Daily Report

This Afternoon's Headlines / Thu, May 31, 2012


Capitol Views by Maginnis: Senate OK's spending bill; showdown with House conservatives on tap

With over $300 million restored that was cut by the House, the Senate passed the appropriations bill today, 39-0, setting up a showdown with the lower chamber. With minimal exceptions, Finance Chairman Sen. Jack Donahue fended off about a dozen amendments seeking to restore funding to a variety of deleted programs, from the Louisiana Center for Women and Government to stipends for certified teachers. The upper chamber considered the bill for about two hours. The House might vote on concurring on Senate changes as early as this afternoon. If concurrence fails, the budget would go to a conference committee. In Senate Finance Committee, some of the $268 million in one-time money was moved around and matched to nonrecurring expenses in order to comply with the "Geymann rule" restricting such funds. That is not expected to be good enough in the view of fiscal conservatives, who vow to fight the reinclusion of the funds. But momentum is moving toward using that money in order to stabilize a budget already under stress. Read the full column here for additional coverage of action at the Capitol today.

(John Maginnis will publish a daily update throughout the legislative session on Daily Report PM. The report is also available to LaPolitics Weekly subscribers on the Subscribers Only page at LaPolitics.com. Registration is available on the homepage.)

Louisiana Public Broadcasting is providing a daily video update featuring highlights of the session, which you can see beginning at 6 p.m. here.

British drug maker files suit against Caldwell

GlaxoSmithKline is suing Louisiana Attorney General Buddy Caldwell for using private plaintiff's attorneys—including two lawyers who worked on his re-election campaign—to represent the state in its lawsuit against the British drug maker. Caldwell joined other states in filing suit against GSK early last year for allegedly hiding harmful side effects of its diabetes drug Avandia. According to the GSK suit, filed this morning in district court, Caldwell is violating the company's due process rights by using private contingency counsel to represent the interests of the state in the Avandia litigation. "The problem with having private contingency counsel is, they are about making money, and that is an inherent conflict of interest," says P.D. Villarreal, senior vice president-global litigation for GSK. "We are entitled to be sued by the state of Louisiana … but not by people who are just out to make money." Specifically, the suit alleges that Caldwell violated Louisiana law by hiring New Orleans plaintiff's attorney Allan Kanner without going through the legally required procurement process for a professional services contract. According to the suit, Kanner subsequently subcontracted some of the legal work out to two attorneys connected to Caldwell's re-election campaign: Wade Shows, who served as Caldwell's campaign treasurer, and Allen Usry, whom the suit identifies as Caldwell's campaign chief. Caldwell's office declined to comment on the specific allegations except to say in a written response: "We have total confidence in the procedures relied upon to institute this important work for the state." —Stephanie Riegel

AG's opinion on CATS tax raises constitutionality issue, Walker says

In an opinion issued Wednesday by Attorney General Buddy Caldwell that says the state's homestead exemption should be applied to the 10.6-mill property tax OK'd by voters in Baton Rouge and Baker last month, Metro Councilman and Mayor Pro Tem Mike Walker says he found one of Caldwell's comments particularly interesting. "A 'municipality' means an incorporated city, town or village. Since CATS is not a city, town or village, it is the opinion of this office that any special ad valorem tax levied by it is subject to the homestead exemption," Caldwell was quoted as saying about his opinion. "So," Walker says, "now I'm wondering if we shouldn't turn around and ask the AG for another opinion on whether or not the entire tax was really legal." He added: "Because if the AG doesn't consider this gerrymandered district to be a municipality, then I don't know how they can legally hold a tax election." Many who opposed the CATS tax raised similar questions on the constitutionality of the taxing district prior to the vote, while CATS officials and tax supporters have maintained it is constitutional. The Hayride reports Caldwell's opinion "cast severe doubt on the constitutionality" of the CATS tax. You can check out that article here. —Steve Sanoski

Dropout rate in Louisiana drops for third straight year

Louisiana's annual dropout rate has fallen for the third year in a row, according to a report released today by the Louisiana Department of Education. The latest figures show that roughly 1,100 fewer students in grades seven through 12 dropped out in the 2010-11 academic year than did during the 2009-10 school year. That's about an 11% decrease, LDOE says. Put another way, 3.5% of students dropped out during the 2009-10 school year, compared to 3.1% last year. Annual dropout rates also decreased among students in grades 9 through 12 for the third year in a row. In 2009-10, 8,704 high school students dropped out of school. In 2010-11, that figure dropped by 707 students to 7,997 students, representing an 8.1% reduction from the previous year. LDOE officials attribute the decline to improved graduation rates at the state and local level, as well as new and improved resources supporting early intervention and more accurate data collection and analysis. More information on today's dropout report and historical dropout figures can be found at the LDOE website here.

