04/03/2009
Occasionally you hear things that you find hard to believe. That happened recently when I heard the 44th President of the United States giving a government guarantee for the warranties of cars purchased from General Motors and Chrysler. It was the perfect metaphor for the unparalleled intrusion of government into the marketplace that accelerated with the 43rd President's bailout of financial institutions deemed "too big to fail." It is now at warp speed with the policies of the current administration. Our federal government is now favoring certain companies over others-both in the financial sector and the automobile industry. These policies are ripe for conflict of interest, cronyism, and more manifestations of the cruel law of unintended consequences.
Guaranteeing the automotive warranties is perhaps a symbol for the new approach to governance in America. The federal government is lining up a bevy of "guarantees" that, if enacted, would significantly change our social compact.
One of the "guarantees" is in health care. President Obama and many of his allies in Congress want to move to a universal health care system in which every American is guaranteed health care coverage. While the plan is not designed to be a "single payer" system with the federal government making all of the payments for (and many of the decisions regarding) health care procedures, it could eventually default into such a system. The cost for the health care plan the president advocates would be enormous. Greatly expanding health care coverage will place escalating demands on the providers within the system. When costs rise (and they will), the government no doubt will employ the same "cost saving" measure it uses for Medicare and Medicaid: reducing the amount of compensation paid to providers. That would likely drive more providers out of the system and could result in rationed care.
President Obama plans to raise the money for his health care initiative from a huge "hidden" tax on carbon emissions. His "cap and trade" approach would have the federal government "guarantee" success in the fight against "manmade" global warming by limiting the amount of carbon dioxide emissions permitted and taxing those that exceed the limits. The president and his congressional supporters, disregard the fact that the amount of atmospheric warming has only risen 0.4 of a degree centigrade in the last 100 years and none in the last 11. They are on a jihad that could cost the U.S. economy as much as $1.9 trillion if this plan is implemented. The effect on jobs and economic growth would be so damaging that even many members of the "tax and spend" crowd in Congress are starting to put the brakes on this idea.
President Obama and many in Congress are pursuing a goal of "guaranteeing" a comfortable life for every citizen of the U.S. In their scenario, the government would see to it that every American will have a good job, a good education, high quality health care and a sound retirement. That is a noble goal that is easier to promote than to accomplish. Historically, those ends are achieved by hard work, a diligent approach to studies and saving for the future. Our leaders in Washington should perhaps eschew the temptation to promise so many guarantees and instead concentrate on making the massive behemoth of the federal government do less and do it much better for the folks who pay dearly to finance it. Promises quickly turn empty fast when the models that deliver them don't work and the cost for providing them brings with it the specter of fiscal insolvency.
Tuesday, April 14, 2009
Wednesday, April 1, 2009
Why We Need Local School Board Reform
03/27/2009
Louisiana has about 700 local school board members across the state. Local school boards are charged with establishing policy that results in quality education for students and they are the stewards of hundreds of millions of tax dollars collected for schools. In January, the national education journal Education Week published its annual "Quality Counts" issue, wherein states are ranked according to the journal's assessment of various educational quality indicators. Louisiana's nationally recognized accountability program ranked high, coming in at number two in the nation. Also as expected, our student achievement ranking was one of the lowest in the U.S., coming in at number 47. Soon, almost one-third (500) of Louisiana's public schools will be considered academically failing.
Quality public education is the key to economic development. There is a huge disconnect between state law and policy and implementation at the local level, where education reform really must occur to be effective. Implementation falls directly into the hands of local school boards. Though some boards operate efficiently and are student-focused, many are bogged down in the micromanagement of their district's day-to-day operations, leaving student achievement behind as a priority issue.
Last year, Rep. Steve Carter approached LABI and other groups to discuss a local school board reform legislative package he was considering introducing during the next legislative session. This coalition began to work with Rep. Carter and the result is four bills that attempt to re-focus school boards on the mission of improving student academic achievement. The bills would:
This legislation will in no way affect board members who do not try to influence hiring and firing. Currently, accountability exists at every level of public education except the school board level. Students are accountable every time they take a LEAP or GEE test. Teachers are being held to ever higher standards, from their university training to their performance in the classroom. Schools receive report cards and districts receive scores.
These bills do not strip elected members from important governance functions, including setting standards and policy, and engaging in procurement. They have taxing authority and spend the local, state and federal tax dollars entrusted to them. These bills are not about blame but, rather, about trying to be the best we can be. It's about being thorough at every level. Nothing in these bills stops "good" school boards from continuing their good work. It's an important step to Louisiana's economic development efforts and providing better educational opportunities for students.
