Economy

Friday, March 29, 2013

I’ll have what he’s having

Posted By on Fri, Mar 29, 2013 at 2:10 PM

Jindal-bong.jpg


There’s a classic scene in the movie When Harry Met Sally where Meg Ryan and Billy Crystal are sitting in a crowded deli arguing about whether a man can tell when a woman fakes an orgasm. Crystal insists he can tell — and that no woman ever faked it with him. To prove him wrong, Ryan begins a show-stopping sexual soliloquy that, well, climaxes with her screaming, “Yes! Yes! YESSS!” — and pounding the table with both hands. She then casually picks up her fork and smugly continues eating as a sheepish Crystal and a stunned deli full of gawkers look on.

At a nearby table, an older woman puts down her menu and says to her waiter, “I’ll have what she’s having.”

I thought of that scene recently when I learned that Gov. Bobby Jindal had concluded that raising the state sales tax by 1.88 cents was not enough to cover the revenue that would be lost by eliminating the state income tax, as he proposes. The governor now wants to raise the sales tax by 2.25 cents — giving Louisiana a total state sales tax of 6.25 percent.

At first, I thought it was an early April Fool’s joke. It wasn’t.

Surely, I thought, the governor must be smoking some serious herb, which is legal now in some of the states he may have visited recently. His plan to give Louisiana the highest combined state and local sales tax rates in the U.S. was already considered D.O.A. in the House of Representatives — and that was when he was “only” seeking to increase the state sales tax by 1.88 cents.

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Saturday, March 23, 2013

Playing Bobby Jindal’s game

Posted By on Sat, Mar 23, 2013 at 11:58 AM

Even though he still doesn’t have a final draft of his tax-swap plan, Gov. Bobby Jindal has launched his statewide campaign to sell his gospel of wealth. He’s hoping to generate citizen support that will convince wary lawmakers to back his proposals.

For opponents as well as those who are merely skeptical of Jindal’s plan, time is of the essence. The longer business leaders and intellectually honest lawmakers defer to Jindal by “waiting to see the bill in final form,” the more they play into the governor’s hands.

Think back to last year, when Jindal spouted platitudes about “education reform” but waited, literally, until the last possible minute to present his bills — then rammed them through the committee process within days, giving no one a fair chance to study them. The result was, among other things, an unconstitutional voucher plan with virtually no accountability.

He’s using the same strategy with his tax-swap plan. He offers vague promises of “fairness” and “broadening the base,” but he and his tax-swap point man, Tim Barfield, executive counsel for the state Department of Revenue, offer few specifics — and then only in response to legislative and public pressure for more details.

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Thursday, March 14, 2013

Jindal tax swap plan: State sales tax increases to 5.88 percent

Posted By on Thu, Mar 14, 2013 at 2:11 PM

Gov. Bobby Jindal finally gave the state legislature (some of) the details of his plan to eliminate individual and corporate income taxes — which account for about $3 billion in annual revenues — without a negative impact to the state budget. As expected, Jindal's plan includes a hike in the state sales tax rate — from 4 percent to 5.88 percent — meaning Louisiana's average combined state and local taxes will be the highest in the country at about 10.75 percent. Jindal also plans to expand the sales tax base to include some services. Healthcare, education, construction, real estate, financial services, legal services, oil and gas services, and funerals will be excluded.

Food, prescription drugs and utilities will also be protected from tax hikes. As Jindal puts it, "We are going to protect food, prescription drugs and utilities from increased sales taxes." Of course, tax rates on those items are all protected by the state Constitution, so raising them (aka amending the Constitution) would ultimately require voters to approve higher tax rates on their own food, utilities and prescription drugs. Which seems unlikely.

I will present the highlights of the plan after the jump, but first I'd like to take a close look at one sentence in Jindal's speech, the statistic that justifies this tax code overhaul. The governor has repeatedly cited huge employment growth in states "without an income tax." He did so again today, in the following sentence:

“Over the last ten years, more than 60 percent of the three million new jobs in American were created by the nine states without an income tax."

