Louisiana Progress Journal 1.1

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Louisiana Progress Journal Progressive policy ideas and analysis Louisiana Progress Initiative LPI is a new, statewide endeavor which seeks to advance progressive policies in Louisiana through careful research and analysis. Our mission is to foster a robust marketplace of progressive ideas through the dissemination of periodic reports directly to policymakers, community organizations, and concerned citizens. TABLE OF CONTENTS (Page 2) Sowing What You Reap: Toward a Progressive Fiscal Stewardship, by Daniel T. Smith (Page5) The Games We Play: College Athletics in a Recession and SB 335, by William Broussard, PhD (Page 9) Louisiana’s Alternative Energy Policy: How the ‘Bayou State’ Could Become the ‘Biomass State,’ by John W. Sutherlin, PhD (Page 17) Replacing Subsidized Sprawl with Smart Growth, by Lamar White (Page 19) Little to Show at End of Recent Louisiana Legislative Session, by Jim Brown August 2009, v.1.1 To contact, email us at LPI.inbox@gmail.com

Louisiana Progress Journal August ‘09

Welcome to the Louisiana Progress Journal! With our first edition, we share fresh ideas and analysis on current public policy debates in our state. This issue includes five original articles by progressive thinkers and practitioners with subjects ranging from unique energy alternatives to higher education and athletics. We hope you will find them interesting, thoughtprovoking, and action-inducing. The Louisiana Progress Initiative is a volunteer effort that we hope will gain steam with this and future reports and eventually lead to a new progressive policy organization here in our state. We believe that progress can best be achieved through innovation – new ideas that break from the status quo, challenge our longheld beliefs, and lead to effective solutions to the obstacles we face. Enjoy reading, and let us know what you think! - The Editors

Sowing What You Reap: Toward a Progressive Fiscal Stewardship By Daniel T. Smith The 2009 regular session of the Louisiana Legislature was dominated by efforts to bring the state budget in line with projected revenues for the new fiscal year. Although not as deep as in other states, Louisiana’s budget problems mirror growing federal deficits and the national debate over how best to rein them in. While President Obama’s long-term solution appears paradoxical—broaden short and medium-term government spending to stimulate and invest in the nation’s economic drivers—his agenda represents a sound and pragmatic approach to governance. The President recognizes that targeted investments in education, health care and energy, despite the political unpopularity of further deficit spending, are critical to restoring American prosperity and establishing a stable fiscal foundation for the future delivery of government programs and services. The return on these types of investments are much more sustainable than, say, investments in war or deep cuts in taxes. Americans are fortunate the

federal government has the ability to borrow now and bet on the future. The State of Louisiana, however, does not share in this luxury. Unless the government is willing to raise revenue, remedying shortfalls requires slashing the budget. In Louisiana, that generally means cuts to healthcare and education, areas that need expanded investment for a stable and sustainable economy in the future. The state has few alternatives as long as it has unsophisticated leaders who plan their reelection campaigns around cutting taxes at all costs. Thus, we eat the very seed corn needed to revitalize and redevelop our state, and turn our backs on the pragmatic and principled example set by our nation’s leader. As progressive advocates labored this year to reduce the impact of state budget cuts, the President’s lesson went too often unsaid: reducing the longterm threat of budget shortfalls requires bold, efficient, and evidence-based investments now, even amidst an uncertain economic climate. These investments are not only sound fiscally, they represent the ethical duty of a government to provide for the equal protection and general welfare of its citizenry. And to preserve the trust of the


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citizenry, they should be based on objective analyses of rates of return and absolutely must be absent of any influence from well-connected patrons and special interest lobbies. Progressives in Louisiana have struggled to find their voice, yet the ideals around which they should rally are already ingrained in the progressive ethos: broad and equal opportunity, responsible fiscal planning, pragmatism and ethics in governance, sound economics, and the stewardship of our human and natural resources. Progressivism as a term denotes progress, but a progress that sacrifices equality and sustainability is not progressive at all. One example of recent statewide legislation that demonstrates this ethos is the Louisiana Healthy Food Retail Act, sponsored by Senator Ann Duplessis (D-New Orleans) and Representative Rosalind Jones (D-Monroe). The new law provides grants and loans to food retailers to increase access to fresh, affordable produce and other healthy foods in under-served rural and urban communities. Even in the most agricultural rural areas and populated urban neighborhoods, only foods of limited nutritional value are sufficiently cheap and available for local consumers. The program has not yet been funded, but hopefully the state can find a way to implement it by leveraging federal, foundational, and private funding sources. A less successful example from the previous session was the Louisiana Healthier Families Act, introduced by House Speaker Pro Tempore Karen Carter Peterson (D-New Orleans), which would have raised taxes on cigarettes and other tobacco products by $0.50. An increase of $1.00 was originally proposed, but was halved just to get the bill out of committee. Once open for debate on the House floor, the bill garnered some bipartisan support, but ultimately fell far short of the 70 votes needed to send a tax increase to the State Senate. New Orleans Democrat Walt Leger III spoke clearly on the issue: “You can go with Joe Camel and the Marlboro man or you can go with the people of Louisiana” (The Advocate, June 16, 2009).

Sowing What You Reap – continued Republican Hollis Downs of Ruston went further, saying, “If I thought I could tax them out of existence, that’s what I’d do. I don’t care if we take the money, put it in a bucket and burn it.” The money would likely fill several buckets. Representative Downs is justified in emphasizing the initiative’s moral importance, given the destructive outcomes tobacco inflicts upon Louisiana. Complete elimination of the industry, however, is not the aim or likely result of such a measure, and one doesn’t have to resort to such moral extremism to appreciate the fiscal benefits it would provide. During the debate, Representative Peterson pointed out that the average Louisiana household pays $627 per year in taxes that are spent on smoking-caused health problems. Half of the revenue from the bill would have been used as match for up to $500 million in federal health care funding; the rest would be put towards tobacco cessation and cancer research. The Louisiana Campaign for Tobacco-Free Living estimates that tobacco use results in $1.47 billion annually in health care bills and kills as many as 6,400 residents in Louisiana alone. The Coalition For a Tobacco-Free Louisiana reports that smoking costs Louisiana’s Medicaid program $663 million every year, and productivity losses amount to as much as $1.91 billion statewide. The additional revenue from the tax, not to mention the substantial savings in health care, would make real progress towards investing in Louisianans and moving this state forward. Opponents of the bill smeared it as an irresponsible tax increase during difficult economic times. It would be unfair, they claimed, to increase taxes of any type on the struggling average families of our state. However, what is truly unfair is allowing an industry to evade the total financial and social costs of its products, costs that are ultimately borne on the backs of the Louisiana taxpayer. Many of these same opponents were also against banning smoking in bars and casinos, and supported the repeal of the motorcycle helmet law. Additionally, they fought


