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|Treasurer Kennedy: Moody's Warns About Higher Ed Cuts |
BATON ROUGE, LA - In a new report, Moody's Investors Service warns that Louisiana's public universities are ill-equipped to withstand further state budget cuts after already suffering the deepest reductions in the nation, State Treasurer John Kennedy announced Monday.
"Moody's is putting us on notice that it will reduce the credit ratings of our universities and community colleges if the Legislature continues to cut higher ed funding," said Treasurer Kennedy. "We've cut our college campuses by $700 million since 2008. We've made deeper cuts than any other state. Enough is enough."
According to Moody's, the credit quality of public colleges in Louisiana is lower than the median A1 nationally. Moody's attributes the low credit quality to historically weak state funding, anemic operating performance and limited liquidity.
"After five years of the deepest funding cuts to public higher education in the nation and significant expense reductions, these universities are ill-equipped to face additional credit stress," Moody's said.
The report can be viewed here.
|Unclaimed Property Director Receives Award|
BATON ROUGE, LA - Unclaimed Property Director Kathleen Lobell will receive the 2015 Unclaimed Property Professionals Organization Members' Choice Above & Beyond Award next month in Orlando, Florida.
"Kitty works tirelessly to return money to the taxpayers of Louisiana," said Treasurer Kennedy. "She tackles her job with a positive attitude and absolute professionalism. She is truly an asset to the Louisiana Department of the Treasury."
Lobell has worked for the Louisiana Department of the Treasury since 2000. She became Unclaimed Property director in October 2012. Under her supervision, Louisiana's Unclaimed Property Program shattered records by returning $35.5 million to 116,000 individuals during the 2013-2014 state fiscal year.
The 2015 UPPO Members' Choice Above & Beyond Award recognizes state administrators or staff persons who went above and beyond to assist a holder with compliance efforts; significantly contribute to the unclaimed property industry in a manner that has enhanced the relationship between the state and holders; and/or significantly and positively enhanced the unclaimed property industry in some way.
Lobell will receive the award on March 9 at the 2015 UPPO Annual Conference.
|State Bond Commission Approves $614 Million for Local Projects |
BATON ROUGE, LA - The State Bond Commission approved $614 million for projects statewide and saved taxpayers more than $12 million at its February 19 meeting, according to State Treasurer John Kennedy.
"We are accumulating record savings for taxpayers by refinancing debt and capturing lower interest rates," said Treasurer Kennedy. "These savings will benefit taxpayers in Houma, Lafayette, Broussard and other parts of the state."
Among the individual projects approved were:
- Ascension Parish, $450,000 in Limited Tax Revenue Bonds for the West Ascension Consolidated Gravity Drainage District No. 1: for (1) financing capital expenditures and drainage works and (2) funding a reserve fund, if necessary.
- DeSoto Parish, $8.3 million in General Obligation School Refunding Bonds for the DeSoto Parish School Board, School District No. 4: saving taxpayers $433,000.
- East Baton Rouge Parish, $105 million in Revenue Refunding Bonds for the Louisiana Public Facilities Authority's Nineteenth Judicial District Courthouse Project: for (1) refunding all or a portion of Revenue Bonds, Series 2007, (2) paying the premium for any bond insurance policy insuring the refunding bonds, if necessary, and (3) the premium for a debt service reserve fund surety policy, if necessary.
- Jackson Parish, $3 million in Certificates of Indebtedness, Series 2015, for the Jackson Parish Police Jury: for constructing and improving roads and bridges.
- Jefferson Parish, $3 million in Taxable Sewer Revenue Bonds for the Jefferson Parish Council, Consolidated Sewerage District No. 1: for (1) improvements to Terrytown No. 2 Wastewater Pump Station, including but not limited to replacement of existing pumps and addition of new variable frequency drives to achieve energy savings and (2) improvements to Helios Avenue Wastewater Pump Station and Transcontinental Drive Wastewater Pump Station, including but not limited to replacement of aging constant speed pumps with newer units that utilize variable frequency drives and flow-based controls.
- Jefferson Parish, $37 million in Sales Tax Revenue Refunding Bonds for the Jefferson Parish Council, Sales Tax District: saving taxpayers $1,098,843.