This simple, seemingly straightforward declarative sentence is so loaded with half-truths and omissions it's really quite impressive. According to Bureau of Labor Statistics preliminary figures, the country added about 3.7 million jobs (later adjusted to 4.3 million) between January 2003 and December 2012. Of those, sixty percent, or 2.2 million, were, in fact added in nine states that don't have a traditional individual income tax. 1.5 million were created in Texas alone. So that much is true.

Six of those states — Alaska, Florida, New Hampshire, Tennessee, Texas and Washington — levy general business taxes on earnings and/or assets. The state of Texas, the great taxless success story, collected $4.6 billion in corporate franchise taxes in fiscal year 2012. South Dakota has a six percent business income tax that only applies to banks.

Two of them, Tennessee and New Hampshire, levy taxes on individual income, but only investment income. And, to be fair, neither state is getting much out of these taxes. In 2011, New Hampshire collected $77 million in revenue on its five percent dividend tax. Tennessee's six percent Hall Income Tax produced about $184 million in revenue. That's still negligible, but it's actually almost as much as Louisiana's been collecting in exorbitant, job-killing corporate income taxes, after you account for our $1.6 billion in exemptions. (In pure dollars, we have the third most expensive corporate exemptions in the country. Considering the only states that offer higher corporate income tax exemptions are New York and California, Louisiana's $1.6 billion is certainly the highest as a percentage of the state economy and state budget.)

Only two states, Nevada and Wyoming, are as tax pure as Jindal wishes Louisiana to be. And one of them collects $800-$900 million annually in gambling taxes.

(Read Jindal's plan after the jump)

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Friday, January 25, 2013

A reasonable alternative

Posted By on Fri, Jan 25, 2013 at 12:56 AM

A growing number of people are saying that Gov. Bobby Jindal’s proposed “tax reform” plan would shift too much of Louisiana’s revenue burden to its poorest citizens. Jindal supporters want criticism withheld until the plan is finalized. That would be a fair request if the governor weren’t keeping the details under wraps until very late in the game.

Besides, one doesn’t have to know everything about the plan to suggest improvements. What we know is that Jindal proposes to eliminate individual and corporate income taxes and the corporate franchise fee. To offset the $3 billion that would cost the state, he'll have to nearly double state sales tax revenues. Even a "modest" sales tax hike of a penny and a half would give Louisiana the highest combined (state and local) sales tax rates in the country — by far.

In addition to raising sales taxes, Jindal wants to eliminate many or even all sales tax exemptions, most of which benefit existing businesses, and institute a unified sales tax reporting system. He says his goal is to make the tax code simpler, broader in application, fairer and more attractive to business. That’s a worthy goal, and parts of his plan would accomplish that.

For example, eliminating the corporate franchise fee is a great idea. The fee generates relatively little revenue but is a huge turnoff to businesses. Ditto for the corporate income tax and the unified sales tax reporting system. Many Louisiana businesses have to file multiple returns for local and state sales taxes. Most other states have one statewide filing system.

But I question the wisdom of eliminating the individual income tax. Instead, why not make it simpler, broader, fairer — and lower?

Much lower.

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Wednesday, September 26, 2012

Kermit Ruffins, music community, push back against City Hall enforcement tactics

Posted By on Wed, Sep 26, 2012 at 4:16 PM

EDITOR'S NOTE: After this story was posted, Gambit learned that the author took an active role at the meeting. Rather than take down the story without explanation, we chose to leave it online. It should be read as opinion, not as news.

Meeting at Kermits Speakeasy

Trumpet player and music icon Kermit Ruffins called a meeting today via his Facebook page to get music community and its supporters help him fight what is being called by critics ‘an attack on music and culture by City Hall’:

<<"Im calling a meeting on wednesday 26 at 12 noon at my club 1535 basin st. to discuss a plan of action to stop the city from taking live entertainment away from small clubs. For more info call me at 504-975-3955 between the hr. of 10am-noon any lawyers that can help please come by noon sharp!!!!!">> - Kermit Ruffins.


(More after the jump!)

