Louisiana: The State We're In; 472

The production funding for Louisiana the state we are in is made possible in part by grants from Kaiser Aluminum and Southern Research Company Incorporated. It's Monday June 1st the first day of the Louisiana House takes up the state's 5 billion dollar operating budget. And everybody wants more money. It's embarrassed me and it embarrassed the hell out of this house. Good evening I better come to this edition of Louisiana the state we're in. This was

the week that became the chief order of business at the state capitol and tonight we have a report that looks at today's budget battle and one that's still in the future. Well as a report on one man's efforts to fight government corruption through the establishment of a state investigation and finally we'll hear a debate on this year's hottest business labor issue workman's compensation reform. But first to the subject that captured nearly everyone's attention at the state capitol this week spending this year's operating budget is set at just over five billion dollars. And when the capital that my funds are added to that it pushes the state spending for the coming fiscal year to over six billion dollars. So it's no wonder with so much at stake the scramble is on at the state capitol. It's Monday June 1st the first day the Louisiana House takes up the state's five billion dollar operating budget. And everybody wants more money. The crowd on the steps of the Capitol is composed of state employees. They want a 13 percent pay

raise that's more than the 8 percent the governor has recommended. Inside the Capitol there are other cries for money. Perhaps more so. But just as insistent and judges more money for government for social programs and for state agencies converge as a house begins debate an examination of the primary train. But it has been shaped and altered in the appropriations committee and it is now the job of committee chairman to hold it together in a deliberation in the committee. We have twenty five million five hundred thousand dollars to the state. General Fund expenditures. The tests this year will come on the issue of state employees pay raises. On Tuesday the House is rebellious straight about the governor's delay in announcing his capital construction program and pressure from lobbying groups in the passage of an amendment that increases pay raises to ten point two percent.

Chairman Riley does not take a round of microphone on a mistake because the rule is populated with nothing but state employees and school teachers. But I'll tell you this there's a heck of a lot of people out there and a million people in Louisiana and in resenting this. And you know pandering. And you're being demagogic. Look it up in your pocket. The action by the House yesterday Wednesday morning June 30. The governor holds a press conference he declares firmly but the amended Pedro's is totally unacceptable. This was added to afford a high pay raise and had been recommended by the administration and I would use all the powers at my disposal including the veto to maintain the pay raise as it was recommended by the administration. Now that pay raise is fair in my

judgment the majority of the state employees and the teachers believe that it's fair. Most of the classified employees in this state under this plan will receive a raise approximating 13 percent. 8 percent across the board together with an average of four point seven percent for their step increases. Anyway you look at it very handsome. Wednesday afternoon the House leadership begins a push to restore the pay raise to the original 8 percent. The arguments used are fiscal responsibility and an obligation to pass a balanced budget. It's a model. And it's not really a change from

Wednesday evening. House members have a change of heart. The pay raise for state employees is reduced with promises that other races will be held today. Percent this battle is over the House passes the budget. But not everyone is satisfied with the process or the outcome. That might become the cry of taxpayers across the state as they watch the Louisiana Legislature debate the state's five billion dollar operating budget in a one billion dollar capital outlay plan for as the dollars come in as revenue estimates. But lawmakers are sending them back out in spending plans and has some growth in state spending has become alarming. In five years the budget has doubled from just over three billion dollars to six billion in the past year alone spending is up over 14 percent. Some legislators are saying the budget is out of control. I don't know if I'd want to use the words out of control. Obviously we're spending every penny we

receive as long as the revenues continue to go up. This legislature and every other legislature in the state is going to spend it. Mark Vernon is the Legislative Fiscal officer. The lawmakers budget watcher and he says the executive branch and the legislature have been expanding programs to meet expanding revenues something which is not a problem today but will be tomorrow. If you look at the growth in revenues over time I thank you. Look something like this picture I'm drawing right now. James Richardson a professor of economics at LSU has been studying the state's revenue and spending patterns for a number of years and he demonstrates the problems ahead for the state budget with this graphic illustration. According to Richardson state revenues have taken a dramatic climb over the last couple of years due to the decontrol of oil prices which in turn brought sharply higher severance taxes but that bulge in higher revenue was beginning to level off while still expenditures continues to climb at a steady rate.

