Daily Report

This Afternoon's Headlines / Wed, March 28, 2012


Capitol Views by Maginnis: Term limits pass through committee

Bills to impose term limits on statewide-elected officials and local school board members are on their way to the House floor after passing through committee today. House Bill 390 is a constitutional amendment to limit the six statewide-elected officials besides the governor to three four-year terms, beginning with the current term. Rep. Simone Champagne, R-Jeanerette, sponsored the bill that will require a two-thirds vote by both chambers. The bill was endorsed by Lt. Gov. Jay Dardenne and opposed by the Louisiana Sheriffs Association, whose director Mike Ranatza said, "Now it's only state officials, but we realize that sentiment could go to local government as well." It passed, 6-1. Voting on party lines, the committee advanced a bill that would let voters in each school district decide this fall on term limits for those members. HB 292 by Rep. Steve Pugh, R-Hammond, would limit members to three four-year terms, with the clock starting on Jan. 1, 2012. Five Republican members of the House & Governmental Affairs Committee voted yes, and three Democrats voted no. "Once we make our contribution, we need to make room for others to follow behind," said Board of Elementary and Secondary Education member Holly Boffy of Lafayette, one of two parishes that already has term limits. The other is Jefferson. Louisiana Federation of Teachers President Steve Monaghan opposed the bill, saying, "In simply saying 'throw the bums out,' we could be throwing out worthwhile public servants." It passed, 5-3, with all Republicans voting yes and Democrats no.

(John Maginnis will publish a daily update throughout the legislative session on Daily Report PM. The report is also available to LaPolitics Weekly subscribers on the Subscribers Only page at LaPolitics.com. Registration is available on the homepage.)

Louisiana Public Broadcasting is providing a daily video update featuring highlights of the session, which you can see beginning at 6 p.m. here.

Analyst: Values to be found in the energy sector

Despite continued uncertainty in the global economy, there are plenty of good investment opportunities in the energy sector, says Doug Leggate, a senior analyst with Merrill Lynch Global Research. He says companies heavily invested in natural gas will continue to have a tough time over the next several months, but such companies have a substantial upside over the next two to three years. Natural gas prices have been battered by record supplies and a mild winter, but Leggate says it can't get much worse, and adds the outlook should improve as the industry moves away from dry gas production and embraces liquefied natural gas export opportunities. Leggate also says he's bullish on U.S. refining. While 10% of U.S. refining capacity has been lost over the past 12 months, thanks in part to the cost of environmental regulations, cheap natural gas—used as an energy source and a feedstock for low-sulfur diesel—gives U.S. refineries an advantage over their European counterparts, he says. Specific companies mentioned by Leggate as possible good buys include:
• Anadarko Petroleum: Recently made a major natural gas discovery in Mozambique, which could provide several LNG opportunities by 2020;
• Exxon: Not a growth company, but is buying back some of its own stock, so what's left should increase in value;
• Marathon Oil: A top pick in the energy sector, with a large, stable cash flow that can be reinvested in unconventional oil recovery.
Leggate was guest speaker today at a luncheon hosted by the Davis, Miller, Roy Group of Merrill Lynch. —David Jacobs

Two Cents: Why is council involved in a local issue?

The Metro Council is scheduled this afternoon to consider a resolution of support for a proposed 10.6-mill property tax that, if passed on April 21, would generate as much as $18 million in dedicated revenue for the financially beleaguered Capital Area Transit System. The question is, why is a parishwide governmental agency wasting time debating what's now a local issue? Because of the way those pushing for this tax have crafted the taxing district (limiting the vote to those in incorporated Baton Rouge, Zachary and Baker), it makes no sense for politicians representing constituents outside the taxing district to take a position on a tax they and those they are elected to represent will not pay. As important, why should any of us living within the taxing district care what someone—elected or otherwise—thinks who has no financial skin in the game? If the council wishes to debate mass transportation, perhaps members can explain why they won't find the $2 million necessary to prevent a threatened July shutdown of the bus system. As interesting, maybe they can tell us if they will continue granting CATS a $3 million general fund appropriation should the tax pass. If the answer is no (and that seems to be the majority view after Business Report spoke with members of the council), perhaps they can explain how they intend to spend that $3 million (courtesy of voters in incorporated Baton Rouge, and perhaps Baker and Zachary) in the future: Will that money be dedicated to projects within those cities who made the bounty possible, or will the largesse be spread across the parish? Make no mistake, CATS should be a parishwide entity; it is those individuals responsible for this tax plan who have turned it into BRATS—the Baton Rouge Transit System. Send your comments to editors@businessreport.com. —JR Ball

Personal income up nearly 5% in Louisiana last year

Income received by all people from all sources—job earnings, investment income, property income and government payments—rose by 4.8% last year in Louisiana as the petroleum and manufacturing industries enjoyed a strong 2011, the federal Bureau of Economic Analysis reports today. Louisiana's personal income rose from $168.36 billion in 2010 to $176.5 billion in 2011. On a per-person basis, that translates to $37,039 in 2010 and $38,578 in 2011. The mining category, which includes oil and gas, saw a $638 million jump in earnings in Louisiana last year. But the BEA also divides manufacturing into durable goods—those expected to last at least three years—and nondurable goods. Put together, manufacturing in Louisiana pulled in $668 million more in earnings in 2011 than in 2010. The BEA says personal income among the 50 states and the District of Columbia rose by an average 5.1%, ranging from 3.4% in Maine to 8.1% in South Dakota. Read the full story from The Associated Press here for more specifics on the Louisiana numbers; and see the complete report form the BEA at its website here.