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Thursday, September 20, 2012

Tom Benson makes Forbes' list of wealthiest Americans

Posted By on Thu, Sep 20, 2012 at 2:30 PM

Tom Benson
  • Tom Benson
Forbes has issued its annual list of the 400 richest Americans, and the only Louisianan to make this year's tally is Tom Benson, who comes in at No. 360 with an estimated net worth of $1.2 billion. Writes Forbes:

Tom Benson expanded his New Orleans sports monopoly by purchasing the NBA's Hornets for $338 million in April 2012. Unfortunately, his football team, the Saints, has been mired in scandal surrounding a pay-for-injury "bounty" program coordinated by former defensive coordinator Gregg Williams. Benson also offered to buy the Times-Picayune newspaper after its corporate owners decided to cut back the print edition to three issues per week. His other New Orleans ventures include auto dealerships, the city's FOX television affiliate, and real estate, including the newly renamed Benson Tower.

The "corporate owners" to whom Forbes refers also made the list. Donald Newhouse was ranked No. 51 with an estimated boodle of $6.6 billion:

Donald Newhouse oversees the newspaper portion of Advance Publications, which runs local papers in more than 25 American cities. In the face of continued pressures on the newspaper industry Advance began to reduce the number of print edition published each week for a number of their papers .In October the Times-Picayune will publish three printed issues a week, making New Orleans the largest American city without a daily paper. Brother "S.I." or "Si" takes care of magazines under the Condé Nast banner.

And S.I. Newhouse came in just ahead at No. 46, with $7.4 billion.

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Monday, September 17, 2012

Deputy Mayor: City is paying close attention to LIBOR lawsuits

Posted By on Mon, Sep 17, 2012 at 6:19 PM

The city of New Orleans is in final negotiations about a $180 million bond refinance deal that will help it to avoid a crippling 2013 payment on an old bond deal, Deputy Mayor and Chief Administrative Officer Andy Kopplin told Gambit last week.

The New Orleans Bureau of Purchasing issued a request for proposals on a refinancing package — worth up to $200 million including costs of issuance — in July, and city officials approved one of the responsive bids on August 21. The deal is still in negotiations and has not yet been signed by Mayor Mitch Landrieu, Kopplin said.

The bulk of that money will be used to refinance a highly complex — and ultimately failed — 2000 bond deal and interest swap agreement. The refinance will help the city avoid a $115 million payout on the remaining principal amount from the 2000 deal, which would be due in March 2013.

“We have continued to move forward on that,” he said. “We’ve selected Raymond James and JPMorgan Chase as the lead underwriting team.”

When completed, the city will have terminated $115 million in outstanding debt on $170 million in taxable pension revenue bonds. The Series 2000 bonds were issued to finance the city’s obligations to the New Orleans Firefighters Pension (the old system for firefighters hired before 1968), as well as terminate an interest rate swap the city entered as part of the deal with its bond remarketing agent, UBS.

Terminating the swap could cost tens of millions of dollars, but that is still far less than the scheduled balloon payment. And a new, simpler deal will save the city millions in the long-run, Kopplin told the City Council Budget Committee last May.

Repayment on the Series 2000 bonds has cost the city about $19 million per year since 2008. Those large payments have been based in part on the London Interbank Offered Rate (LIBOR), which, it turns out, was manipulated in a way that may have cost New Orleans, and many other cities, a lot of money.

The city of Baltimore is leading a class-action lawsuit against banks that set the LIBOR rate. UBS is one of the defendants in that suit.

(More after the jump)

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Tuesday, July 10, 2012

Girl Scout Cookies — kind of — now in stores

Posted By on Tue, Jul 10, 2012 at 2:36 PM

Samoas in a compact package
  • Samoas in a compact package

Just when I started thinking I should have bought more Samoas and Peanut Butter Patties when the Girl Scouts were selling cookies all over town in March, I began seeing ads for Girl Scout candy bars marketed as tasting like popular Girl Scout cookies.

Blasphemy, I thought.

I was wrong.

I inadvertently picked up a couple at Walgreen’s (the stores sometimes offer things at the counter to raise funds for charities), thinking they were Nestle candy bars (The label prominently displays “Crunch.”) When I recognized my error, I decided to try one. I expected they would taste good, though not like the cookies.

