On Thursday, Feb. 8th, the Louisiana Association of Business and Industry (LABI), the state’s largest and most influential trade organization, hosted its annual luncheon at the Crowne Plaza Hotel in Baton Rouge. Laura Ingraham, the far-right talk radio host and Fox News contributor, had flown in to deliver the keynote address, hitching a free ride on a private jet owned by Lane Grigsby, one of Louisiana’s most prolific benefactors to conservative causes and campaigns and the founder of Cajun Industries, which had ponied up enough cash to earn an exclusive spot at the top of the marquee.
The decision to book Ingraham, it turned out, was a colossal mistake. Ostensibly, LABI’s president, Stephen Waguespack, had hoped to use the luncheon as an opportunity to drum up support for his latest project, Louisiana Checkbook, a proposed website that would track each and every dime spent by state and local governments. He’d even flown in the assistant treasurer of Ohio, which had created the model he hoped to emulate, to explain how it’d work.
But Ingraham’s incendiary remarks about the #metoo movement, her praise of Confederate monuments, and her disparaging and disrespectful comments about New Orleans Mayor Mitch Landrieu and Gov. John Bel Edwards, who was in attendance, didn’t sit well with the audience. “When she finished talking, about two dozen people got up to give her a standing ovation, but well over a hundred others stayed in their seats,” Julia O’Donoghue of The Times-Picayune reported. “LABI then quickly sent out their statement claiming that they didn’t agree with all Ingraham had said once the event wrapped up.” (Contrary to a report by a conservative blogger, Gov. Edwards did not leave during Ingraham’s speech; however, according to those present, several African-American business leaders and a handful of well-known lobbyists did leave in protest).
Stephen Waguespack had misread his own organization, believing they would enjoy an incendiary and hyper-partisan act of political theater. At a time in which civil, bipartisan dialogue is desperately needed to prevent an impending $1 billion budget shortfall, he paid to host and promote a Fox News pundit who became a celebrity merely by being insulting.
In many ways, though, the decision to book Ingraham is a perfect illustration of the leadership that has led Louisiana to the brink of yet another fiscal cliff. As hard as he has tried, Waguespack cannot escape the fact that the primary reason we find ourselves, once again, debating how to plug a $1 billion budget shortfall is directly attributable to the decisions made during his tenure as Bobby Jindal’s chief of staff. For several years, Louisiana was led by an administration who cared more about pleasing Grover Norquist, “the human equivalent of pond scum” to quote James Carville, than being responsible stewards of the public fisc.
Indeed, Waguespack’s intransigent opposition to raising taxes, any taxes, is one of the main reasons why, when he was 38 years old, LABI poached him from the Jindal administration. Like Norquist, Waguespack has long argued, despite reams of evidence to the contrary, that the government can magically cut its way to prosperity. In 2015, when Jindal received Norquist’s blessing to raise revenue in order to plug a $1.6 billion shortfall, Waguespack lamented to The Advocate, “They (the legislature) didn’t want to hear about ideas to reduce government. They didn’t want to hear about any ideas to reform entitlements. They didn’t want to hear any ideas about unlocking funds and using some of those dedicated dollars.”
Left unsaid, however, was that the reason Louisiana faced a $1.6 billion shortfall was precisely because of unsustainable cuts and the use of one-time funds. During the final year of the Jindal administration, we ran out of money, and we ran out of gimmicks.
Three years later, we continue to confront the same structural problems, and Waguespack continues to make the same bogus argument.
Louisianians would be wise to stop buying what he is selling.
As president of LABI, Waguespack is paid to ensure that legislators prioritize tax cuts and exemptions for corporations above anything else, which is why, rather than confront the immediate crisis of a $1 billion shortfall, he is pitching a website that tracks government spending.
Never mind that Louisiana already has such a website; it’s too “clunky.” Ignore the fact that the non-partisan organization United States Public Interest Research Group ranks our state’s current website seventh in the entire country, praising “Louisiana as a ‘leading state’ in offering an easy-to-use website and providing data on an array of expenditures,” as Devon Sanders of LSU’s Manship News Service reported only two weeks ago in The Daily Advertiser. And pay no attention to the fact that it will take years before it could even be operational. Louisiana Checkbook, we are told, will help us finally solve our budget woes by shining a brighter light on wasteful government spending.
Waguespack is so confident, he already scooped up the domain.
You’d be hard-pressed to find someone who is opposed to transparency in government spending, even here in Louisiana. But it’s impossible to ignore those who have lined up alongside LABI to market this proposed website as if it is some kind of panacea. Suffice it to say, some aren’t exactly known for their commitment to good government.