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delaying the repeal of the 2002 Stelly Tax Plan, which reduced some sales taxes and increased certain income taxes. For short-term political gain, the Stelly Tax Plan was repealed in 2007, shifting the tax burden back to more regressive sales taxes. This contributed to the instability of state revenue collection and worsened the state’s already poor bond rating. Low-income citizens’ paychecks, the true value of which has fallen for decades in spite of rising productivity, don’t go as far as they used to. As quality of life diminishes, the burden on government coffers expands. Progressive calls to delay the repeal were met with the closed ears of so-called fiscal conservatives. The state leadership suffers from failing to acknowledge the potential revenue and hidden costs of certain market and fiscal externalities, which become manifest only over the long term. On the one hand, the opportunity cost of not collecting greater taxes on something like tobacco use—which the market would almost certainly bear—is great. On the other hand, the accrued cost to the system over time of such easily deterred and preventable health care expenditures—which exist currently as a non-priced market externality—is substantial. Looking back to the Healthy Food Retail Act, one again finds advantages to a progressive fiscal approach. While the tobacco tax would create a stick to deter behavior that quietly burdens the overall system, this initiative provides a carrot to incentivize behavior that benefits the system. There exists an economic obstacle—a gap in financing—to the profitability of providing healthful foods in some rural and urban markets. This obstacle contributes to the external, unacknowledged costs of these products not being accessible to all citizens, which include health care expenditures related to obesity, hypertension, and diabetes.

Sowing What You Reap – continued inequities and wastefulness of sprawl development. Wise state and local governments expand workforce and small business initiatives to incubate entrepreneurs and attract the emerging industries (such as alternative energy, clean tech, the creative class and the knowledge-based economy) that will comprise the sustainable, diverse economies of the future. Health-care costs continue to escalate without the access to preventative care and affordable, appropriate treatments necessary for a healthy population. Louisiana will continue to lag as long as wage disparity and a poorly-funded education system inhibit entrepreneurship and the expansion of its base. Many of our leaders deeply understand these issues, and most lack nothing more than the courage to stand behind difficult decisions that take years and decades to bear fruit. Good farmers are not preoccupied with the weather; they are concerned with working hard enough to reap a good yield. Genuine statesmen do not obsess over whether the political climate is ideal for their reforms to take root; they fear only lacking the commitment and character to speak truth to power. In seasons of poor harvest, when so many fields appear infertile and so many lay fallow, they know one must never, never eat the seed corn.

After graduating from Rice University in 2005, Daniel has lived in New Orleans and taught English to Tibetans in Sichuan, China. He currently works in economic development and planning in his hometown of Alexandria, Louisiana.

This kind of progressive approach to responsible fiscal stewardship applies to all levels of government. Prudent local leaders reinvest in urban infrastructure to more efficiently provide services and mitigate the


Louisiana Progress Journal August ‘09

The Games We Play: College Athletics in a Recession and SB 335 By William Broussard, PhD Across the state known as the “Sportsman’s Paradise” the face of college athletics is changing drastically. Unfortunately, due to an overwhelming “no” vote of 69-34 in the House of Representatives on SB 335 in the 2009 legislative session, it’s changing for the worst. Debate over SB 335 and the Game the House Played Governor Bobby Jindal’s posturing (and rumored preparation for a presidential run in 2012) about refusing federal stimulus funding, and GOP house legislators’ decision to not even vote on SB 335 at first, which would have nearly halved the proposed $220 million cuts to higher education in the state, have placed the state’s institutions in a perilous predicament. Whereas in most parts of the country, state legislators pride themselves in their funding of higher education, in Louisiana, adequately funding higher education is widely considered wasteful spending. According to the bill, SB 335, authored by Sen. Lydia Jackson, District 39, “Retains the deduction for excess federal itemized personal deduction at 65% for 2009, 2010, and 2011; provides a 100% deduction on and after January 1, 2012” (http://www.legis.state.la.us/billdata/). The delay of the restoration of this tax deduction would not institute any new taxes, and the revenue generated by it would be placed in a fund for higher education. Early projections predicted that SB 335 would effectively halve Governor Bobby Jindal’s projected cuts of $220 million1.

The bill easily passed in the Senate 29-9, with bipartisan support. According to LSU-S Political Science professor Jeff Sadow, Democrats Joel Chaisson (Senate President) and Jody Amedee and Republicans Buddy Shaw and Mike Michot (Senate Budget Chairman) endorsed the bill, noting that it would give institutions of higher education time to reform without completely forfeiting progress in recent years (http://laleglog.blogspot.com/). Additionally major state publications including the Times Picayune in New Orleans, the Monroe News Star, the Shreveport Times and Baton Rouge's Advocate all endorsed SB 335 alongside the Council for a Better Louisiana, Blueprint Louisiana, and the CEO's of three Fortune 500 companies headquartered in Louisiana2. Nonetheless, Governor Jindal vowed to do whatever was necessary to kill SB 335, from the start, and eventually used “rainy day” funds to lessen the severity of the cuts. While SB 335 would provide a temporary solution, three years is enough time for the state’s universities to eliminate redundancies and develop strategies for long term solvency and growth with the aid of the Tucker Commission. “Rainy day” funds would only be a one-time salve, thought by most economists to be unsound fiscal policy. Even his Lieutenant Governor, Mitch Landrieu, disagreed with him, stating, "If Louisiana is going to be a competitor in the 21st century, we have to prepare our students for a knowledge-based economy3," which cannot happen with debilitating cuts to higher education. House Republicans, for the most part, followed suit and did the governor’s dirty work for him, at the behest of their titular leader, Louisiana GOP Chair Roger Villere. In essentially a party line vote, every Republican in the House with the exception of Hollis Downs (of Ruston, who also sits on the Education 2


According to a May 31st Times Picayune editorial, the projected amount of revenue from SB 335 would be $118 million (http://blog.nola.com/editorials/2009/05/louisiana_legislat ure_and_gov.html).

See http://www.2theadvocate.com/blogs/politicsblog/4667630 7.html. 3 “Lt. Governor Landrieu Applauds Senate Efforts for Higher Education.” http://www.ltgov.la.gov/index.cfm?md=newsroom&tmp=d etail&articleID=152


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Committee) and Ernest Wooton (of Belle Chasse, graduate of Northwestern State, and well-known opponent of Bobby Jindal’s policies who has challenged the leadership of GOP Chair Roger Villere4) voted down SB 335 (http://ultoday.com/node/685). The reason for the party line vote appears to be less about the good of the State and its future and more about partisan politics, according to a recent admission by Roger Villere via press release, in which he states: “I have heard the suggestion today that we allow as many Democrats as possible to vote for this tax increase and then wrap it around their necks at re-election time […] I certainly plan to do so […] I am calling on all Republican voters to contact their state senators immediately and urge them to vote NO on SB 335.” Roger Villere, http://www.lanewslink.com/archive s.php?id=11291 The vote seemed to hinge on opportunistic election politics – an opportunity to cast Democrats in the “tax and spend” light. Rep. Kirk Talbot, River Ridge, claimed that the most recent round of cuts would be in response to the nation’s third fastest growing rate of spending for higher education; he leaves out that the increased spending barely got University of Louisiana System schools above the Southern average for higher education funding (it will now return below that average, if that will help House Republicans sleep more easily). The dramatic increases in spending were to get Louisiana higher education out of the bottom ten percentile of postsecondary funding monies in the country, but any increase in spending – no matter how justified or prudent – can be spun as Democratic malfeasance in election politics.