OMG! The Girl Scouts and Nestle totally nailed the two “limited-edition” cookie flavors I tried: Peanut Butter Creme (peanut butter patty) and Caramel and Coconut (Samoa). As is often the case when in pursuit of Girl Scout delicacies, the Thin Mints candy bar was nowhere to be found. So far I haven't found a list of retailers selling the candy.

Consumers have through September (unless supplies run out) to get addicted to the latest Girl Scout offerings, then, just like the cookies, they will be unavailable.

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Tuesday, June 19, 2012

NOLA Media Group now hiring ... and eyeing office space in One Canal Place

Posted By on Tue, Jun 19, 2012 at 10:09 PM

Last week we were firing; this week, were hiring.
  • Last week we were firing; this week, we're hiring.
One week after Times-Picayune employees learned whether they would be invited to join the newly formed NOLA Media Group or would have to leave the company by the end of September — and one day after certified letters began arriving at employees' homes, informing them they were losing their jobs — the NOLA Media Group had a display ad in today's Times-Picayune seeking employees.

"We are NOLA Media Group. And we are hiring," the ad read, saying that positions were open in "content, digital solutions, human resources and sales," and urging applicants to visit nola.com/jobs for more information. Many of the jobs listed there are similar to those eliminated last week, including general assignment news and sports reporters as well as advertising account executives and sales managers.

Among the listed benefits in the ad: "commuter accounts." A commuter account is a pre-tax benefit similar to a health care flexible savings account, which allows an employee to put aside pre-tax monies for public transportation costs or parking fees. Such a benefit would have little value at The Times-Picayune building at 3800 Howard Avenue, which has plenty of employee parking — but will have more practical use at the new NOLA Media Group offices, which senior managers have said will be located in downtown New Orleans.

Some employees who have been invited to remain with the company have been told those offices may be in the One Canal Place Office Tower, the 32-story office building with The Shops at Canal Place on its three lowest floors.

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VA beefing up mental health services in southeast Louisiana

Posted By on Tue, Jun 19, 2012 at 9:44 PM

The VA is beefing up its mental health services for veterans in need of care and in anticipation of active troops returning from war.
  • Photo courtesy U.S. Army
  • The VA is beefing up its mental health services for veterans in need of care and in anticipation of active troops returning from war.

Southeast Louisiana Veterans Health Care System (SLVHCS) is recruiting 14 mental health clinicians and three support workers to expand services to veterans in the New Orleans area. The hirings are part of a federal move to add 1,600 mental health practitioners and 300 support personnel to U.S. Department of Veteran Affairs (VA) facilities across the country. SLVHCS currently has about 125 employees serving local veterans.

VA Secretary Eric K. Shinseki says he expects most of the new workers to be hired locally in the next six months, with some hard-to-fill positions taking longer. The additional staff, he says, will allow the VA to reach thousands of additional veterans who are suffering from mental illnesses. The SLVHCS center already provides individualized care, readjustment counseling, and immediate crisis services; additional staff is expected to allow facilities across the country to expand into cutting-edge research for Post-Traumatic Stress Disorder, as well as exploring alternative therapies.

The move comes six months after the U.S. Department of Defense (DOD) announced in December 2011 that the DOD was making a strong commitment to ameliorating an escalating rate of suicide among active and veteran service members. Marine Corps Sgt. Maj. Bryan B. Battaglia, the DOD’s top enlisted leader, announced the focus on mental health interventions in December 2011, shortly after the Center for a New American Security released a report that said every day 18 veterans — one every 80 minutes — end their own lives. Rates of suicide among active service personnel also are high, the report said, a problem the VA says it is addressing through intervention and education. The report concluded that suicide is a threat to America’s all-volunteer force.

For information about open positions here or at VA centers elsewhere, visit www.va.careers.va.gov or www.usajobs.gov. Veterans who need mental health care can visit www.va.gov, www.veteranscrisisline.net, call the crisis line at (800) 273-8255 (push 1) or text 838255.

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