- Jefferson Parish, $20 million in Multifamily Housing Revenue Bonds for the Louisiana Community Development Authority's Cypress Cove Apartment Project: for acquiring, rehabilitating and equipping a 444-468 unit multifamily housing complex, located in Westwego.
- Jefferson Parish, $12 million in Revenue Refunding Bonds for the Louisiana Community Development Authority's Jefferson Recreation and Cultural Facilities Project: saving taxpayers $434,761.
- Lafayette Parish, $20 million in Public Improvement Sales Tax Revenue Refunding Bonds for the city of Broussard: saving taxpayers $1,676,328.
- Lafayette Parish, $115 million in Communications System Revenue Refunding Bonds, for the city of Lafayette: saving taxpayers $3,158,374.
- Lafayette Parish, $35 million in Electric Revenue Refunding Bonds for the Lafayette Public Power Authority: saving taxpayers $1,192,881.
- Lafayette Parish, $20 million in Revenue Bonds, taxable or tax-exempt, for the Louisiana Community Development Authority's Ragin Cajun Facilities, Inc. - University of Louisiana at Lafayette Cajundome Project: for (1) financing the design, renovation, furnishing and equipping of certain improvements to the Cajundome including but not limited to arena improvements, (2) funding a debt service reserve fund, if necessary, and (3) paying a premium for a bond insurance policy insuring the bonds, if necessary.
- Lafourche Parish, $6.2 million in Water Revenue Refunding Bonds for Water District No. 1: saving taxpayers $393,117.
- LaSalle Parish, $75,000 Promissory Note for the LaSalle Economic Development District: for purchasing 10 acres from Red Mountain Timberco III, LLC, or its successors, to expand the existing industrial park in Jena.
- LaSalle Parish, $127 million in Solid Waste Disposal Facility Revenue and Refunding Bonds for the Louisiana Public Facilities Authority's Louisiana Pellets, Inc. Project: for (1) constructing, installing, acquiring and equipping certain solid waste disposal facilities consisting of a wood pellets production plant which processes wood waste to manufacture biomass wood pellets, located in Urania, LaSalle Parish, (2) refunding Solid Waste Disposal Facility Revenue Bonds, Series 2013A and (3) funding working capital, capitalized interest and any required deposits to any reserve fund.
- Livingston Parish, $18.5 million in General Obligation Refunding Bonds for Livingston Parish School Board, School District No. 1: saving taxpayers $686,958.
- Ouachita Parish, $8.2 million in General Obligation School Refunding Bonds for Ouachita Parish School Board, East Ouachita School District: saving taxpayers $191,288.
- Ouachita Parish, $25 million in Sales Tax Bonds for the city of West Monroe: for making capital improvements.
- Pointe Coupee Parish, $1 million in Revenue Bonds, Series 2015, for the Pointe Coupee School Board: for constructing, renovating, repairing, equipping and rehabilitation of certain public school facilities.
- St. Tammany Parish, $20 million in Hospital Revenue Bonds for Hospital Service District No. 1: for (1) acquisition and construction of capital improvements and equipment to the hospital in Covington or any of the other facilities, including imaging equipment, computer hardware and software, medical equipment and patient furniture and (2) funding a reserve fund, if required.
- Terrebonne Parish, $3.8 million in Public Library Sales Tax Refunding Bonds for the Terrebonne Parish Council: saving taxpayers $228,762.
- Terrebonne Parish, $11.3 million in Public Improvement Sales Tax Refunding Bonds for the Terrebonne Parish Council: saving taxpayers $1,178,547.
- Terrebonne Parish, $13.5 million in General Obligation Refunding Bonds for the Terrebonne Parish Council: saving taxpayers $1,059,225.
- Vernon Parish, $400,000 in General Obligation School Refunding Bonds for the Vernon Parish School Board, Wardwide School District No. 160, Ward 3: saving taxpayers $297,000.
The Louisiana State Bond Commission meets monthly to review and approve applications from parishes, municipalities, special taxing districts, and other political subdivisions of the State requesting authority to incur debt. For more information, visit www.LATreasury.com.
|Higher Education Can and Must Be Saved|
If you look long enough at the cuts to our higher education budget, you begin to feel like Alice in Wonderland tumbling down that deep rabbit hole. You don't know when the nightmare is going to end.