See “GOP Official Urged to Quit,” Advocate Capital News Bureau (http://www.lapar.org/PAR%20News%20Files/advocate_05.06.2009.pdf) .

The Games We Play – continued This was also the tack taken by focus groups such as The Louisiana Young Republicans and Louisiana Family Forum, citing in their talking points their opposition to “raising taxes” on “working families,” soundbites seemingly lifted from a Talking Points Memo rather than ones applicable to SB 335. While those who supported SB 335 in the House voted as Louisianans, the vocal opposition seemed much more interested in voting as Republicans. Clearly, the gamesmanship involved with waging a national political party’s struggle on local soil is wrought with hazard. The New Face of College Athletics in Louisiana And now for the games that we used to play, and in some cases, may never play again. At the University of New Orleans, students voted down a referendum to establish a student fee to underwrite the costs of operating their Division I athletic program after the university administered deep budget cuts that would effectively end their athletics program. As a result, their program is in limbo, as university-wide budget cuts will likely finish the job Hurricane Katrina started and eliminate Privateer athletics indefinitely (and perhaps permanently). At Southeastern Louisiana (Hammond), they have eliminated the men’s tennis program, impacting ten student-athletes on scholarship. Their tennis program won the Southland Conference championship as recently as 2006. Nicholls State (Thibodaux) and McNeese State (Lake Charles) will face substantial NCAA penalties due to poor performances in the APR (Academic Progress Rate) reviews, and because of widespread budget cuts, their departments will struggle more than ever to expand their academic services and support for student-athletes. On the plus side, the reduction of scholarships associated with APR penalties (Nicholls will lose scholarships in 6 sports, McNeese in 8


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sports) will help their budgets, but their coaches and administrators would much rather not have such a problem. At the University of Louisiana-Monroe, President Jim Cofer has been forced to cut the student fee allotment to athletics, and University of LouisianaLafayette President Joe Savoie has cut the budget by hundreds of thousands of dollars, as well, during mid-year cuts alone5. Those cuts will likely increase as a result of the more drastic cuts that the recent legislative session instituted.

The Games We Play – continued higher education in the state is to be judged, at least partially, by the state of its collegiate athletic programs (save for the state’s flagship, largely immune to budgetary problems because of overflowing private donations) then Louisiana Higher Education’s front porch will need much more than a good sweeping around before it resembles a gateway to a stately mansion. Now, we aren’t talking about less than immaculate front porches as gateways to mansions, but dilapidated front porches which lead to shotgun houses.

In a state whose institutions operate among the College Athletics in Louisiana: Not Just lowest budgets in Division I athletics in Fun and Games the country, these budget cuts are not “trimming fat.” They aren’t Athletics is not only the front even trimming meat. We’re porch to a university, and its talking about trimming bone importance is more than from bone, and perhaps “Successful athletics nominal to the cities and even extracting marrow. regions in which they are programs spur community located. Successful Granted, I will be among involvement and investment athletics programs spur the first to admit that community involvement athletics is not the most in universities and pump and investment in crucial concern in higher money into local economies.” universities and pump education. Frankly, money into local Governor Blanco’s decision economies. to use surplus funds to raise the University of Louisiana Among my most treasured System’s funding of its member memories in my time as a institutions in 2008 to 5%+ of the student-athlete at Northwestern Southern Regional Education Board State is the fall of 1998, when the entire (SREB) average was a much more important City of Natchitoches rallied around the success of the decision than any university has ever made to raise a university’s football team. The citizens and students head football coach’s pay. And the work that packed the stadium on the weekends, and it seemed student-athletes perform in their classrooms and that the entire city was awash with purple and white communities outweigh the importance of the (and not gold, for a change). Furthermore, the three decisions they make on the field and on the court extra Saturdays of home football games were a boon many times over. to the local and regional economy (anyone needing evidence of this should read the a recently released However, as Hall of Fame basketball coach Dean regional economic report which states that Smith famously quipped, athletics is often Northwestern State’s impact on the state’s economy considered “the front porch of the Academy,” and if 5

“ULL Trims Budget.” http://www.2theadvocate.com/news/37252504.html.


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is $365 million annually6, of which athletics accounts for nearly 15%). The next year, enrollment applications at the university increased substantially, as they did in 2006 when Northwestern State beat Iowa in the NCAA Basketball Tournament. Given that athletics offers Northwestern State and the City of Natchitoches so much to be proud of, provides so much service to the local community (NSU studentathletes provide more than 2,000 hours of community service hours every year), one thing is certain: Budget cuts to Northwestern State University and to Demon and Lady Demon Athletics hurt Natchitoches. And cuts to athletic programs across the state will hurt communities across the state.

Dr. Broussard is Assistant Athletic Director for External Relations at Northwestern State University and holds a Ph.D. from the University of Arizona. State funding per full-time, fouryear college student, 2006:

So while Demon and Lady Demon Athletics makes no plans to cut scholarships to deserving studentathletes, cut teams, switch divisions, or make any other drastic changes to its plans to accommodate the impending budget cuts, it also means that Demon and Lady Demon Athletics will struggle to grow, and the City of Natchitoches and surrounding region along with it. And so will Northwestern State’s plans to better and more comprehensively serve and represent NSU, the City of Natchitoches, and north central Louisiana.

$12,327 Southern average $9,002 Louisiana (last in the South)

Athletics are often cast as fun and games – diversions from the everyday problems that we face. However, the cuts that were recently imposed on higher education in the State of Louisiana and the failure to approve SB 335 in the House were no laughing matter.

54% U.S. average 52% Southern regional average 36% Louisiana

First-year college retention rates: 84% Southern average 78% Louisiana College students graduating within 6 years:

Source: Baton Rouge Advocate

In the end, the failed passage of this bill may prove to be, literally, an act of poor sportsmanship.


Reports available at http://www.ulsystem.net/assets/images/impact/uls_report_ 415.pdf.


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Louisiana’s Alternative Energy Policy: How the ‘Bayou State’ Could Become the ‘Biomass State’ By John W. Sutherlin, PhD Introduction. Louisiana ranks among the largest oil and natural gas-producing states in the US and has for many years (See Figure below). As almost anyone in the state knows, when Jules Clement of the small town of Jennings noticed gas bubbles on his property, the race was on to develop (and profit from) the first well. Texas wildcatters would descend on this small community almost overnight. This well would begin producing on September 21, 1901, and a new era of economics and politics began. According to the Louisiana Oil and Gas Association (LOGA), within a

decade Louisiana would discover natural gas near Shreveport and build a refinery that would take oil from across the state through an ever increasing complex network of pipelines. According to a Minerals Law Institute publication, Louisiana has drilled almost a quarter of a million wells (Cusimano and French, 2003). Since Louisiana has a tremendous offshore oil sector, it remains a major player in the oil industry and increasingly the refining sector (See Figure 2 below). As Crouch (2007) demonstrates, Louisiana’s peak production years were in the early 1970s. As for the national trends, Baker Hughes (a Houston based company) has been tracking the number of rigs since 1944. A recent count shows that nationally the year 1981 was the peak (more than 4,500 active rigs) and there has been a remarkable decline ever since to the present (less than 1,000 active rigs).

