red herring : noun
- a dried, smoked herring (fish) which is turned red by the smoking process.
- in argument, something that is designed to divert an opponent’s attention from the central issue.
The term comes from William Cobbett, an early 19th century English journalist, who claimed he had used a salted cured herring (red herring) to mask odors from dogs following a trail.
For nearly two years, Gov. John Bel Edwards has been pleading with a GOP legislative faction to come up with a long-term plan for solving Louisiana’s fiscal problem – any plan. On Monday, January 29th, House Speaker Taylor Barras did. Sort of.
In a letter to the governor, Barras said, ”The attached recommendations represent priorities that I and a majority of House members will require to be part of the final solution.” Leaving aside for a moment the use of the ominous phrasing “final solution,” let’s delve into the recommendations enumerated in that missive, and what they might actually do to improve Louisiana’s budgetary imbalance.
The biggest attention-grabber thus far has been the demand for a “Louisiana Checkbook” website. Based on an Ohio model, the revamp of our state’s current LaTrac online spending website would include “credit card transactions, contracts, salaries of state employees, and details on debt” from “20 state agencies, the judicial and legislative branches, boards and commissions and eventually local government.”
It sounds great, and conservatives have been quick to jump on the idea. There’s a website – LouisianaCheckbook.com – and a Twitter handle, @LACheckbook, that popped up on the web right about the time the Barras’s letter to the governor was released to the media. According to its website, supporters include the Pelican Institute for Public Policy, a Louisiana-based conservative think tank; Americans for Prosperity, the conservative advocacy organization founded and funded by the Koch brothers; the Louisiana Chemical Association; the Louisiana Oil and Gas Association; a handful of local Chamber of Commerce chapters, and the Louisiana Association of Business and Industry (LABI). The site solicits more supporters, specifically “business or trade groups.” LABI president Stephen Waguespack has become diligent in promoting the concept with his tweets, and LABI’s annual meeting on Feb. 8th will feature a panel discussion with one of the creators of Ohio’s website.
But what’s the price tag and – realistically – what’s the timeline?
The Ohio site took 18 month to create, cost $814,000 to build, and requires an estimated $1.3 million per year to update and run. Ohio’s state agencies and local governments already had a “uniform accounting network” in place. Louisiana’s Division of Administration, on the other hand, has long been frustrated by state agencies running on a variety of computer operating systems, which cannot “speak” to each other.
Louisiana began consolidating its computer systems in 2014; however recurring budget shortfalls in the intervening years have reduced the appropriations for the project and slowed its progress. And as Commissioner of Administration Jay Dardenne said when presenting the executive budget proposal Jan. 22nd, “To fund the multi-year cost of adding agencies in the budget module of la.gov is a $30-million commitment. This is what is going to get la.gov and LaTrac to look like the Ohio Checkbook concept. We can’t do anything like Ohio Checkbook until we have every agency of state government singing off the same sheet of music, and using exactly the same type of budgeting and reporting. That doesn’t happen right now.”
In response to the recent clamor for a Louisiana Checkbook site, Gov. John Bel Edwards issued a Feb. 1st statement regarding the conversion to uniform reporting for state agencies: “If this is funded, the conversion will be complete by July 2021.” Additionally, he said, “The Legislature and Judiciary do not have a reporting system similar to LaTrac” and including them would incur additional costs.
One has to ask, then, exactly how will a website project that can’t be completed for over three years, at a minimum required cost of more than $30 million dollars, reduce the $884 million fall off the fiscal cliff that occurs in less than five months from now?
The second demand in the Speaker’s letter is the establishment of a “state expenditure limit.” This would be calculated using a three-year average rate based on growth of state population, growth of total revenue, growth of state personal income, and the southern U.S. Consumer Price Index. It would be applied to the prior year’s budget appropriation, imposing that as a cap on the subsequent budget.
Speaker Barras acknowledges it will require a Constitutional Amendment. Yet even if the enabling legislation were to be passed during legislative session this spring, voters could not weigh in on the concept until the elections in November. That means if the spending limit were to pass, it could not be imposed until the subsequent budget, beginning July 1, 2019.
Again, the question: how does this help lower the fall off the fiscal cliff that commences July 1, 2018?
The most extensive requirements in Barras’ letter involve Medicaid – not surprising since health care comprises 26% of the entire State General Fund, and, with federal funds included, half of the total state budget. It is also one of two budget segments without major sources of dedicated funding streams, leaving it vulnerable to budget cuts. (The other is higher education.)
The Speaker’s letter insists on tightening income eligibility requirements to qualify for Medicaid, along with instituting work requirements and co-pays for Medicaid recipients. Tightening the eligibility requirements will necessitate legislation to permit the state Department of Health access to state Department of Revenue records. Work requirements and co-payment plan will require permissions (waivers) from the federal Centers for Medicare and Medicaid Services (CMS) – a process that could take up to two years to finalize.
Once again, will this do anything to alleviate the imminent loss of revenue, due to the expiration of “temporary” taxes this year?
Speaker Barras’ letter to the Governor states, “I am requesting that these reform measures, by topic, be included in any Special Session call you would make.” But for the regular session which begins March 12th, Rep. Lance Harris (R-Alexandria) has already filed HB 46, which would institute the Medicaid work requirement. And Rep. Barry Ivey (R-Central) has filed HB 50, to set up the “Louisiana Fiscal Transparency” website.
Clearly, neither of these items are truly fiscal matters, which are constitutionally prohibited from being addressed during regular sessions in even-numbered years. In other words, requiring they be part of a Special Session call is another red herring.
Lastly, Barras had reportedly promised to present a list by Friday, Feb. 2nd of revenue-raising areas House Republicans would consider. It did not materialize, just as it hasn’t since Gov. Edwards sent his letter to the Speaker July 20, 2017, asking for such a list.
Publisher’s Note: On behalf of The Bayou Brief, I am proud to announce that Sue Lincoln, a veteran reporter who has been covering Louisiana politics for nearly three decades, is joining our team and will serve as our capitol correspondent.
Sue will be covering the upcoming legislative session on the ground in Baton Rouge and in halls and backrooms of the House That Huey Built, in a similar but more expansive role than her previous position at WRKF, Baton Rouge’s NPR affiliate, where, for the past four years, among other things, she hosted the popular daily segment “Capitol Access.”
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