meet their own budget needs and serve their students is a good idea, particularly given the sclerotic bureaucracy Louisiana has built around higher education over the decades.
HB 526 by Representative Joel Robideaux standardizes community and technical college tuition to ensure equal access to two-year programs in every parish.
- The Louisiana Community and Technical College System has standardized services across parishes so that community and technical colleges are offering comparable services to every student. Yet, tuition is a function of an institution’s age because it’s set at the average rate when the school is opened. That means older community and technical colleges have lower tuition rates than newer ones—and since tuition increases have historically been percentages, no way to catch up with their peers.
- Roughly 70 percent of technical college students qualify for Pell Grants, yet technical college tuition is just 21 percent of the average Pell Grant award. With this legislation, schools will have the authority to phase in an increase to 55 percent of the average Pell Grant, which is still lower than the 62 percent SREB average.
- This bill standardizes the cost of community and technical college tuition to match the standardization of services in three ways:
- Standardizes community college tuition up to the highest rate as of July 1, 2011;
- Standardizes technical college tuition up to roughly 55% of the average Pell grant, or $2,000, phased in over three years;
- Standardizes the per-credit hour schedule of tuition and fees so that every hour at both community and technical colleges costs the same, no matter their location.
This is an improvement over the asinine way tuition is charged, but it misses the mark. The answer is for the state legislature to get out of the business of setting tuition at the state’s junior colleges. Those institutions are presumably populated with enough capable people that they can figure out what rate of tuition both meets their needs budget-wise and leads to healthy enrollment numbers. Certainly they would be more able to arrive upon such a number than some of the dunces in the state legislature; if not, then we need to hire some better administrators for the community and technical colleges. And yes, we need better legislators too – but rather than counting on angels and geniuses to descend on the capitol this fall, decentralizing power over minutiae like what Bossier Parish Community College is charging for tuition next fall is always a better idea.
HB 448 by Representative Hollis Downs aligns student credit hours with tuition to mirror the true full load a student should take to graduate on time.
- Today, students often “shop” for classes, signing up for many more than they intend to take. Schools are left with the sunk cost of instructors and classroom space for classes that are under-enrolled a few weeks into the semester. However, schools also need to take responsibility for this behavior by instituting course withdrawal policies that encourage responsible course enrollment by students.
- This bill addresses the issue of inappropriate course withdrawal by:
- Authorizing institutions to charge up to 15 hours of course credit at a rate of 1/12 of current tuition rate (or up to 11 hours at 1/8 of current tuition if on a quarter system);
- Updating TOPS award amounts to cover up to 15 hours of course credit;
- Establishing a standard statewide tuition reimbursement and course withdrawal policy to encourage responsible course enrollment by students.
- Students who decide to accelerate and take more than 15 hours are still rewarded with those hours at no additional cost.
Some college students will like this, but a lot – the ones who drop courses when they decide they don’t like the professor or can’t wake up early enough to make it to class or whatever – will be furious. This isn’t a bad idea, but it’s a slight improvement on a bad system. The state legislature shouldn’t be governing tuition or credit hours; the schools (and the market) should be doing that. If Louisiana Tech has a crappy policy on dropping classes, credit hours and tuition then UL-Monroe or Northwestern State might be in a position to steal students away as a result.
HB 97 by Representative Frank Hoffmann recognizes the growing expense of mandated costs by updating the existing Operational Fee to four percent of current tuition.
- As mandated costs like health insurance and retirement rise, the primary revenue stream to cover those costs has remained flat—at four percent of tuition and mandated fees as of August 15, 2004. This bill indexes the existing Operational Fee to four percent of current tuition, by removing the August 15, 2004 date.
The students will hate this, and lots of folks will call it a tax increase. It’s a price increase, not a tax increase, and it can be debated more honestly as such.
SB 53 and SB 52 by Senator John Alario and HB 390 and HB 457 by Representative Jane Smith boost the constitutionally protected funding of a vital merit-based college access tool, the TOPS Scholarship program.
- This legislation boosts the constitutionally protected funding of TOPS. This legislation also frees up state funding to protect higher education and health care, while further protecting TOPS funds in future years. In the FY12 proposed budget, TOPS funding increased by nearly $50 million over FY11 levels to keep pace with student demand and the cost of attendance.
- Nearly 500,000 students have attended college on a TOPS Scholarship who might not have otherwise afforded to do so. Roughly 50 percent of Louisiana students who attend college in state do so on with a TOPS award. TOPS improves student outcomes and incentivizes academic rigor at both the secondary and postsecondary levels. TOPS requires a rigorous 24-course core high school curriculum, while TOPS recipients graduate from college in six years at nearly three times the rate of non-TOPS recipients: 57 percent vs. 20 percent. By comparison, the statewide graduation rate in six years is just 37 percent.
