Daily Report

This Afternoon's Headlines / Tue, April 16, 2013


Moret says tax exemptions hurt higher ed funding

Greater use of the state's myriad tax exemptions over the past several years has been a major cause of budget cuts to higher education, says LED Secretary Stephen Moret. Almost half of the recent decline in state revenues (which impacts higher education funding) is attributable to greater utilization of programs such as the inventory tax credit and the film incentive program, he says. "While obviously we haven't gotten a lot of traction with tax reform, one of the opportunities in the long term is to reduce the number of exemptions, which would enable us to have a more stable funding base for all of state government and avoid the situation we've faced the last few years," Moret says. However, Moret expects the state's revenue picture to improve, thanks in part to major industrial projects. "We're going to have a much more favorable overall budget environment," says Moret, who addressed LSU's Transition Advisory Team today. Interim LSU President William Jenkins remarked that incoming president King Alexander "is delighted to hear that." Moret listed several examples of how higher education helped the state and LED land several big project wins, including the partnership with LSU that helped attract IBM to Baton Rouge. He says more economic development initiatives in the future will encourage legislators to support funding for higher ed. "There's just tremendous bipartisan support in the Legislature for anything that creates a significant number of quality jobs," Moret says. —David Jacobs

Editor's note: This story has been changed since its original publication to clarify the impact of state revenues on higher education.

Isaacson suggests blending online, classroom learning at LSU

The college classroom of the future will more often feature a "master teacher" rather than a high-salaried, tenured lecturer, says Walter Isaacson, biographer, Louisiana native and CEO of the Aspen Institute think tank. As LSU restructures, he says, officials should look to increase efficiency by taking advantage of massive open online courses, or MOOCs, provided by elite universities. Classes would hear a lecture online—for example, a statistics presentation by a star professor at MIT—but still meet in person to discuss the material and participate in labs and projects. LSU might also contribute MOOCs in areas where it excels, such as civil engineering or petrochemicals. As funding becomes scarce for universities nationwide, it doesn't make sense for every university to try to replicate top-level expertise in every academic area, Isaacson says. He made his remarks by phone at today's meeting of the LSU Transition Advisory Team. The LSU Board of Supervisors will hear a presentation Wednesday from the team, which has been meeting since February and intends to present reorganization recommendations to the board this summer. The team hopes to find ways to monetize university assets and find savings and efficiencies by having the system's units work together more closely: sharing faculty, for example. However, members stressed today that they don't want to consolidate decision making at the system level. Rather, they say they want to empower people on the campuses to make decisions without bureaucratic interference. —David Jacobs

Capitol Views: Kennedy warns senators about vendor payment plan

Treasurer John Kennedy told senators today that he might move to try to block the administration's plan to set up a new payment system for state vendors. The Jindal administration is planning to contract with the Bank of America to replace payments by check with a program it calls ePayables that would make payments to vendors by depositing funds into merchant accounts. The vendors would pay Bank of America to get their funds. "The only winner in this will be Bank of America," Kennedy told the Senate Finance Committee during a budget review of his department. He said the arrangement could violate the state constitution, which places authority to disburse funds with the treasurer. "If we can't work it out, I will have to seek a declaratory judgment," he said. The administration has built $1.5 million in savings into the proposed budget, but Commissioner of Administration Kristy Nichols said annual savings could reach $3.6 million. LSU has been using a similar system since 2010. "What's behind this is a big fee to Bank of America that it will share with the state," said Kennedy. "My argument is, let's do it in-house." After his appearance, Nichols issued a statement that reads in part: "ePayables is a great example of our efforts to modernize government business practices and apply smarter technologies that save taxpayer dollars." The statement continued, "It's disappointing that the treasurer would once again make public pronouncements that misinform and distort the facts, but we trust that ultimately we can work cooperatively and not let petty bureaucratic turf protection get in the way of implementing this money-saving initiative."

—With income tax repeal apparently dead at the Capitol, the focus among groups of legislators is shifting to raising revenues to address the severe budget challenge. The Ways and Means Committee was scheduled to hear bills in committee this afternoon, but Ways and Means Committee Chairman Rep. Joel Robideaux, R-Lafayette, announced that they have been rescheduled for Monday. A bill By Rep. Katrina Jackson, D-Monroe, raises the cigarette tax to 69 cents per pack from the current 36 cents, while a bill by Rep. Harold Ritchie, D-Bogalusa, increases the levy $1.01. The revenue raising efforts would run up against Gov. Bobby Jindal's pledge to keep any tax increases revenue-neutral by decreasing other taxes. In that vein, Rep. Kirk Talbot, R-River Ridge, whose own tax swap bills have been deferred, says he could see using a tobacco tax increase to repeal the corporate franchise tax.

(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.