A report by Moody's Investors Services told the nation what we in Louisiana already knew. Our public colleges and universities have suffered deeper budget cuts than anywhere else in the U.S. over the past five years.
Charts by the Center on Budget and Policy Priorities show we're digging ourselves deeper and deeper into a hole.
In 2013, Louisiana was second to New Mexico in the negative change to state spending per student with inflation adjusted. Now Louisiana stands first, spending $5,004 less per student. Our neighbor to the east, Mississippi, is spending $2,524 less per student. Texas has managed to spend only $1,996 less per student.
Moody's warned that Louisiana's colleges are ill-equipped to face additional credit stress. In simpler terms, Moody's is warning that it will slash the credit ratings of our colleges and universities unless we clean up our budget mess. Our higher education system doesn't need a lower credit rating on top of the budget cuts. A lower credit rating would make it more expensive to borrow money when it's time to build new dormitories or fix the chemistry lab.
Thus far, we've settled on raising tuition as the solution to our problems. As Alice found when she ate the "Eat Me" cake and outgrew the room, bigger isn't always better, especially when it means taking a bigger chunk out of our families' household income to put kids through college. That's a tax increase, even if you don't call it one.
So let's stop taking more and more money out of our taxpayers' pocketbooks. Let's not even have a discussion about new tax increases. We don't need to raise taxes.
The state budget under Governor Mike Foster was $12 billion. Now it's $25 billion. Unless we're giving every state worker a $120,000 LS Lexus Hybrid to tool around the state in, we have enough money to meet our needs. All we need to do is stop foolish spending.
A report by the Public Affairs Research Council of Louisiana estimated we could save $300 for every Medicaid patient who goes to a doctor's office or a clinic instead of the emergency room. Why is that significant? Medicaid and uninsured patients in Louisiana make 900,000 visits to the emergency room each year for routine care. Get a handle on that problem, and the savings are in the hundreds of millions.
Another problem - and it's one I've talked about so much that even I'm getting a little tired of punching the alarm button - is the number of consultants on the government payroll. We have 19,000 consultants. Would you believe we've paid someone to teach people how to use Facebook?
Let me tell you about Edythe Kirchmaier. Teddy Roosevelt was president when she was born. She knitted care packages for World War I soldiers. Now age 107, she recently became Facebook's oldest registered user. And she did it without the help of a paid consultant. You can follow her on Facebook. If you're unsure how, just ask Edythe to teach you.
The Louisiana Legislature will convene in April to debate the state budget in earnest. Legislators will have to figure out how to fill a $1.6 billion budget hole. I hope they don't continue to devastate higher education with cuts. I hope they don't hire more consultants. I hope they settle on sensible solutions that get us back into credit rating agencies' good graces and set the state on a smooth course for the future.
|Leave TOPS Alone|
The year was 1988. A successful New Orleans businessman named Patrick F. Taylor had a speech to give. His audience was 183 restless middle schoolers who weren't college bound. Heck, many weren't even high school bound. They were biding their time until they could drop out of school.
Instead of a pep talk, Taylor decided to make a pitch. He would pay for the kids to go to college if they kept going to class, stayed out of trouble and maintained a "B" average. With that promise, Taylor established the building blocks for TOPS.
TOPS (the Taylor Opportunity Program for Students) is the state-funded college scholarship program that has benefited more than 200,000 kids in Louisiana. It doesn't just send kids to LSU or Southern. It sends them to truck driving school if they want to drive a truck. It sends them to court reporting school if they want to become a court reporter. In other words, TOPS fulfills dreams.
Now some will tell you that TOPS has become too expensive. They'll tell you the sky is falling. They'll tell you the state budget is on a collision course, and TOPS is helping fuel the inevitable crash. They'll tell you that changes can be made gradually to make the program more affordable for the state. Here's what I say: Leave TOPS alone. We can't afford to diminish what TOPS does for our state.
The Hamilton Project, an arm of the Brookings Institution, crunched the numbers last year on what a college degree is worth. Not surprisingly, a degree in chemical engineering is more of a moneymaker than a drama degree. Also not surprisingly, any degree is better than no degree. The Hamilton Project's conclusion: "Median earnings of bachelor's degree graduates are higher than median earnings of high school graduates for all 80 majors studied." For every successful college dropout like Bill Gates, there are a thousand other dropouts clocking in at minimum wage jobs and not making a living wage.