Figure 1. Louisiana Department of Natural Resources, Technology Assessment, Crude Oil Production Ranking


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Figure 2. Louisiana Department of Natural Resources, Technology Assessment, Production vs. Refining Capacity

These changes are in large part attributable to national efforts at conservation and extension of environmental standards to those in the oil and gas sectors. In some ways, the efforts to ensure compliance with an environmental regime have progressed to better manage groundwater, drinking water and surface water (Rosenbaum 1998). For states like Louisiana, so heavily dependent upon the oil and gas sectors, times have become more difficult economically. These difficulties are only exacerbated due to a lack of a comprehensive energy policy for the state.

National Issues. When prices for gasoline began to spike in 2008, where they eventually topped $4 per gallon at the pump (this stemmed from $140-plus per barrel of oil), there was a renewed interest in non-fossil or alternative fuels, such as solar, wind or biomass (i.e., making fuel from plants or wood debris). As some have suggested, the trend, if this can be called a trend, in the future pricing of oil is volatility (Mouawad 2009). Couple the so-called ‘go green’ movement with the apocalyptic doom associated with those claiming the world would soon run dry


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(Goodstein 2004; and Roberts 2004), Louisiana would appear to need to adjust, if it could, to the new rules of a greener game. However, alternative fuels are dependent on higher prices for traditional fuels (i.e., oil and gas) and price supports to level the distribution playing field (Davis 1993). And, to be fair, while many environmentalists, conservationists or those simply wanting to be less reliant upon traditional means would turn to alternative fuel sources, the vast majority of energy consumers will only switch if there is no perceived disruptions to level of service and for a better price (Pearce and Turner 1990). Still, there is considerable debate on the actual ‘costs’ of relying upon fossil fuels that are non-market driven, such as contributing to climate change or depending on hostile Middle Eastern states for energy (Grafton et al. 2004). But, for Louisiana, what does all this mean? Louisiana’s Energy Structure. Managing the oil and gas sectors in Louisiana seems like a straight enough proposition, that is until one tries to meander through the state’s constitution and the array of agencies and commissions charged with administering certain aspects of the industry. This is important because if Louisiana is to develop an alternative energy sector, then having an energy structure will be essential. During the fiscal legislative session in 2009, much of the budgetary pain felt by all people in Louisiana had to do with relatively low prices for oil and natural gas over the previous year’s sky-high prices. The conundrum is that in order for Louisiana to recover, the rest of the nation must shoulder the burden of high energy costs (Alford 2009). Many bemoaned the fact that despite the immense pressures on Louisiana, the 2009 legislative session felt short with few solutions (PAR 2009). Bureaucracies. First, the bureaucracies will be considered. The Louisiana Department of Natural Resources (LDNR) was created in 1976 (R.S. 36:351) “to preserve and enhance the nonrenewable natural resources of the state, consisting of land, water, oil,

Louisiana: ‘Biomass State’ – continued gas, and other minerals, through conservation, regulation, and management/exploitation, to ensure that the state of Louisiana realizes appropriate economic benefit from its asset base.” Specifically, the LDNR Office of Mineral Resources is charged with overseeing this enormous sector. The person who heads this agency is appointed by the Governor. But, as many things are in the Bayou state, overlapping political offices are sometimes created to encourage patronage over sound policy-making. In Article IV, Section 10 of the Louisiana Constitution, the Department of Agriculture and Forestry (LDAF) was created and is directed by a Commissioner popularly elected from a statewide campaign run at the same time as the Governor’s race. The Commissioner is charged with, inter alia, promote and protect agriculture and forestry (Office of Forestry) and has primacy over rural community development. Further, The LDAF has an Office of Marketing and Agro-Economic Development specifically charged “to promote the development and growth of markets for Louisiana agricultural and forestry products and to develop the channels of distribution through which these products are sold.” Now, add to this bureaucratic mixture the Louisiana Department of Environmental Quality (LDEQ). This agency has struggled for legitimacy as it was branched off the LDNR in the mid-1980s. Originally, the LDEQ was “envisioned to manage all environmental concerns.” According to their website, “the initial argument was whether areas such as wildlife and fisheries, parks and recreation, wetlands, scenic streams, litter control, drinking water, and agriculture and forestry were considered environmental management areas.” Most of these areas remained with other departments and this has resulted in past clashes between agencies where both LDNR and LDEQ administrators are appointed by the same Governor, but are pursuing different agendas, often because of federal mandates. Finally, the Louisiana Department of Transportation and Development (LDOTD) has the duty to oversee massive public works projects and, obviously, road usage. They would have to become involved for any


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energy project that intended on using Louisiana’s roads, bridges and waterways. Executive Branch. Next, the Executive Branch of state government will be reviewed. There are actually two entities within this structure that can impact energy policy in Louisiana: the Governor and the Public Service Commission (PSC). Clearly the Governor sets an agenda to lead that goes beyond his (or her) articulated duties and responsibilities as found in the Constitution. One aspect would include cabinet appointments. If the Governor selects a person to serve as, for example, administrator of LDNR with a strong background in renewable fuels or alternative fuels, then that sends a strong signal to the Legislature to pass ‘green’ legislation. On the other hand, appointing a pro-oil and gas person to head LDEQ does just the opposite. Yet, the Governor can develop an agenda through Louisiana Economic Development that invests in new technologies or new companies. On the other hand, the Governor may develop a task force charged with reviewing the issue, or sign an executive order encouraging citizens, businesses and government agencies to ‘go green’ or reduce their carbon footprints. Often these measures are purely political and have little long-term merit. Consider, for example, that Governor Mike Foster issued an executive order on October 25, 2001 (followed by several others that supported the original one) that established the Louisiana Comprehensive Energy Policy Advisory Commission. The charge for this Commission was that it “shall review existing state energy policies and shall develop recommendations for a comprehensive energy policy for the state of Louisiana.” In doing such, its focus would primarily be on the oil and gas sectors, but it would also “determine the feasibility of the state constructing, or encouraging the construction of electrical cogeneration facilities to increase the supply of electricity and reduce its cost” and “review efforts by the federal government to implement a national energy policy and recommend ways that Louisiana can influence and participate in that plan to benefit the citizens of Louisiana and the nation.” Needless to say, this effort failed to

Louisiana: ‘Biomass State’ – continued produce a viable energy policy for the state, and only resulted in a couple of tax credits for the existing oil and gas sectors. When one moves into the present, with so many alternative energy technologies being promoted (many with limited scientific justification), the need for such is overwhelming. Yet, the PSC has significant input into this process. According to Article IV, Section 21, subpart B, the PSC “shall regulate all common carriers and public utilities and have such other regulatory authority as provided by law. It shall adopt and enforce reasonable rules, regulations, and procedures necessary for the discharge of its duties, and shall have other powers and perform other duties as provided by law.” This means that the PSC can set policy regarding electricity generation, usage and pricing across the state. The PSC is made up of five (5) Commissioners elected in districts almost as big as Congressional ones. Thus, these Commissioners wield massive power. This may help explain why some previous Governors (Huey P. Long) and those wanting to become Governor (Foster Campbell) have gone this route. In 2007, the PSC developed a pilot program with Entergy Gulf States based on a voluntary green pricing tariff (GPT) program. This program was entitled ‘Geaux Green’ (See Figure 3). The idea here was to encourage citizens and businesses to voluntarily pay higher fees to offset future costs of greener or alternative energy. This was done through the use of radio, television, billboards, bill inserts and internet advertising in the Lafayette and Lake Charles markets. Despite months of publicity, millions of dollars and massive commitments from private businesses, barely 1,000 people expressed any interest whatsoever. The long-term viability of this program and others like this remains doubtful.