Bill would double annual licensing fee for La. contractors

The state's contractors are supporting a bill that would double their annual licensing fee to $200 from $100, and dedicate the $1.7 million raised by the increase to the state's certified schools of construction management and technology. "Since higher education funding is so hard to come by in this state, we thought it would be a good way for the schools to fund their construction programs," says Ken Naquin, CEO of the Louisiana Association of General Contractors, whose membership is about 22,000. "We've got $60 billion worth of industrial construction coming to this state in the next few years, and we need our workforce to be ready." Rep. Erich Ponti, R-Baton Rouge, is sponsoring the bill, which would use a formula to allocate the money generated among the three eligible schools—LSU, ULM and Louisiana Tech. Half the funds would be evenly divided among the schools; the other half would be split based on the number of graduates from each school from the previous year. Naquin says there is widespread support for the bill among industry and higher education stakeholders. But businessman and political activist Lane Grigsby is actively fighting the legislation, which he says amounts to a tax on contractors. "Contractors are going to have to pay a $100 tax every year so higher ed can have some money," says Grigsby. "Why don't we tax them $1,000 each, and then we can solve the state's budget crisis?" The House Commerce Committee is scheduled to take up the bill Monday. —Stephanie Riegel

'Real Estate Weekly': Capital Region home sales climb 16% in March

March has been the best month yet this year for home sales in the Capital Region, with approximately 16% more sales recorded than in March 2012, according to the latest report from the Greater Baton Rouge Association of Realtors. A total of 765 homes were sold during the month in the eight-parish region tracked by the GBRAR, which is 107 more than the total for March last year. Sales were up in January and February, but at the more modest pace of 9% and 5%, respectively. The March report also suggests the Capital Region market has turned the corner to a seller's market. Months inventory—or the number of months it would take to sell all homes on the market at the current pace—was at 5.3 in March, down from 6.9 a year earlier. A months inventory reading below 6 months is generally considered to indicate a seller's market. At the end of the first quarter of the year, home sales in the Capital Region—which includes East Baton Rouge, Ascension, Livingston, West Baton Rouge, East Feliciana, West Feliciana, Iberville and Point Coupee parishes—are now up 11.1%: 1,784 in 2013 compared to 1,605 last year. —Steve Sanoski Read the full story and get local real estate news in the new Real Estate Weekly e-newsletter here.

Jindal releases construction funding proposal

Included in Gov. Bobby Jindal's capital outlay funding proposal for the next fiscal year, released today, is $50 million for a renovation of Patrick F. Taylor Hall at LSU and $11.25 million for the Automotive Training Facility at Baton Rouge Community College. Another $14 million is allocated for additional widening of Interstate 12 in East Baton Rouge and Livingston parishes. Other local projects included in the plan are:
• $11 million for planning, utilities, right of way and construction of Essen Lane widening project from Interstate 10 to Perkins Road
• $1 million each for renovations to the Old Engineering Shops Art Department at LSU as well as French House renovations on campus
• $2.5 million for planning and construction of Nicholson Gateway infrastructure improvements at LSU
• $350,000 for sewer and street improvements near the intersection of Jesse Stone Avenue and E.C. Harrison Drive at Southern University
• $2.75 million for planning, construction and renovations to the Department of Public Safety's DPS and ISB Data Centers in East Baton Rouge Parish
• $2.7 million for renovations to the Louisiana Workforce Commission's administrative headquarters in Baton Rouge.
Jindal has posted the complete list of Capital Region projects included in his proposal at his website here.

Three interviewed to become legislative chief financial adviser

Three people have applied to become the Legislature's chief financial adviser, and the House and Senate budget committees interviewed the candidates today in closed-door meetings. At later meetings the committees will make their selection of who to recommend for the job of legislative fiscal officer. The full House and Senate must approve the person selected for the position. All three contenders for the job advertisement, which was posted nationally six months ago, come from inside the Louisiana Capitol. The applicants are: Greg Albrecht, chief economist for the Legislative Fiscal Office; Shawn Hotstream, senior fiscal analyst and section director for the Legislative Fiscal Office; and Chris Keaton, budget analyst for the House Fiscal Division. When the job was last open, in 2005, 30 people submitted applications. The fiscal officer leads an agency that advises lawmakers on financial decisions and that estimates the costs of spending and tax break proposals. The post is open because Gordon Monk retired last year. John Carpenter, a former House staffer and former chief administrative officer in Mayor Kip Holden's office, is working as interim legislative fiscal officer, but agreed not to seek the permanent position when he was named to the $153,000-a-year job.

News roundup: Panel discussion with four former La. governors to be live-streamed Wednesday … '225' takes you on a tour of BetterBlock BR … Outage grounds American Airlines flights

It's all online: If you can't make it to the panel discussion featuring four former Louisiana governors—Kathleen Blanco, Edwin Edwards, Mike Foster and Buddy Roemer—on Wednesday afternoon, you can view it via a live stream. The panel discussion will be a featured part of Public Administration Institute Student Association Day, to be held on the LSU campus. It is set to begin at 1 p.m., and you can find it here.

In living color: The BetterBlock BR event transformed two blocks of Government Street on Saturday to show off the potential community aspects that could be created along the Mid City corridor. Various pop-up shops, bike and pedestrian lanes, a park area for activities and much more were at the event. If you missed the festivities, check out a brief 225 video of it here.

Unfriendly skies: American Airlines' flights across the country are grounded because of computer problems, The Associated Press reports. American asked the Federal Aviation Administration to halt its flights until 4 p.m. Central time. Flights on regional affiliate American Eagle heading to Dallas, Chicago or New York's LaGuardia Airport were stopped until 2:30 p.m. Some passengers are stuck on planes; others can't make reservations. Passengers are using social media to flood the airline with complaints. On Twitter, American is sending out apologies but not offering customers much information about when the problem will be fixed.

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