Patrick Taylor knew the importance of a college education. He left home at 16 and made his way to LSU, which didn't charge tuition at the time. Today, it easily costs $10,000 in tuition and fees a year to attend LSU as a full-time student once books and summer classes are included. That's a hefty bill for a middle class family with four other kids still at home.
Now I don't want to shock you, but Louisiana is not a wealthy state. Median income is well below the national average. We're rich in culture, food, history and tradition. Economically, we often struggle. That's why education is so important. Our future can be better than our present or our past, but only if our kids go to school.
We offer our kids a free elementary school education. We offer them a free high school education. But a high school education isn't always enough. We need to continue to offer young Louisianians help with a college education if we expect them to succeed in a keenly competitive, global, knowledge-based economy. We also need to continue to give them an incentive to stay in Louisiana, instead of migrating to Denver and Dallas and Atlanta.
Georgia has a form of TOPS. It's called HOPE. In 2011, big changes were made to HOPE - changes that were made in the name of saving the state money. Suddenly, technical college students had to maintain a higher grade-point average. Tuition assistance was slashed. The result was that 62,504 fewer kids received HOPE. Within two years, Georgia backpedaled on the changes.
We should not make the same mistake in Louisiana that Georgia made. TOPS has been a roaring success. Sixty nine percent of the more than 62,000 students who received an initial TOPS payment between the 2002-03 and 2006-07 academic years graduated from a Louisiana public college. That's a triumph.
I'll leave you with Patrick Taylor's take on why TOPS matters: "Attendance at public colleges and universities must be based on the ability to learn and not the ability to pay."
|Let People Pray at LSU|
Fifty years ago, administrators at the University of California at Berkeley tried to curtail free speech on campus. They quickly had a situation on their hands: Hundreds of protesters materialized, a priest clambered onto the top of a police car to quiet the crowd and students swarmed the Administration Building. Eventually, the governor intervened, telling the university's president to broker a truce. The Free Speech Movement was born.
Maybe you weren't a child of the 1960s. Maybe you weren't even alive in the 1960s. Rest assured, the 1960s were more than Woodstock, bad hairdos and really good music. The era helped cement the idea that college campuses are a place for intellectual freedom and free speech.
A Christian prayer rally featuring Gov. Bobby Jindal that's scheduled for January 24 at LSU in Baton Rouge should take place as planned regardless of what you think of the organizers or what you think about the rally's content. Free speech is just that, the freedom to speak your mind. I can think of no better forum for free speech than a public college campus.
Our colleges teach our young people and stimulate their minds. It's on campuses that they explore the issues and find their own voices. Students deserve a full catalog of choices.
Fifty years after the Free Speech Movement, however, there are some who want to muzzle the First Amendment right to free speech on college campuses. They are wrong. "I do not agree with what you have to say," the 18th Century philosopher Voltaire once said, "but I'll defend to the death your right to say it." Voltaire was also a staunch advocate of freedom of religion, realizing, correctly, that freedom of speech and worship are inextricably related.
U.S. Supreme Court Justice William Douglas put it this way: "The framers of the Constitution knew human nature as well as we do. They too had lived in dangerous days. They too knew the suffocating influence of orthodoxy and standardized thought. They weighed the compulsions for restrained speech and thought against the abuses of liberty. They chose liberty."
The objections being raised to the LSU prayer rally are undoubtedly sincere, even if you don't agree with them. The primary objection is with the rally's sponsor, the American Family Association, a religious group that opposes gay marriage and homosexual rights. The LSU Faculty Senate and many students have characterized the prayer rally as damaging to the university's reputation. Protests are planned. Both the prayer rally and the protests should be allowed to take place. It's a slippery slope when you tell people whose opinions you disagree with that they can't speak or assemble or worship their God on a college campus. Intellectual freedom is about the free exchange of ideas.
Full disclosure: I'm a practicing Methodist. But I'd feel the same way if the LSU rally was to promote atheism.
Let people pray at LSU. And let people protest too.