Figure 3. The PSC Advertisement for the Geaux Green Campaign


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The Legislature. Like all other states, except Nebraska, Louisiana has a House and a Senate. In each chamber, standing committees represent the continuing issues that are important to the state. On the House side, there is one committee that directs energy policy now that the natural resources and environmental committees have been collapsed. The Natural Resources and Environment Committee reviews all bills on matters of minerals management, natural resources generally and materials that travel through pipelines. What is striking is that this committee has no direct responsibility for alternative energy or renewable fuels. In the Senate, the same set of issues is dealt with, except the upper house has been able to hold onto the Environmental Quality Committee as a separate entity.

Louisiana: ‘Biomass State’ – continued researching to find the optimal solution or solutions for a given area. Solar. For example, those states in the southwest, such as Arizona or New Mexico, have ample sunlight compared with northwestern states, such as Oregon or Washington; therefore, the former have a technical and economic justification for pursuing solar power over the latter. Yet, even in the former states, natural gas is still cheaper to exploit than solar power (MMS 2006). Louisiana does not have a sufficient number of sunny days to support a solar only solution. But this would not preclude solar power from being a partial way out of the energy malaise.

On the other hand, several legislators, especially State Senators, have taken the lead on alternative energy and renewable fuels development. While this seems at first glance unlikely, this may be the best place for energy policy to be constituted. Senators Gerald Long and Nick Gautreaux emerged as savvy green politicians through a series of resolutions and bills offered to support various portions of a total energy package for Louisiana. This is not to suggest that Louisiana (nor the nation) will at anytime soon rely mainly on energy from sources other than fossil-fuel based. Market pressures will circumvent any efforts to push ‘King Oil’ off its throne. Before analyzing their efforts, a reasonable attempt will be made to determine Figure 4. American Wind Energy Association, Optimal Wind Locations which of the major alternative sources of energy Wind. This brings the discussion to wind power or are most desirable for Louisiana. turbines. According to the American Wind Energy Association (See Figure 4), the optimal locations (as Louisiana’s Alternatives. represented in the darker colors) are in the mountain states, such as Idaho and Colorado. The major technologies that will be considered here Louisiana, as well as all other Gulf South states, is are solar, wind and biomass. Within the scientific among the least favorable for wind development. In community, there is much agreement that the other words, Louisiana does not have the average developed world has many more decades to go wind speed necessary for energy production through before we run out of oil or natural gas (Dresselhaus the use of a wind turbine. and Thomas 2001). On the other hand, experience has taught us one thing: ignoring an issue does not eliminate it. Thus, the present and future generations will spend much time and money

As early as 1981, experts had dismissed Louisiana’s potential for accessing wind power (French 1981). But, Louisiana does have access to areas that do


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have sufficient wind speeds: the outer continental shelf. Louisiana may be able to exploit winds off its coast to develop power (See Figure 5). There are clearly huge costs for building turbines and recovering any power generated offshore. Still, this may be an area worthy of review although it could only be part of any total energy policy for the State of Louisiana. A recent study demonstrates that states with a strong energy policy, such as those with renewable portfolio standards (RPS) and mandatory green power options, positively correlate with wind power development on a state level (Menz and Vachon 2006). However, these RPS states are almost entirely located in those areas where wind power is optimal. Still, Louisiana may be able to use the same offshore infrastructure for any wind power project on the OCS (Crouch 2004). Biomass. Over the past several years, there has been a plethora of studies and articles published on the subject of converting biomass to energy. Clearly,

Figure 6. Louisiana’s (Non-food Crop) Biomass

Louisiana: ‘Biomass State’ – continued

Figure 5. Louisiana’s OCS Wind Potential

the focus has been on ethanol from corn and/or sugarcane. Whether in the US or Brazil, who is often considered a world leader in this sector, unreported subsidies (Pimentel and Patzek 2007), excess and unsustainable waste or residual production (Braunbeck et al. 1999), and sustainable crop production (Smeets et al. 2008) have called into question the reliance upon corn or sugarcane for long-term energy independence. On the other hand, biomass-to-energy projects that depend on non-food crops, such as switch grass or wood, increasingly appear more exciting. While there is still considerable debate about the overall ability for biomass to discharge oil or natural gas as the fuel of the future (Berndes 2003), whether abandoned landfills contain sufficient quantities of biomass (McKendry 2002), or if pyrolysis of wood is best for all wood types


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(Mohan, Pittman and Steele 2006), the verdict so far is rather good for biomass.

Louisiana: ‘Biomass State’ – continued Conclusions.

Louisiana has an enormous biomass supply located in that part of the state where oil and gas, especially the OCS sector, are less prevalent (See Figure 6 above). Thus, the potential for Louisiana to become a significant player in the emerging biomass-toenergy industry is great. What is lacking is the governance structure together with leadership. Recent Legislation. As stated earlier, Senators Long and Gautreaux took major steps in addressing the state’s inadequate energy system. First, Senator Long authored a resolution to develop a Wood Products Development Foundation, to encourage the creation of electricity from woody biomass. On a more substantial cord, Senator Gautreaux offered several more bills in this session to ensure that he remains the ‘greenest politician’ in Louisiana. In the 2007 session, Senator Gautreaux secured the passage of Act 271, which provides a state tax credit for wind and solar energy systems, up to fifty percent of the total cost, but not to exceed $12,500. Not long afterwards, Gautreaux was named the ‘father of the Louisiana solar industry’ by the Louisiana Clean-Tech Network. In the 2009 session, he followed this with efforts to push for biomass to have the same tax credits as solar and wind, but this effort eventually got bogged down in a conference committee. Further, he added legislation to allow tax credits for those purchasing clean burning autos, including those using compressed natural gas.

Louisiana does not at present have the bureaucratic, political or regulatory structure needed to become the ‘Biomass State’. However, that issue may be addressed with continued pressure from the Legislature and a Governor willing to use some of his political capital to develop an enduring commitment to energy policy. Perhaps legislation authorizing a state agency (i.e., LDNR or LDAF) as the central authority would be a step in the right direction. Undoubtedly, there is a passion for biomass on local levels unlike anything found with either solar or wind power (Estill 2005). Louisiana must find progressive leaders willing to capture that enthusiasm and harness that power for change. If not, then years from now, Louisiana will look back and shake its head bewailing its lost opportunity to become a progressive energy state.

Dr. Sutherlin is an Assistant Professor of political science and Co-Director of the Social Science Research Laboratory (SSRL) at the University of Louisiana at Monroe.