And that means trouble is around the corner and I would suggest two years particularly I know for sure right 1983 84. We're running up against this point where our expenditure growth collides with our revenue growth and the implication of that is that if you want to continue to follow that expenditure line you have to bring that revenue line back up which means raising taxes right. And that means that at this point the legislature and the governor has to make some hard decisions if they want to provide the public services along this line this expenditure line. Then they have to consider alternative tax sources if they do not want to do that. Then they have to consider which expenditures that they want to eliminate which ones they would like to curtail. The economists the solutions are as clear as the graph. Either cut spending or increase taxes but for the time to a process that is political in nature it is not so

simple especially when the budget process is growth oriented. What we're really doing in the state is incremental budgeting or accepting what they have now as fact and having to go from there to do it and either way will require major revisions in the budget procedures. And if you're tied to incremental budgeting and it seems that you're also tied to having expenditures always going on this line. And that's what we see in the wheezy and I've probably looked at the lines we see the expenditures probably increasing more than in past years. That's going to be the way it is. The legislature not only in Louisiana but other states have tried to adopt new budgeting procedures. When I started doing this plan program budgeting was the key word around the country. From there we went to things like zero based budgeting hardly sounds good on paper. So far none of them have worked. Why didn't they work I remember the great fanfare of the legislature less than five years ago when

we adopted zero based budgeting. Well the whole idea behind zero based budgeting was to get away from what we just talked about the incremental budgeting and saying OK this agency has nothing. If you are starting over again what would your priorities be. I think the big thing was to set priorities that again that sounds great but the agencies never took it seriously what the agencies did was say There there it was priorities were programs that they knew the legislature would never cut out. So I guess the blame for not working I'd put both on the division of administration and the agencies themselves the division because it's their responsibility to make sure the agencies fill the budget forms out right. I guess probably some blame to the legislature in my office too for not pushing that further in the legislature. The fact that the budget is difficult to evaluate and control is of course no secret to Governor Dave and his staff. Is his dream second budget to handle since taking office but really the first you

can call his own. I'm afraid that you know of wealth tends to erode of good budgetary process because it's very difficult to say well we don't need to increase this agency when we've had a legislative intent in a prior year. David Bruce is Dave Trane's budget coordinator saying that Budget Office recommendations are reconciled and implemented. And he says the administration is beginning to look seriously at what programs should be funded and which cut out. In fact he says the train administration cut 450 million from some programs. They decided to put it back into others. What we did was in effect make money available by budget cuts in certain agencies but reapply those same dollars to other agencies. So in effect the budget may have remained the same size but we emphasize different things with it. But even if I had the money shifted around brings new benefits to the state it doesn't change the fact that the growth in state spending is rapidly overtaking the short term growth in revenues. Without a doubt that day will come the question is only when the fiscal

first made a presentation several months ago and which we projected that day will come and around 1984 85. Now that day will be postponed if one thing happens and that is the price of oil continues to go up at a greater rate than we expected to. Right now we're seeing the price of oil is leveling off. So all that 1984 85 may be realistic. What that means to the governor and lawmakers is that the day of financial reckoning is coming in three or four years they must choose between higher taxes or lower spending. But what concerns economists is that the budgetary process may not be that far sighted. It is only a 12 month spending plan in the political process often gets lost in today's spending wishes at the expense of planning for tomorrow. If the revenue spending crunch doesn't hit us for another couple of years another jolt to the state budget is due in the phallus President Reagan's budget cuts begin to take effect. Those that are watching the budget