Brigitte Nieland, Vice President and Council Director for LABI's Education and Workforce Development Council, contributed to this column.production and consumption of hydrocarbons
in Louisiana.
Ginger Sawyer, Vice President and Director of LABI’s Energy Council, contributed to this column.
Louisiana has about 700 local school board members across the state. Local school boards are charged with establishing policy that results in quality education for students and they are the stewards of hundreds of millions of tax dollars collected for schools. In January, the national education journal Education Week published its annual "Quality Counts" issue, wherein states are ranked according to the journal's assessment of various educational quality indicators. Louisiana's nationally recognized accountability program ranked high, coming in at number two in the nation. Also as expected, our student achievement ranking was one of the lowest in the U.S., coming in at number 47. Soon, almost one-third (500) of Louisiana's public schools will be considered academically failing.
Quality public education is the key to economic development. There is a huge disconnect between state law and policy and implementation at the local level, where education reform really must occur to be effective. Implementation falls directly into the hands of local school boards. Though some boards operate efficiently and are student-focused, many are bogged down in the micromanagement of their district's day-to-day operations, leaving student achievement behind as a priority issue.
Last year, Rep. Steve Carter approached LABI and other groups to discuss a local school board reform legislative package he was considering introducing during the next legislative session. This coalition began to work with Rep. Carter and the result is four bills that attempt to re-focus school boards on the mission of improving student academic achievement. The bills would:
- Take the profit out of local school board service - local school board members would be prohibited from being able to participate in local district health insurance plans (in 1996 they were prohibited from participating in retirement plans). Further, members may currently receive up to $800 per month in compensation. This bill would limit pay to $200 per month, plus expenses.
- Institute Term Limits - local school board members would be subject to the same term limits as BESE, the State Legislature, and many other boards–three four year terms. The goal of this legislation is to shake up the entrenched status quo that exists in some districts and encourage new citizens to get involved in education reform.
- Define the roles of the board and the superintendent - this bill seeks to get members out of hiring, firing and transferring school employees and creates penalties for those who violate this law. The bill also would require a two-thirds majority of school board members to hire and fire a superintendent.
- Tighten the Nepotism Law - tightens the law regarding the employment of superintendents' immediate family members.
This legislation will in no way affect board members who do not try to influence hiring and firing. Currently, accountability exists at every level of public education except the school board level. Students are accountable every time they take a LEAP or GEE test. Teachers are being held to ever higher standards, from their university training to their performance in the classroom. Schools receive report cards and districts receive scores.
These bills do not strip elected members from important governance functions, including setting standards and policy, and engaging in procurement. They have taxing authority and spend the local, state and federal tax dollars entrusted to them. These bills are not about blame but, rather, about trying to be the best we can be. It's about being thorough at every level. Nothing in these bills stops "good" school boards from continuing their good work. It's an important step to Louisiana's economic development efforts and providing better educational opportunities for students.
Brigitte Nieland, Vice President and Council Director for LABI's Education and Workforce Development Council, contributed to this column.production and consumption of hydrocarbons
in Louisiana.
Ginger Sawyer, Vice President and Director of LABI’s Energy Council, contributed to this column.
Louisiana: The Energy-Less State
President Obama’s recently-released budget details two things: where the Administration wishes to go and how it will pay for it.
In Louisiana and other energy-producing and consuming states, alarms are sounding, because the proposed budget could well be the end of economic vitality as we know it. Louisiana has long been called “The Energy State,” with the oil and gas industry providing state and local governments billions of dollars and creating thousands upon thousands of jobs.
But, in an attempt to chart a totally new energy course for the nation, the FY 2010 federal budget, called “A New Era of Responsibility Renewing America’s Promise,” is simply a plan to destroy the nation’s domestic oil and gas industry. While calling on the country to reduce its dependence on foreign oil to assure national security, the Obama Administration proposes to eliminate the tools that have been given to our domestic industry to seek and find oil and gas here at home.
The new budget proposes at least $31.5 billion in taxes and fees from the oil and gas companies over the next decade to pay for its “transition to a clean economy.” No longer will intangible drilling costs be expensed—that means there will be no more available capital investment for high-risk drilling.
No longer will wells be depreciated. No longer will credit be given for wells that produce only small amounts of oil and gas or for enhanced oil recovery projects. Gone is the manufacturing tax deduction. What the industry will get is a new 13 percent excise tax on production in the Gulf of Mexico.