On another note, there was also legislation looking to monitor the biomass industry where all such funding through state or federal incentives would be handled through the LDAF, but the Governor’s Office pressed to have the head of LED be a coadministrator on such matters. This additional layer of bureaucracy from another appointed position (answerable to another state-wide office) appears to be an extra layer too many.


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Bibliography (Sutherlin)

Hempel, Lamont C. 1996. Environmental Governance: The Global Challenge. Washington, DC: Island Press.

Alford, Jeremy. 2009. “Will Oil Save the Day?” Baton Rouge Business Report, June 30. American Wind Energy Association. 2009. Optimal wind power locations. http://www.awea.org/faq/usresource.html. Angelini, Luciana G. et al. 2009. “Long-term evaluation of biomass production and quality of two cardoon (Cynara cardunculus L.) cultivars for energy use,” Biomass and Bioenergy, 33 (5): 810-816. Berndes, Göran, Monique Hoogwijk and Richard van den Broek. 2003. “The contribution of biomass in the future global energy supply: a review of 17 studies,” Biomass and Bioenergy, 25(1): 128.

Louisiana Department of Agriculture and Forestry. 2009. http://www.ldaf.state.la.us. Louisiana Department of Environmental Quality. 2009. http://www.deq.louisiana.gov. Louisiana Department of Natural Resources. 2009. http://dnr.louisiana.gov. Louisiana Department of Transportation and Development. 2009. http://www.dotd.louisiana.gov. Louisiana Division of Administration (Governor’s Office). 2009. http://doa.louisiana.gov.

Braunbeck, O. et al. 1999. “Prospects for green cane harvesting and cane residue use in Brazil,” Biomass and Bioenergy, 17 (6): 495-506.

Louisiana Oil and Gas Association. 2009. http://www.loga.la.

Connelly, James and Graham Smith. 1999. Politics of the Environment: From Theory to Practice. London: Routledge Press.

McKendry, Peter. 2002. “Energy production from biomass (part 1): overview of biomass,” Bioresource Technology, 83 (1): 37-46.

Crouch, Bryan. 2004. Offshore Louisiana Wind Power. Baton Rouge: Department of Natural Resources, Technology Assessment Division.

Minerals Management Service. 2006. “Technology White Paper on Solar Energy Potential on the U.S. Outer Continental Shelf,” available at http://ocsenergy.anl.gov.

________. 2007. Louisiana Crude Oil Refinery Survey Report, th 16 ed. Baton Rouge: Department of Natural Resources, Technology Assessment Division.

Mohan, Dinesh and Charles U. Pittman, Jr., and Philip H. Steele. 2006. “Pyrolysis of Wood/Biomass for Bio-oil: A Critical Review,” Energy Fuels, 20 (3): 848–889.

Cusimano, Charles V and T. Michael French. 2003. Developing a th Louisiana Energy Policy. Baton Rouge: LSU Law Center, 50 Mineral Law Institute.

Mouawad, Jad. 2009. “One Year after Oil’s Price Peak: Volatility,” Green, Inc, Blog (New York Times). July 10. http://greeninc.blogs.nytimes.com.


Davis, David H. 1993. Energy Politics, 4 ed. New York: St. Martin’s Press. Dresselhaus, M. S. and I. L. Thomas. 2001. “Overview Alternative Energy Technologies,” Nature, 414(15): 332-337. Estill, Lyle. 2005. Biodiesel Power. Gabriola Island (Canada): New Society Publishers. French, Mike. 1981. Evaluating Wind Energy Potential in Louisiana. Baton Rouge: Louisiana Department of Natural Resources, Research and Development Division. Goodstein, David. 2004. Out of Gas: The End of the Age of Oil. New York: W.W. Norton. Grafton, R. Quentin et al. 2004. The Economics of the Environment and Natural Resources. Oxford: Blackwell Publishing.

Louisiana Public Service Commission. 2009. http://www.lpsc.org.

Pearce, David W. and R. Kerry Turner. 1990. Economics of Natural Resources and the Environment. Baltimore: The Johns Hopkins University Press. Pimentel, David and Tad Patzek. 2007. “Ethanol Production: Energy and Economic Issues Related to U.S. and Brazilian Sugarcane,” Natural Resources Research, 16 (3): 235-242. Public Affairs Research Council of Louisiana. 2009. “Short Session, Short on Ideas,” Commentaries. June 26. http://www.la-par.org/. Roberts, Paul. 2004. The End of Oil: On the Edge of a Perilous New World. New York: Houghton Mifflin. Rosenbaum, Walter A. 1998. Environmental Politics and Policy, th 4 ed. Washington, DC: Congressional Quarterly.


Louisiana Progress Journal August ‘09

Replacing Subsidized Sprawl with Smart Growth By Lamar White Eleven years ago, the voters of my hometown of Alexandria went to the polls and approved a 5-mill property tax to construct a multi-million dollar sports facility: a new golf course, baseball diamonds, and soccer fields. Considering Alexandria’s location in the center of Louisiana, we have always been a leading contender for statewide sports tournaments. The new facility, as logic had it, would not only increase our competitiveness, it would also provide local families with a world-class venue for Little League baseball and youth soccer. The golf course, Links on the Bayou, opened for business in February of 2002, and the adjacent sports complex, named after the late Alexandria City Councilman Johnny Downs, was completed a little more than a year later. It’s a beautiful facility. The golf course was just named by Golf Digest as the best municipal golf course in the State of Louisiana, and the Little League fields, as expected, have attracted regional and statewide tournaments. There is only one problem: There isn’t a single kid in the entire City of Alexandria who can walk or ride their bike to Johnny Downs. Instead of building the facility in the City’s core, the complex was constructed on the very edge of town, along Louisiana Highway 28, Alexandria’s so-called “growth corridor.” A couple of years after the golf course opened, a private developer built a winding subdivision that hugs around the course’s fairways and greens, all new construction that starts at around $250,000. Today, like many other new residential developments in the country, the subdivision sits incomplete, a scattering of three and four bedroom homes in a corn field with very little curb appeal and minimal landscaping. Of course, hindsight is 20/20, and ten years ago,

when these decisions were being made, not many people could have predicted the ways in which the machinery of sprawl development would eventually grind our entire economy to a halt. Planning expert Arthur C. Nelson predicts that by the year 2025, America will have a surplus of more than 22 million large lot single-family homes. His assumptions, which are shared by many others in the field, are based on demographic, lifestyle, and economic changes. Increasingly, Americans are choosing to live closer to basic resources; the definition of the American Dream – a home in the suburbs with a big backyard and a three car garage – is changing. It may sound counter-intuitive to some, but the more transient Americans have become, the more inclined they are to live in a city or town with a definable sense of place. Fifty years of sprawl development have resulted in what James Howard Kunstler calls “places that are not worth caring for,” also referred to as Anywhere, USA. The solutions are not simple or easy and must begin with acknowledging the root of the problem. Sprawl development was not merely the result of the whims and desires of the private sector. I’ve met some smart people who, for whatever reason, refuse to admit that the haphazardly planned cul-de-sac subdivisions on the edges of town would have never been built had they not been subsidized by our tax dollars. When the government decides to reinvest in downtowns and inner cities, these same people are usually the first to decry the expenditures as waste, without any recognition that the roads and utility lines that stretch out to their homes were also built with tax dollars. And in many communities, like Alexandria, it’s not simply roads and utilities; it’s also golf courses, sports complexes, parks, libraries, and fire stations. In Alexandria, we have spent hundreds of millions of dollars on new infrastructure during the past forty years, expanding from 9 square miles in 1960 to our current 27 square mile footprint, without any significant increase in population. We have literally