Take for example, John Kay, the director of Louisiana’s chapter of Americans for Prosperity, an organization that spent upwards of $200 million in “dark money” for the purposes of influencing the 2016 election. The day before LABI’s luncheon, Kay appeared on Shreveport’s KEEL radio to pitch the website and extol the importance of transparency.
In addition to Americans for Prosperity, LouisianaCheckbook.com also boasts the support of a predictable roster of industry lobbying organizations. Among others, there’s the Louisiana Oil and Gas Association (LOGA), LAmmonia (Louisiana Ammonia Producers), the Louisiana Chemical Association, a few regional chapters of the Chamber of Commerce, an organization that calls itself Coalition for Common Sense (which lobbies in support of restricting access to the judicial system), and the Orwellian-named Solutions through Science (which is operated out of the same small office as the Coalition for Common Sense and lobbies on behalf of the chemical industry).
Again, transparency should be always be a priority, and here on The Bayou Brief, we feature an entire section dedicated to stories about ethics and transparency in government. But it is clear that, when lining up his usual suspects of supporters for any given cause, Waguespack didn’t completely think through the implications. Almost immediately after pitching Louisiana Checkbook, people began asking him, on Twitter, whether the website would include tax exemptions for the industries for whom he lobbies. He didn’t respond to the question until it was put to him directly, in person, during LABI’s luncheon.
“(The website) can and should include everything that’s a public record (including tax expenditures),” he told reporter Sam Karlin.
The Bayou Brief also reached out to Alexis Schlarte, an associate of the “issues management firm” Harris DeVille and the head of Solutions through Science. The organization’s name is purposely misleading: They represent chlorine manufacturers, also known as salt dome operators, an industry that doesn’t have the most stellar record for safety.
Would they be willing to have their industry’s exemptions listed on Louisiana Checkbook? “Yes, of course,” Schlarte wrote. “That information is already public on LED’s website.” That may be true, but try to find those documents.
As the old adage goes, be careful what you wish for, because if the public truly had a full and complete understanding of the billions Louisiana needlessly squanders on exemptions with some of the most profitable corporations on the planet, it’d be much more difficult for anyone to make the case that we should be outraged whenever public employees attend an out-of-state conference or every time the government buys office furniture at retail and not wholesale price.
Consider this: According to the Department of Revenue’s most recent “tax exemption budget” report, during the year 2015, Louisiana exempted $196 million in severance taxes and $96 million in petroleum products taxes, and that represents only a small portion of the incentives and exemptions Louisiana gives to the most profitable industry in the world, oil and gas.
“Over the past 20 years, Exxon Mobil has been exempted from paying almost $700 million in property taxes that would have otherwise helped pay for East Baton Rouge Parish schools, police officers, parks, libraries and other parish operations,” The Advocate’s Rebekah Allen recently wrote in a blockbuster and must-read report titled “Louisiana’s costliest incentive program allowed companies to cut jobs while saving billions in taxes.”
In August of last year, the non-profit organization Together Louisiana published an astonishing case study, “Giving Away the Farm: A Cost-Benefit Analysis of Louisiana’s Industrial Tax Exemption Program in Rapides Parish, 1998-2017.” Among other things, the report found that these exemptions have resulted in a yearly loss of approximately $23 million to Rapides Parish’s schools, police jury, sheriff’s department, libraries, roads, fire districts, levees, drainage systems, and parks.
All told, Louisiana has awarded $312.9 million in subsidies to six mega-million dollar companies in Rapides Parish, resulting in the net creation of 478 jobs. Put another way, the state spent $654,663 for every job created.
According to another report, in 2016, the state of Louisiana gave away more than $208 million in exemptions in order to create 760 permanent new jobs, or $273,000 a job. Among those who received exemptions, the ammonia manufacturer CF Industries, which pocketed more than $5 million, creating a total of 15 new permanent jobs. The chemical giant BASF received more than $11 million, with no new permanent jobs created as a consequence.
Together Louisiana puts this program into greater context:
And it’s a huge program:
If Stephen Waguespack is genuinely interested in finding waste, fraud, and abuse in government, he doesn’t need a new website, and he doesn’t need to look far. Louisiana isn’t on the edge of a fiscal cliff because we spend too much on education or health care or infrastructure or social services. We are, once again, on edge because too many of our business leaders refuse to confront that we can no longer afford to be a welfare state for the wealthy.
Perhaps Waguespack and LABI will never acknowledge this, but countless business leaders across the state have.
Laura Ingraham wasn’t the only reason people walked out of that luncheon.
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