Proponents of the plan point to industry profits in recent years; however, they totally ignore current realities. Take a look at Louisiana’s current budget and budget proposals for next year to see those realities. When oil topped $100 a barrel, the state of Louisiana amassed hundreds of millions of dollars in surpluses. When the price dropped, what happened? Budgets got slashed.
The oil and gas industry responded similarly—when the price for oil and gas dropped, it stopped investing. What was thought to be a great boon to the economy of north Louisiana and the state as a whole, when Haynesville Shale leasing was at its peak last year, has now slowed to a trickle.
This downturn in oil exploration and production has occurred despite the fact that the industry currently receives the federal incentives and more favorable tax treatment. What will be the effect of eliminating those incentives plus adding even more tax burdens on the industry under the new federal taxing plan? For Louisiana, investment in oil and gas would likely drop by $6 billion a year, the State General Fund would drop by another $2.3 billion a year, and unemployment would probably exceed 10 percent.
At the other end of the “double whammy” are Louisiana’s individuals, businesses, and industries. These are the folks that consume the oil and gas and electricity. The proposed budget hits them too, with what’s called “cap and trade” with an estimated national impact of $150 billion in increased energy costs.
So, where are we going and how will we pay for it? We’re headed toward what the U. S. Department of Energy calls “a low-carbon economy” paid for by taxes on our oil and gas consumers and producers. Though “a low-carbon economy” may be a long-term Administration goal, it will be a short-term reality in Louisiana. The combined effect of the taxes on Louisiana’s producers and consumers will assure that there will be much less production and consumption of hydrocarbons in Louisiana.
Ginger Sawyer, Vice President and Director of LABI’s Energy Council, contributed to this column.
In Louisiana and other energy-producing and consuming states, alarms are sounding, because the proposed budget could well be the end of economic vitality as we know it. Louisiana has long been called “The Energy State,” with the oil and gas industry providing state and local governments billions of dollars and creating thousands upon thousands of jobs.
But, in an attempt to chart a totally new energy course for the nation, the FY 2010 federal budget, called “A New Era of Responsibility Renewing America’s Promise,” is simply a plan to destroy the nation’s domestic oil and gas industry. While calling on the country to reduce its dependence on foreign oil to assure national security, the Obama Administration proposes to eliminate the tools that have been given to our domestic industry to seek and find oil and gas here at home.
The new budget proposes at least $31.5 billion in taxes and fees from the oil and gas companies over the next decade to pay for its “transition to a clean economy.” No longer will intangible drilling costs be expensed—that means there will be no more available capital investment for high-risk drilling.
No longer will wells be depreciated. No longer will credit be given for wells that produce only small amounts of oil and gas or for enhanced oil recovery projects. Gone is the manufacturing tax deduction. What the industry will get is a new 13 percent excise tax on production in the Gulf of Mexico.
Proponents of the plan point to industry profits in recent years; however, they totally ignore current realities. Take a look at Louisiana’s current budget and budget proposals for next year to see those realities. When oil topped $100 a barrel, the state of Louisiana amassed hundreds of millions of dollars in surpluses. When the price dropped, what happened? Budgets got slashed.
The oil and gas industry responded similarly—when the price for oil and gas dropped, it stopped investing. What was thought to be a great boon to the economy of north Louisiana and the state as a whole, when Haynesville Shale leasing was at its peak last year, has now slowed to a trickle.
This downturn in oil exploration and production has occurred despite the fact that the industry currently receives the federal incentives and more favorable tax treatment. What will be the effect of eliminating those incentives plus adding even more tax burdens on the industry under the new federal taxing plan? For Louisiana, investment in oil and gas would likely drop by $6 billion a year, the State General Fund would drop by another $2.3 billion a year, and unemployment would probably exceed 10 percent.
At the other end of the “double whammy” are Louisiana’s individuals, businesses, and industries. These are the folks that consume the oil and gas and electricity. The proposed budget hits them too, with what’s called “cap and trade” with an estimated national impact of $150 billion in increased energy costs.
So, where are we going and how will we pay for it? We’re headed toward what the U. S. Department of Energy calls “a low-carbon economy” paid for by taxes on our oil and gas consumers and producers. Though “a low-carbon economy” may be a long-term Administration goal, it will be a short-term reality in Louisiana. The combined effect of the taxes on Louisiana’s producers and consumers will assure that there will be much less production and consumption of hydrocarbons in Louisiana.
Ginger Sawyer, Vice President and Director of LABI’s Energy Council, contributed to this column.
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