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spread ourselves thin. Every dollar that we have spent building up sprawl represents a dollar not spent in existing, inner-city neighborhoods. While downtowns died, we subsidized new Wal-Mart stores on the fringes. While roads and bridges crumbled in the inner-city, we built shiny four-lane roadways to the newest neighborhoods in the newest areas. We didn’t simply invest in sprawl; we actively disinvested from our downtowns and our inner cities. As we move forward in this new economy, an economy scarred and bruised by the housing collapse, we must actively reinvest in our downtowns and inner cities. We must build back our infrastructure. We must commit to spending our tax dollars wisely. And, instead of “Instead of subsidizing subsidizing sprawl, we must invest in sprawl, we must invest existing in existing communities – communities – places places where people actually live where people actually and work.

live and work.”

At the same time, we must prepare ourselves for the shock that could occur if Arthur C. Nelson is right: 22 million large lot single-family homes sitting vacant in every corner of our country. If we do not act responsibly, those manicured cul-de-sac neighborhoods will eventually become the blight that we bequeath to our children. If we are not proactive, twenty years from now, we could be facing the same problem we’re facing today, except it will be known as “suburban blight” and not “suburban flight.” No, this does not mean we must spend beyond our means. It simply means that when we do spend money on infrastructure, we should insist on sustainability and safety.

Smart Growth – continued South. In Alexandria, we’re tapping into our bonding capacity, without any need for new taxes, to invest nearly $100 million in the areas that need it most, leveraging our own money with state and federal funding. We’re building back our roads and bridges; we’re investing in increased police and fire protection; we’re enhancing walkability and bikeability; and we’re improving existing parks and recreation facilities. To be sure, not every city is in the same position as Alexandria. Indeed, for some, reinvestment may require additional taxes or cuts in spending for other programs. But ignoring the problem now will only cost more in the long-term, and in twenty years from now, we won’t be able to say, “No one saw this coming.”

Lamar White, Jr. is the author of CenLamar.com, a native of Alexandria, and a graduate of Rice University. For more on “smart growth,” check out the upcoming 2009 Smart Growth Summit at www.planningexcellence.org. The theme for the summit is “Creating Complete Communities.” It will be held August 27 and 28 at the Shaw Center for the Arts in downtown Baton Rouge. The Smart Growth Summit has become the premier event for promoting quality planning and design in Louisiana.

I use Alexandria as an example only because I know Alexandria, and I also know that Alexandria is not too different than many other cities in the American


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Little to Show at End of Recent Louisiana Legislative Session By Jim Brown “This is the way the world ends/Not with a bang but a whimper,” wrote T.S. Eliot in the closing couplet of “The Hollow Men.” The British poet could have said the same thing about the recent gathering of the Louisiana Legislature. For all practical purposes, it was a do-nothing session that punted on the opportunity to address numerous stumbling blocks that have held the state back for decades. Many legislative observers had high hopes for the sixty day Baton Rouge assembly. By all accounts, the new Governor and legislators that were elected in 2007 got off to a rocky start last year, with any chance of major reform being scuttled by the pay raise controversy that engulfed and polarized the legislative agenda. Rumors of Governor Bobby Jindal being in the hunt for the vice presidential nomination also served as a major distraction. 2009 was the year to “get back on track” with emphasis on master planning and reorganization in the areas of health care, education, and economic development. But it just didn’t happen. Newspapers across the state panned both the efforts and the results of the Governor and the legislature. The New Orleans Times-Picayune headlined: "Legislative Session a missed Opportunity." The Lafayette advertiser bluntly stated "Leadership missing this Session." And the Baton Rouge Morning Advocate concluded that "Jindal and legislature took steps backward." The Jindal team strategy was based on either cutting or holding the line on state spending. There were few specifics given to legislators that would define the Jindal scenario of a state government reorganization plan or any long-range goals for the state’s future. One of the main reasons there was so much criticism, particularly of Jindal, was that expectations were so high across the state. Jindal was supposed to be a new type of governor. He was a policy wonk who had been involved in the minutia of government.

Healthcare and Education are front burner issues in Louisiana, both crying out for major reform. Jindal had been Secretary of the Department of Health and Hospitals. He was director of the University of Louisiana System, then went to Washington to run a congressional bipartisan healthcare commission. He would seem to have both the knowledge and the tools to bring about indicative change to the state’s backwards approach in both of these vital areas. But for whatever reason, the Jindal team chose to merely “hold the line” on spending, taking the attitude that it was apparently good enough just to “get by” with as little controversy as possible. A good example was an effort to enact some important, but minor reforms in how local school boards are run. One proposal was aimed at keeping school board members from meddling in bureaucratic decisions by requiring a 2/3ds vote to hire or fire a superintendent. Voters in the state were polled, and there was overwhelming support for such a change. All the state’s good government groups lined up behind the effort. And though the Jindal administration said they were supporting this and other reforms, at the last minute, they ducked. Floor leaders for the Governor quietly passed the word to legislators to vote their “local politics,” rather than stay committed to these important reforms. As the Morning Advocate editorialized: “Years from now, looking back we fear historians will say it was the Governor and the Legislature who killed accountability in public education.” What advice could be given to both the Governor and the legislature that would get them back on a progressive, reform track? They could start by reading Malcolm Gladwell’s informative best seller, The Outliers. How do you find a way for Louisiana to jumpstart its mediocre educational apparatus so as to at least come close to the innovations taking place in many other states? Gladwell points out that merely trying to “keep up with the Jones” in today’s competitive educational climate is not enough. Other states, ranked significantly higher than Louisiana in educational performance, are also


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experimenting and looking for new ways to get better results. Something dramatic has to be done to make a significant jump. Just released results on Higher Education from the Southern Regional Education Board lists Louisiana as having the lowest graduation rate in the 16 state group, with only 37 percent of full-time freshmen graduating within six years from beginning their studies. It is more than obvious that Louisiana has huge strides to make.

Little to Show – continued and backward. He and the legislature missed a – continued grand opportunity in the past legislative session to set out a solid reform agenda in Louisiana that could be transposed nationally. It is still not too late for such a Louisiana effort, and the issue could well justify a special session of the legislature that, coincidently, would be widely viewed all over the country since healthcare has moved to the front burner of major national concerns.