Payton, Saints face big decisions this week

Saints owner Tom Benson left the NFL meetings today and headed back to New Orleans, where his team's top brass had major matters to discuss during what could be Sean Payton's last week of work in 2012. Team spokesman Greg Bensel says no decision has been made on an interim coach since a meeting took place on Tuesday with former NFL coach Bill Parcells. Payton has indicated he is hoping Parcells can help New Orleans move forward, whether he wants to get back into coaching or not. It could be a few days before the team decides on an interim coach. Payton says he has not decided whether to appeal his season-long suspension; he has until Monday to do so. Payton spent only Tuesday at the NFL meetings and planned to be back at work in New Orleans today, with a view to tying up as many loose ends as he can in the next few days. As many as 27 players also could be sanctioned for their role in the bounty scandal. Payton says he doesn't want the scandal to "taint or tarnish" his team's recent success. "We'll get through this," he says. "This will be a challenge. You know, we've gone through a lot of adversity, and we've won a lot of games in really a short window of time. And I know our players are leaders both within the locker room, and the coaching staff will look at this as a challenge and a little bit as an opportunity."

'Louisiana Going Global' to advise on business expansion, international trade

Congressman Bill Cassidy will deliver the keynote address at a seminar next week focused on business expansion and international trade, called "Louisiana Going Global." Aimed at small and midsize businesses that are looking to expand into international markets or are already exporting internationally but want to learn more, the seminar is free to attend. It will be held from 8 a.m. to noon on Thursday, April 12, at the Crowne Plaza, 4728 Constitution Ave. Registration begins at 7:45 a.m. In addition to Cassidy's talk, a panel discussion is slated to reveal and compare individual experiences in international trade. Topics for the seminar include international distributions channels, what to avoid when exporting, exporting financing options, export controls, as well as laws and licenses. Attendees will also get a chance to speak with various economic development organizations to learn about different incentives available to companies interested in exporting. The Louisiana Business & Technology Center at LSU is partnering with the Baton Rouge Area Chamber and the Louisiana Small Business Development Center to present the seminar. More information and registration are available here.

Supreme Court wraps up historic hearings on health care

The Supreme Court signaled today that it could throw out other key parts of President Barack Obama's health care law if it first finds the individual insurance requirement unconstitutional. On the third and last day of oral arguments, the justices appeared to accept the administration's argument that at least two important insurance changes are so closely tied to the insurance mandate that they could not survive without it. Less clear was whether the court would conclude that the entire law, with its hundreds of unrelated provisions, would have to be cast aside. The justices also spent part of the day considering a challenge by 26 states to the expansion of the Medicaid program for low-income Americans, an important feature of the administration's effort to extend health insurance to an additional 30 million people. The court's liberal justices made clear they will vote to uphold the Medicaid expansion, which would take in 15 million people, with the federal government paying almost all the costs. Hear audio from today's arguments here; and read the full story from The Associated Press here.

News roundup: Lawmakers scrap bid to cap TOPS tuition payments … LSU launches online campus tour … AlwaysCare dental and vision networks named largest in La.

You'll find out when you reach the top: A near-annual proposal to put a cap on the amount of tuition paid through the TOPS program has been rejected once again by state lawmakers. The House Education Committee today voted 12-4 against a bill that would limit the awards given through the free college tuition program, the Taylor Opportunity Program for Students. TOPS is a popular program across the state, but its costs are growing annually—to an estimated $168 million next year. Republican Rep. Joe Harrison of Napoleonville, sponsor of the cap proposal, says the state can't continue to afford the program's increasing expense. A higher education study commission earlier this year recommended a cap on TOPS awards. Opponents say any cuts to TOPS could limit students' ability to go to college.

Virtually there: LSU has launched a new online tour, including more than 60 videos on academic programs, student life, resources and more. The virtual tour also includes an interactive map integrating photos and videos. The virtual tour has been in development for about a year in partnership with Atlanta-based Realview TV. The virtual tour is available online and is also compatible with mobile platforms and tablets. Check it out here.

The benefit of growth: According to an independent, third-party assessment completed this month by The Ignition Group, Baton Rouge-based AlwaysCare Benefits, a Starmount Life Insurance company, has the greatest number of unique Louisiana locations in its dental provider network—just under 500—compared to AlwaysCare's most frequent competitors. It also has the largest number of Louisiana locations in its vision provider network, at just over 360. Those numbers reflect significant growth for AlwaysCare, as the firm has added more than 80 vision and 200 dental providers in the past three years.

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