Report: La. at No. 49 for state tax growth

Louisiana is ranked 49th in the United States for its 1.2% growth rate of state tax collections from 2010 to 2011, according to a new report from the U.S. Census Bureau. Hawaii came in 50th with 0.40% growth. Moreover, Louisiana ranked 43rd for its overall growth rate of 3% in collections between 1997 and 2011. North Dakota ranked first for growth between 2010 and 2011, at 44.5%, and its 9.6% growth in collections between 1997 and 2011 also earned it the top spot among all states. Across the nation, state tax collections reached $764 billion in 2011, an increase of 8.9% over 2010 and the second-highest ever collected, behind the $781 billion collected in 2008. Even accounting for the recession of recent years, state taxes have grown by 4% since 1997. Among states levying an individual income tax, Louisiana's top rate of 6%—kicking in at an income level of $50,000, among the three brackets—ranks 21st highest nationally, according to the Taxfoundation.org. For 2010, Louisiana collected $506 per person, ranking 36th. You can check out the complete report here.

Editor's note: This item has been changed since its original publication.

Student-loan debt rises 8% to $904B

Americans are stepping up borrowing to pay for college while cutting other debt as a weak job market contributes to increased college enrollment, The Wall Street Journal reports, citing new Federal Reserve Bank of New York data. Americans owed $904 billion in student loans at the end of March, nearly 8% higher than a year ago, the New York Fed says today in its quarterly report on consumer credit. That is more than the $679 billion on their credit cards at the end of the first quarter. The New York Fed's estimates of student debt are about 10% lower than the more than $1 trillion figure cited earlier this year by the Consumer Financial Protection Bureau. The New York Fed's estimate is based on a sampling of consumer-credit agency accounts; the CFPB's estimate is based on government data and a survey of private lenders. The New York Fed report shows that Americans are still cutting overall debt—a process known as "deleveraging" that began in the wake of the financial crisis. The report also indicates a growing number of Americans are struggling to repay their student loans, based on the number of borrowers who failed to make a payment on a student-loan account in the past 90 days.

Sports roundup: Rhymes, Gausman named to Collegiate Baseball All-America team … Saints customers get early Hornets seat choice … SEC has shot at college history

Top Tigers: LSU Tigers outfielder Raph Rhymes and righthander Kevin Gausman have been named to the Louisville Slugger first team All-Americans by Collegiate Baseball, the newspaper announced today. Rhymes, the nation's leading hitter, is batting .459 headed into this weekend's regional tournament in Baton Rouge. And Gausman—expected to be a top-five pick in the Major League Baseball draft Monday—was 10-1 with a 2.84 earned run average. Both players were also named semifinalists for the 2012 USA Baseball Golden Spikes Award on Tuesday.

Ticket takers: On the heels of the New Orleans Hornets' lottery luck Wednesday, the club's union with the NFL's New Orleans Saints began taking shape today in the area of ticket promotions. Saints season ticket holders are being offered a chance to select season seats for Hornets games before they are offered to the general public. The NFL club made the announcement in an email to its approximately 70,000 season ticket holders today. In April, Saints owner Tom Benson agreed to buy the Hornets for $338 million. On Wednesday night, the Hornets won the first overall pick in the NBA's draft lottery, opening the way for the club to select Kentucky star Anthony Davis in the June 28 draft.

Break out the broom: The SEC has a chance this year to win national championships in football, men's basketball and baseball all in the same school year—something that's only been done two other times in history and hasn't occurred in four decades. As ESPN reports, the Pac-12 has done it both times previously (then the Pac-10), in 1967 and 1972. To join the exclusive "sweep" club, the SEC needs one of its eight teams in the 2012 NCAA baseball tournament to win it all. Florida is the No. 1 overall seed, while LSU is No. 7 and two-time defending champion South Carolina is No. 8. If you hadn't heard, Alabama won the 2011 football national championship over LSU, and Kentucky took home the 2011-12 basketball national championship in April. Read the full story here.

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