Bad Week for Louisiana Taxpayers

 

Thursday, September 3, 2009

Baton Rouge, Louisiana

STATE SPENDING UP- SERVICES DOWN

Louisiana taxpayers just can’t get a break.  It’s bad enough that the economy continues to languish, unemployment rates are on the rise in the Bayou State, and home foreclosures are increasing.  Even the movie business in the hottest month of the year is way off.   One would think that in the midst of the economic turmoil, state agencies would lay low, and not add to the financial turmoil.  But it was not to be.  Louisiana officials continue to dole out state funds and leave federal dollars on the table for other states to gobble up.  And with next year’s budget deficit predicted to be well over one billion dollars, the choices could rapidly come down to a major ax falling on spending or a call for tax increases.

Tax amnesty kicks off this new month with an archaic, inefficient and unfair concept of letting delinquent tax cheats pay up years ofback taxes with no penalty.  What kind of message is it that one can just refuse to pay your state taxes, set the money aside and earn interest, and then wait for the tax holiday that seems to crop up every few years?  Isn’t it the law that one pays taxes or it is a crime if you do not?  The tax cheats get off the hook with no penalty, and the law abiding taxpayer thus carries an even larger burden to make up for the guy who violates the law.

And why does the state even consider such a tax holiday?  Where is the creative thinking to tie the hands of delinquent taxpayers in any number of ways?  Haven’t paid your taxes?  No drivers license, no hunting license, no welfare checks, no building permit, no hand gun permit, no business license of any kind.  The Department of Revenue computer list should be made available to any agency or business who deals with any public agency.  LSU football tickets?  Not if you owe back taxes.  Go to register for college?  You are refused if back taxes are owed.  The list is extensive where the public has dealings with public entities. All it would take is a simple check of the computer delinquency list. No pay, no play.  If such a system was in place, delinquent taxes would be flowing in.  And law abiding taxpayers who follow the law would not be carrying an undue load.

What about the decision by the state Department of Transportation to reject any plans for high-speed rail between New Orleans and Baton Rouge?  States all over the country are seeking a slice of the billions of dollars in the federal stimulus package for similar train service.  California alone submitted 42 applications seeking $1.1 billion and other states the size of Louisiana are seeking as much as $400 million for such faster passenger rail service.  Louisiana officials say the plan would not pay for itself.  So what mode of transportation does?  Do state and local highways run self sufficiently?  Don’t taxpayers subsidize airports all over the state including New Orleans and Baton Rouge?

And wouldn’t rail service between the state’s two largest cities relieve highway traffic that crowds the same routes?   As the population grows south of the state capitol, adding a lane to I-10 will cost billions because it is necessary to build numerous bridges along the route.  A good comparison can be made in New Mexico where a rail line was built between Albuquerque and Santa Fe to avoid adding lanes to I-25.  The length is 90 miles, the same distance between New Orleans and Baton Rouge.  A number of critics blame the Governor for putting his national aspirations ahead of the state’s interests.  That would be regrettable for as the head of the Baton Rouge Area Chamber said this week:  “There isn’t a better project than intercity rail to illustrate the future of these two regions being linked.”

“Ya want fries with that?”Â  That’s what they are saying in Northeast Louisiana, my old stompin’ grounds, where some $37 million dollars in state economic development funds will be spent on a sweet potato plant to produce french fries by a Nebraska company.  Legitimate questions are being raised as to why a similar request by Louisiana’s largest sweet potato producer, Bruce Foods, has been put on the back burner.  I listened to Bruce Foods president Si Brown on the radio last week saying he would have built just as big a facility and hired as many or more workers than the Nebraska company for only $1 million.  And keep all the profits here in Louisiana.  Some real troubling questions are being raised here, but so far only a blasé’ shrug of the shoulders from legislators.

And how bout them Saints?  They remain the only NFL team getting state help as legislative approval for tax dollars was given last week.   The new Saints contract is a better deal than owner Tom Benson had under Gov. Mike Foster.  State funding is direct in the amount of $6 million.  But the side deals of concessions, more luxury boxes for the Saints to sell paid for by taxpayers, garage revenue and a fully paid for office building that Benson owns and the state will lease adds up to a whopping package of some $23 million a year. But how about those 4000 jobs?  Yeah, if you want to work parking cars, and selling beer and pretzels.  It’s a bad business deal for the state.  It only makes sense if there is enough value in bragging rights of having an NFL team.

And if state dollars were not being thrown around enough, the state insurance department announced last week that all homeowners statewide could well see a significant increase in insurance rates if the state run Citizens Property Insurance Company had to pay penalties for not paying legitimate claims on time. Citizens was a creation of the insurance department and the legislature, and has proven to be the biggest financial disaster in the state’s history with losses through mismanagement exceeding $1 billion.  Kafka would find a great story line for his novels about ineptitude as would anyone who studies the Citizens fiasco.  State Treasurer John Kennedy is one of the few state officials calling for the abolishment of Citizens.  If he is successful, policyholders will have a much better shot at lower insurance rates.

Is all this too depressing?  Please do not get too worked up or to upset.  There is some good news on the horizon as the weekend approaches. LSU is a 16 1/2 point favorite over Washington. After all, we do have our priorities.

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“Money has lots of friends, hanging round the door.

When it’s gone and the spending ends, they don’t come round no more.”

          Jazz Singer Billie Holiday

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Peace and Justice

Jim Brown

Jim Brown’s weekly column appears in numerous newspapers and websites throughout the south.  To read past columns going back to 2002, go to www.jimbrownla.com.