Whatever one might say about this year’s legislative session, it’s one that started with a lot of big ideas.

Merging universities in New Orleans, changing higher education governance, selling prisons and the Office of Group Benefits, and making substantive changes to the state retirement system. Whether one agreed with them all or not, each was a significant item that generated major debate.

The fact that none of those measures and very few other big items passed is probably disappointing to some and might signal that this session was a bust. But in many ways, it’s hardly surprising. The truth is that big change rarely happens during legislative sessions in an election year.

Lawmakers are typically extremely cautious about their votes, worried about making a political mistake and ready to get out of the Capitol so they can run for re-election. That last one became more urgent for some lawmakers because this year re-districting changed the look of a lot of districts.

What’s perhaps more surprising about this year’s session is not that so few big things passed, but that so many were proposed to begin with. While it’s true that some of the more significant items were driven by budget issues, this year’s legislative agenda looked more like the aggressive pushes you see the year immediately after an election, rather than the lame list of proposals you typically see before.

So when all was said and done, even though a number of big items generated the controversy lawmakers usually try to avoid in an election year, they dealt with it by killing just about all of them.

All that said, there were some accomplishments from CABL’s perspective. This year the governor proposed an extremely aggressive agenda in higher education that included:

  • Merging UNO and SUNO
  • Changing the governance of higher education
  • Restructuring the revenue stream to the Millennium Trust Fund and dedicating it to TOPS
  • Granting higher education operational autonomies in exchange for sustained improvements in performance
  • Adjusting tuition and fees for colleges and universities

Of the seven bills that were part of that package, six required a two-thirds vote of the Legislature. That’s a heavy lift by any measure. In the end, three items passed: the TOPS change, operational autonomies for the various institutions, and a much-need tuition increase for some of the community and technical colleges.

From CABL’s perspective, this still represents progress. In particular, we’re happy to see that our colleges and universities will now be able to request some operational freedoms that will still have oversight, but allow them to operate more efficiently and effectively and hopefully save money and other resources. That alone is a step forward.

Elsewhere in K-12 education, this wasn’t a year where major reforms were proposed. It was a year where current reforms were under attack. Two attempts were made to knock the teeth out of the state Recovery School District, which is seeing positive results in turning around dozens of failing local schools. Another effort sought to get rid of a new system to use letter grades to more clearly show parents and the public how schools are performing. CABL worked successfully to kill all three of those measures. Some positive steps were also taken to help expand charter schools in the state which CABL supported.

Of course, the issue that was expected to dominate the entire session was the budget. As it turns out, it did and it didn’t. Certainly, it consumed a lot of time, energy and debate. But given the fact that this was supposed to be the “cliff” year when the loss of federal stimulus dollars and other factors were expected to cause deep cuts in many budgets, the process turned out to be remarkably calm.

The governor proposed a budget that spared higher education and health care from the severe level of cuts they feared, but he did so by using some one-time dollars and various contingencies that made for controversy. The fiscally conservative House rejected most of those schemes and cut the budget deeper than the governor proposed. The Senate restored most of those cuts, but managed to do so in a way that was sensitive to the fiscal concerns voiced in the House.

So at the end of the day, it was win, win, win. The House flexed its conservative muscle, cut the budget and got rid of some of the more problematic funding mechanisms the governor wanted. The Senate restored the House cuts in a way that was acceptable to most of the fiscal hawks in the other chamber. And, the governor got a budget that pretty much funded all the things he wanted, though it was done in a different way than he suggested. All in all, it wasn’t nearly as painful as everyone expected.

That said, there were two major distractions this session that were both unnecessary and unfortunate. One was the brouhaha over renewing a four-cent tax on cigarettes that expires next year. The other was the debate over repealing the personal income tax, which seemed to never end.

Renewing the cigarette tax was a no-brainer until the governor said he would consider that a tax increase and veto the measure. Despite that threat, both the House and Senate mustered the two-thirds vote needed to pass the renewal and sent it to the governor, who made good on his word and rejected it. That led to a battle between the administration and the House on overriding the veto. The House tried – and failed – but then did the totally unexpected and tacked the tax renewal onto a veto-proof constitutional amendment dealing with TOPS that was part of the governor’s legislative package.

At the end of the day, it all passed, but not without an unnecessary expenditure of time and energy to accomplish what everyone knew was the right thing to do. But it created collateral damage in terms of added tensions between lawmakers and the administration which led to the failure of some of the revenue measures that would have benefited higher education.

The debate over eliminating the personal income tax was simply a waste of time that created some unrealistic expectations among many in the public that we could actually just do it and all would be fine. That’s ridiculous. To be clear, CABL has no problem with conducting a thorough review of Louisiana’s tax structure and looking at options to improve it. That might include studying the personal income tax along with other taxes, deductions and exemptions. But no matter how they tried to dress this one up, that wasn’t what this bill did.