Louisiana has applied for a medical waiver from the So what should have been done? Maybe the word federal government to implement Jindal’s Health “internet” might serve as a catalyst. It’s great to go First Initiative to direct Medicaid recipients off to college, cheer on the home team, to special primary care providers or and take in the keg parties. But if “group homes” so as to build the state is truly in an economic continuity in continuing care. war to keep jobs where we “If the state is truly in an This, in theory, gives better have to pour $50 million into care and saves money in a plant to hire chicken economic war to keep jobs the process. The program pluckers, the Governor where we have to pour $50 could be part of an should consider building overall medical reform a new LSU in cyberspace. million into a plant to hire plan that Jindal should chicken pluckers, the With major budget espouse nationwide. constraints, Jindal can But so far, he has left Governor should consider either tell educators to do selling and building a new LSU in less with less, or he can implementation to the charge them with the calling cyberspace.” bureaucrats. When a of quickly developing and major overhaul took place in implementing a cyber class Massachusetts a few years ago, system, giving students “anytime” then Gov. Mitt Romney was in the options of lectures by the best faculty forefront, and traveled the country for the entire higher ed system. The choices discussing his concept. The Louisiana plan are unlimited. Science labs could be made available needs more work and more “meat” that widens the on weekends, and at night. The social networking coverage net. But the need for such a plan that technologies are available (email, text messaging, addresses both cost and wider coverage is critical to visual direct communication with a computer the basic quality of life of all Louisianans. camera) to support student interactions with The other glaring omission of change and reform instructors and each other. was insurance cost relief. Throughout the Gulf South, When it comes to healthcare, Jindal and the other states are scurrying to develop legislative legislature should have jumped head first into the strategies to hold the line on rising property national debate. Louisiana has the unhealthiest insurance costs. In South Carolina, a number of new population in the country, while the number of initiatives passed the legislature including the uninsured in the state continues to rise. The establishment of catastrophe savings accounts that Governor is supposed to know health issues forward are tax free, allowing new self-insured procedures


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for homeowners, and giving tax credits to those who make their homes more storm resistant. Georgia has beefed up its state property insurance association of last resort with the purchase of reinsurance to cover any major disaster. Alabama is following the South Carolina model mandating companies to give cheaper premiums in exchange for structural improvements to homes. Mississippi is using federal funds to bolster their state-run insurance company of last resort, so as to keep insurance rates down. Some $25 million in federal dollars were also obtained in initial funding for the state‘s wind damage mitigation program. Homeowners can get up to 75% of the cost of such improvements, and once the work is done, a significant reduction in premium costs, as much as 50%, is the immediate result. Texas has adopted a long list of changes in recent years, and recently bolstered its windstorm insurance program to cover damages exceeding one billion dollars. In every other state along the gulf coast, major new reforms were put into place to contain high property insurance costs. But there is one exception, and that’s here in Louisiana. The legislature in the Bayou state considered only two insurance proposals of any significance that made their way through the process. First, there exists a fund of some $100 million to attract new insurance companies to the state. The idea has proven to be a mistake and the present law says the leftover money, some $70 million, is to be refunded to policyholders, paid back to you as a homeowner. Not so, say current legislators. They are diverting this money back to the general fund, breaking their promise to the policy holders of the state.

Little to Show – continued it. Nothing else. NO creative thinking or even an – continued effort to copy a number of good, working proposals in other Gulf Coast states. So how do rates compare along the Gulf coast when data is reviewed that is supplied by the National Association of Insurance Commissioners? In the latest figures available, Louisiana policyholders paid 3.31 percent of the state’s household median income for a homeowner’s insurance policy, the most expensive in the country. This was almost 40% higher than the nationwide average. Along the Gulf coast, Florida pays 3.16%, Mississippi pays 2.81%, Alabama is at 2.31%and South Carolina comes in at 2.05% When you look at the comparison figures or cost per $100 of residential property insurance, Louisiana property owners again lead the nation by paying an average $1.006. Texas comes in second highest at 93.9 cents, Mississippi paid 79.8 cents, Alabama paid 71.5 cents and Florida paid only 69.3 cents. That’s right. Florida, the state that Louisiana insurance officials and legislators dismiss as being too proactive, is at the bottom of the Gulf south list while continuing to attract new insurance companies to the Sunshine state. Louisiana continues to have the highest property insurance rates in the country, and makes less effort by far than any other Gulf Coast state to get skyrocketing premiums under control. If another major hurricane hits the state, affordable rates would become, for most homeowners, nonexistent. About the best you can hope for during this hurricane season in Louisiana is to keep your fingers crossed and ask the basic question: “Do I feel lucky?”

The other proposal involves complicated legislation affecting take-out companies that sell property insurance in south Louisiana. The bottom line is that under this new law, many homeowners will see their yearly premiums rise by as much as 20%. So the best you can expect in Louisiana is to lose your promised refund and see your insurance rates go up. That’s


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It would be unfair to cast all the criticism at the Governor alone. The present legislature is made up of a number of new, well-educated law makers who espoused major reform when they were running for the office. Yet, with few exceptions, these same prognosticators of change have sat back and let the Jindal team do all the heavy lifting. With two more sessions to go in the current term, there is still time for significant reforms to be developed. There is a litany of good proposals that need some immediate attention. Yes, there is a way. But, is there a will? The Camelot index was released a few weeks ago. Compiled by a joint effort of the National Governors Association and the National Conference of State Legislatures, it’s a measure of economic vitality, health, education, crime, society and government in every state in the country. As it has for the past three years, Louisiana ranked dead last. Shouldn’t this be a wake-up call? There was little to show towards mitigating this bottom-of-the-barrel listing from what was or was not accomplished in the recent legislative session. The Governor and the legislature are at a crossroads. There are a host of real, not perceived problems out there that have festered for years. The challenge is to not present perceptions, but develop a concrete game plan with specific, definable and obtainable goals. What are the state’s benchmarks for the next 20 years? At the halfway point in the terms of both the Governor and the Legislature, they have a lot of catching up to do.

Jim Brown’s weekly column appears in a number of newspapers and websites throughout the State of Louisiana. You can read Jim’s Blog, and take his weekly poll, plus read his columns going back to the fall of 2002 by going to his own website at http://www.jimbrownla.com. He also is a regular talk show host on Clear Channel radio in both New Orleans and Baton Rouge.

Disclaimer The views represented in the Louisiana Progress Journal are those of the respective authors only. None of the opinions, comments, or analysis by any author is necessarily attributable to any other author or the editors. For more information or to contact any of the authors, send an email to lpi.inbox@gmail.com.


Louisiana Progress Journal August ‘09

Please Share Because this is our first edition, all efforts expended in the creation of the Louisiana Progress Journal were on a volunteer basis. No money was spent creating this document. Accordingly, we seek to disseminate this journal and the ideas herein via viral online and personal sharing. Please feel free to forward, print, e-mail, fax, or pass around the office.

Seeking Articles As our students return to schools that are consistently ranked near the bottom nationally, our fall edition will be focused on public education. We invite you to share ideas for progress for Louisiana’s education system. Deadline for articles is October 9. For information and article parameters, contact lpi.inbox@gmail.com.

Louisiana Progress Journal v1.1 Edited by Greg Granger, Ph.D. Matt Bailey, J.D., Founder, Louisiana Progress Initiative Thanks to Tegan Rymer for research and distribution assistance.

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