“Protecting” TOPS isn’t all that great an idea, because as currently constituted it’s an entitlement in an age when we need less of those. What would have been a better idea would be to hold the line on TOPS funding and make the program more exclusive so as to promote stiffer competition for its scholarships and thus better performance by the state’s high school kids. Too many kids get TOPS and flunk out or drop out of college; that constitutes a waste of taxpayer money.
It’s good politics to push TOPS. People like the program. But in a few years this will have to be revisited, and some future governor and/or leges will get bludgeoned to death by the higher ed lobby for trying to fix it.
Increasing Education Options for Students
SB 43 by Senator Jack Donahue encourages the expansion of high performing charter operators by enabling long-term planning.
- Currently, a charter operator must apply and receive approval for a new or conversion charter school one at a time. This does not allow high-performing operators to create long-term business plans or benefit from economies of scale—and it doesn’t make Louisiana an attractive place for high-performing operators who want to expand or move to the state. These are operators who have, or wish to have, multiple schools and a proven track record of success in Louisiana. Under current law, approved charter schools must open no sooner than eight months and no later than 24 months, and only in July, August or September.
- This bill allows the Board of Elementary and Secondary Education to waive the eight month and/or the 24 month provision. High-performing charter operators may not need the required eight month period for due diligence, which was put into place to minimize shoddy charter school applications. The purpose of the 24 month ceiling was to prevent charter schools from taking up an approved slot under the law when Louisiana had a charter cap; the cap was removed in 2009.
- This bill also removes the July, August and September provision, which preserves the continuity of services to students when mid-year changes in administration may become necessary. Under this legislation, charter operators could receive approval for multiple charter schools at the same time to be opened over a number of years, allowing high quality operators to plan long-term and benefit from economies of scale. It also empowers BESE to expand high quality options for students based on the merits of individual charter operators and their proven success with Louisianan students.
An excellent bill. Ideally, somebody – or several somebodies – will create a bad-ass educational model in one market in the state and then expand it to all of the markets. Anything the legislature can do to promote an actual educational “industry” in Louisiana to compete with the current failed structure of school boards and teachers’ unions will get favorable treatment here.
HB 421 by Representative Steve Carter creates a mutually beneficial relationship between Louisiana businesses looking to expand educational options for their employees’ children and charter school operators lacking a location in which to set up a school.
- This bill creates a mutually beneficial relationship between Louisiana businesses and charter schools—a Business-Charter Partnership—by allowing, in exchange for a gift or free use of land or a facility, or the major renovation of an existing facility, preferred enrollment for dependents of company employees and a minority percentage of charter school board seats.
- A business, or group of businesses acting in concert, would receive preferred enrollment for up to 50 percent of the seats of a charter school, either as a new charter school or conversion of an already existing school to a charter school. The charter school could elect to reserve a minority percentage of the charter school’s governing board for designees of the business or group of businesses. In exchange, a business or group of businesses could offer an already existing building on their campus, a piece of land, or a floor of an office building, either as a donation or the use of which free of charge, for not less than the period of the charter agreement. A business could also enter into a partnership with an already existing public school to convert it to a charter school by making a major investment to upgrade and possibly expand the school to accommodate its employees’ children.
- This creates a pathway for businesses to invest in their communities and the facilities already available, without displacing students who already attend the school. These details would be determined between the charter school and the business in the facilities section of the charter application to BESE.
- The business could also opt to provide after-school enrichment activities geared towards the business’ field, or apply a theme to the school’s curriculum in line with its industry. In other words, businesses have an opportunity to train the next generation of workers for their company, both from the ranks of employees’ children and from the community at large, while the community benefits from another high quality educational option that may offer additional activities specifically geared towards a local company and local jobs.
Why not? Getting the state’s business and industry involved in running schools can’t be worse than what we currently have, plus if a company – let’s say it’s a manufacturer – is running a charter school aimed at training kids in the neighborhood or town where its plant is, they’re much less likely to pick up and leave for Brazil or Bangalore. Besides, businesses are the people who can actually make things work through innovation and out-of-the-box thinking; there hasn’t been much of that to speak of in K-12 education since World War II.
We like this bill.
Keeping Louisiana Communities Safe
HB 12 by Representative Ricky Templet will criminalize fake bath salts and synthetic marijuana.