Yes, other states like Texas and Florida don’t have personal income tax, but they have a high state property tax. We have an income tax, but we don’t have a state property tax. It’s not that we have higher taxes in Louisiana than other states. It’s just that we have different taxes. This debate was about simply eliminating taxes, not replacing them with anything else, and not having a legitimate plan for dealing with the consequences. It was at the same time unfair to the public, and frightening to see so much apparent support for such irresponsible behavior. Thankfully, it finally died, though it didn’t exactly go away quietly.

In summary, this was a session where a lot of big things were proposed, but not a lot of big things happened. Given that this is an election year where most lawmakers typically avoid controversy, that’s probably to be expected. The good news is that despite all the gloom and doom fears about a terrible budget debacle, it didn’t happen. The sky didn’t fall and state government didn’t collapse. And while few people got what they wanted, most got what they needed and that’s a lot better conclusion to this session than most people expected just a few months ago.

2011 Wrap-Up of Legislation of Interest to CABL:

Higher Education

GRAD Act 2.0 – Updates the GRAD Act that passed in 2010 to provide for more autonomies for colleges and universities as well as additional performance outcomes. – PASSED

TOPS Funding – Constitutional amendment that caps the Millennium Trust Fund at its current amount and diverts all future tobacco settlement payments to the TOPS Fund. Additionally, institutes a 4-cent sales tax on tobacco and directs those revenues to the Health Excellence Fund. – PASSED

Community College Tuition – Authorizes limited tuition increases at some community and technical colleges in order to standardize the tuition and fees and make them uniform across the state. – PASSED

Credit Hour Tuition Increase – Increases from 12 hours to 15 hours the number of credit hours on which colleges and universities could charge tuition. – FAILED

Operational Fee Index – Authorizes colleges and universities to index their existing operational fees which are based on 4% of tuition in 2004 to 4% of tuition. – FAILED

Single Higher Education Board – Creates a single post-secondary higher education board to manage the colleges and universities in Louisiana. – FAILED

UNO/SUNO Merger – This began as a bill to merge the University of New Orleans and Southern University of New Orleans into one institution and move that new institution into the University of Louisiana System. The merger effort failed but the bill was amended to allow for the transfer of UNO from the LSU System to the University of Louisiana System. – PASSED

LSU Health Sciences Center Tuition – Allows for an increase in tuition at the medical schools of the LSU Heath Sciences Centers in New Orleans and Shreveport. – PASSED

E-Textbooks – Allows for broader use of electronic textbooks and teaching materials in the LA Community and Technical College System. – PASSED

K-12 Education

Charter Schools – One bill would authorize corporations who make donations to charter schools to receive seats on the board as well as a percentage of spots in the school for employees’ children. Another bill would allow chartering authorities to extend the start up period. A third bill would allow groups to revise and resubmit charter proposals/applications. All help in the expansion of charter schools in Louisiana. – PASSED

Dept. of Education Reorganization – Restructured the Department of Education to be in alignment with the nine strategic goals of the department. – PASSED

School Letter Grades – Delays the fall 2011 implementation of the new letter grade system that is to be part of the Louisiana School Accountability System. – FAILED

Recovery School District – One bill would prohibit any further schools from being transferred to the Recovery School District. Another would require the immediate transfer of a school from the RSD back to the local school system once that school is no longer deemed academically acceptable. – FAILED

Charter School Retirement – Requires charter schools that withdraw from the Teachers’ Retirement System of Louisiana to repay the system an unspecified amount of the retirement system debt of its teachers who leave the system. – PASSED

Budgetary, Funds, Fiscal Issues

Rainy Day Fund – Changes the rules for replenishing the fund after it is “tapped” in a year of budget deficits. Currently, the fund must be replenished in the same year money is taken out. Under this constitutional amendment money would not have to be added back to the fund until the third year after it was removed. – PASSED

Funds Sweep – Increases the percent of a fund balance the governor may access to fill a budget deficit in times of decreased revenue. – FAILED

Public Contracts – Provides for a 10% reduction in all professional, personal and service contracts with the state. – FAILED

Retirement System Funding – Constitutional amendment to dedicate 10% of recognized surplus revenue to paying down the unfunded accrued liabilities of the state retirement systems. – PASSED

State Employee Contribution – Originally, this would have increased the employee contribution to the retirement system, but that provision was removed. It was amended to change the formula for calculating benefits from a three-year salary average to a five-year salary average, thus saving the system money. – FAILED

State Employee Reduction – Requires the reduction of 5,000 state employees over three years. – FAILED

Taxes/Credits/Incentives

Tobacco Tax – Authorizes the renewal of a 4-cent sales tax on cigarettes. It passed both chambers with a two-thirds vote but failed a veto-override vote. However, the sales tax was amended onto the Millennium Trust Fund constitutional amendment that dedicated Tobacco Settlement money for TOPS. – PASSED

Technology Commercialization and R&D Tax Credits – Extends both the Technology Commercialization Tax Credit and the Research and Development Tax Credit programs and converts them from credits to rebates. – PASSED

Digital Media/Movie Tax Credit – Makes the tax credit available under the movie tax credit program refundable versus transferable. – PASSED

Angel Investor – Reinstates the Angel Investor Tax Credit program. – PASSED


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