closely predict that any special session called to deal with those program reductions should be the liveliest thing we've seen at the Capitol in a long time all round of spending and taxes are familiar topics of conversation at the Capitol. This week there was also talk of a relatively new idea the creation of the State Bureau of Investigation. Many states have their own version of the FBI for handling criminal investigations. And this agent and now state legislator took a second shot at creating an investigation. They're almost two months the attention of the news media has been focused on the federal bribery trial of reputed crime boss Carlos Marcello my commissioner of administration Charles Reimer extensive undercover investigation of white collar crime in Louisiana. But to many others in Louisiana the case represents just one more example of alleged government corruption that state authorities didn't catch. But federal officials did. That's one reason why State Representative Lee wants to

create a State Bureau of Investigation the kind of super state police presented such a plan to the House Committee on criminal justice. In a crush of the people in this country critical on the street corners at the highest levels of society among public officials. One simply stated the bill would set up a four man board of investigation to oversee the investigative agency that would in turn have jurisdiction over crimes against state employees alleged wrongdoing by public officials and election law violations. Weaver says that three groups the local DA's the state attorney general and the state police all have authority over those areas today. But he says no one is adequately performing the job that no agency has

been given the specific responsibility on foreign policy as long as you have the personnel and that they need to do their job. We first introduced his proposal last year but it died after receiving little support from fellow legislators or the law enforcement community. But this year he's enlisted forty five coauthors almost enough to pass the bill. He's also won over the Louisiana Sheriff's Association representative Charlie I know I'm not saying that that agencies are not saying that they can't. I'm saying that they don't have the funds. But the idea behind creating a state bureau of investigation still has some powerful opponents among them the attorney general of the state must I say to you this is bad.

Because anything that taxpayers money is banned anything that takes an agency that's already fully capable of performing the service designed by this bill and this bill does just that. Six million dollars to fifty investigators just given my office by investing and production for next year you can take the next year. Talk confident I am because we have sitting on the back burner requests for investigations of public corruption from. The attorney general felt slighted by the money and attention and make sure of investigation it's understandable year after year the legislature turned down his request to be investigated. That's a point that if his plan wasn't buying that argument preferring to defer action on the bill effectively bottling it up for the rest of the

session. The House Committee on criminal justice has effectively banned a representative of the crudest investigation may be debated again this year depending on whether Senator Nelson brings up an identical bill in a Senate committee or a round of the legislative battle over the merits of the State Bureau of Investigation have been postponed until another day. There's a battle over another piece of legislation next week the fair House will debate a major revision in the workman's compensation law that is the insurance system set up to compensate records from last wages resulting from job related injuries. With us this week to discuss and I suspect debate the merits of this proposal are two attorneys Johnnie Koch representing the Louisiana Association of Business and Industry and Jack event with Louisiana. To begin gentleman Mr. Coe one of the complaints he seems to have with the existing system is that employers have to pay higher insurance rates. Business has to put out more money. Why should the average person clear about this.

Stanley stedding that reason and poor others who are privately insured have exorbitantly high insurance premiums were asked so so dressed and there that Louisiana Safran sure employers who hire who don't get their coverage from a private insurance company after a pair of extremely hot cars for their workers compensation clabbered. And patent hassle with batterers resample that were signed. Particularly with the economic development potential of our state is adversely impacted and as a horrible public actions are shown particularly where some 20 years have turned a 20 percent unemployment rate. Rather intense and industry workers compensation cast in Pat

11 cavitation of those top industries. We straddle and corner workers compensation costs. Adversely impacts every citizen instead of a mystery that sounds like such a good idea then workman's compensation benefits are going to go up insurance rates go down rise if about CIA post in the first place. Benefits to go up. Benefits are going to be shot. And second place I don't believe the cost is going to go down and I said that because of the mechanism that the proposed legislation provides for administering the system. It's true that we may have higher right now than we do in neighboring states but you've got to

remember that in Louisiana we have a magic potion of our workforce that is employed and after having US industries the figure then our account as if we are within the top three states and work related bets. Now that's due to the fact that we have. And so you say there are so many coins is because they are justified in more hazardous. The occupation you're going when you're going to have people get hurt and then you know stacking shoes in a retail store and we have so much of that type of activity. We have people employed in a nagging wouldn't which wouldn't I rather not be put out there they suggested that employees of these batteries perish

found an awful lot of claims is that hazardous report that was part of a special status that was weapons compensation system bad workers. If I can remember correctly the entire parish to crimes after every story inquiries Department. There were actually many crimes file employees there was a greater than 1 to 1 ratio of crimes per employee and Abbott as we've been saddled around the bed throughout the correction of this lavish National where we have a problem with the system the system has a problem. Temple we feel the

failure of the messenger staff to curing a system problem. I suppose the first major step if you examine this legislation is through a move from the courts about overworking this conversation plus a lot of authority in a state commissioner and this seems to be a bone of contention. Well that is you can take compensation management administered through the judicial system since it was first enacted in 94. We have in this state and I'm not sure of the exact moment but approximately 130 district judges. He's a man of bad people and I have to add to it. They've been practicing and I have to have been 5 5 here and I have a vast body of experience in handling workman's compensation. Right now the panelists to put this faction in the hands of

political Apache a commissioner who will be a planet back to back whose only qualification is that he must banaya with five years experience then left none of them in power is going to appoint deputy commissioner sufficient to accomplish this. But how many I don't know but it's going to be more than just a few. I can tell you that these gentlemen down to ratification know that they use with three years. So what you're going to do is you're going to take the administration and this system away from a group of elected reps may have to move a man of the Packers last maybe 10 15 years then judges that line out and you're going to put it and then the plan of bureaucracy which is membership and time to manage now how that's going to save any matter any money to me it would mean like if you had a mammal that was having a bash.

Every time you get you never have to credit your response to that you obviously think it is a better system back if we mention wide experience. Not that I don't listen to Grand Rapids. Only stabbed in the medication. Then as I've totally administered redfish compensation system there to rather status I believe we've had good Tory aspects of the man in the courts and we want the steady as Mr That said in 1914 in Acton and sample piece of legislation if you will get to the courts and then took to its hands after that and said whatever you want to do with it from here on out you can. Why is this bad. We

fan and there are matter of fact they're probably the most distinguished stired records compensation there. Professional Wrestler out of that if you ask who has been silent since 1953 the record's compensation needs to be administered but as a matter of reasons I have a lack of expertise and judiciary to handle the issues that Beverley rising you know. You know rappers compensation system the medical market friends like this the cast of The Mary necessity a compromise results in a judicial system run in packs and vans with men from point a random point he would rather than going through the protracted and aggravated with our judicial system. That's and that's just cut out asses right now. And sadder because they have to chat and then it's a lot of work trying to bring this from the theoretical ban to the practical in a fairly brief time give me one

example say neck or x. Mark he would be heard under this plan. So someone who loses say a hand on the job and if this system went into effect why would he be adversely affected. Will the private mail if and then began to a minimum benefit if the mass of that hand interfered with his ability to live then he wouldn't patent. Well it is subject to the weekly maximum benefit for up to four hundred fifty weeks if he is not actually working because of the NAF of this man if he has back to work and there is not have a wage laughed and he didn't receive any benefit for that week. Now out of this propels the question of whether or not he should be working or whether or not he has

not gotten a job that he should have not an MBA decided by this political appointee. All right let's try that on the other side Mr. Conrad is that I have an example of a gross abuse of the existing system. Back when you have found that. Actually when using data we can put people back to work. We have a situation with every step and that's what we're trying to address a legislation that is tannery Incredibly the saddle that temporary term of the saddle and therefore I would have anyway. This is not the benefit of our it is growing to workers who for whatever reason that have an injury grip settlement over worker's compensation cloying and perhaps even still wrapping the settlement comes out and they're back to

work mapping the Simon highway. Well gentlemen we're out of time. We'll be hearing more debate next week on this and we hope you'll join us then on the wheezy at state wherein We'll also talk about how some never betterments are looking to raise more revenue or finding an avenue at the state capitol until then. On that George for Ron. Good night. Redemption from Louisiana is made possible by. Seven research companies.