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Baton Rouge native Bobby Jindal made history last month when he became, at age 36, the youngest governor in the United States. His primary night election also made the record books for other reasons: He is the first candidate to win an open gubernatorial seat since Louisiana adopted its nonpartisan primary system in 1975, and he is both the first Indian-American governor in the country and Louisiana’s first chief executive of an ethnic minority since Reconstruction.

But it’s not just that list of firsts that make Jindal different. He’s been a standout since breaking onto the political scene 12 years ago as the wunderkind of Gov. Mike Foster’s administration. He was just 24 when Foster tapped him to head up the state hospital system, a tenure followed by a brief stint running one of the state’s three university systems. Four years ago, he finished a close second in a runoff election to Gov. Kathleen Blanco. Not one to take defeat lightly, Jindal regrouped, ran for Congress and won.

After two successful, though rather uneventful, years in Washington, D.C., the state’s youngest congressman decided to try again for the state’s highest office. This time, he ran a flawless campaign, finishing first in a field of 13 candidates. For the past two weeks, he has been crisscrossing the state on a thank-you tour and assembling a transition team, which will advise him on building his administration.

Last week, Jindal sat down with Business Report in his 12th-floor transition team offices in a former men’s dormitory on the LSU campus. He spoke at length about why he thinks he will be successful, how the state needs to shift the focus of its economic development efforts, and what needs to change in higher education, K-12 education, and the state’s delivery of health care.

Question: You’ve been compared to Buddy Roemer, a highly intelligent young congressman who became governor. But we’re all aware of how his hubris and the political naïveté of his advisers got him in trouble. How do you avoid a similar fate?

Well, I think there are a couple of big differences. No. 1, winning the primary, which was unprecedented, winning 60 out of 64 parishes, having the endorsement of hundreds of local elected officials—Democrats, Republicans and independents, also the endorsements of the sheriffs, the small business community, so many different groups—we’ve been given a broad bipartisan mandate. Because Governor Edwards conceded (the election in 1987), Governor Roemer was denied that opportunity.

The second thing that has certainly helped us is having served in Congress we’ve passed several bills that required us to form a bipartisan consensus. I think that experience of building coalitions, building consensus, will certainly help us in Baton Rouge. I’m no stranger to state government. I ran the health care system. I helped run the University of Louisiana system. I’ve also worked with the folks in Baton Rouge before.

Then finally, the third thing is because of term limits we’ll have dozens of new legislators elected by the same voters that sent me to Baton Rouge, so I think certainly the stars are lined up for change in our state.

Q: Are there any veterans you’re going to bring in to the administration? Any old political hands who know how to navigate their way through the Capitol?

I think you’ll see a variety of people with a diversity of backgrounds. You’ll see people who are new to government, you’re going to see people that have had previous experience in government, you’ll see people from the private sector. We’re simply looking for the best and brightest. We’re saying, ‘Every position is vacant; we want everybody to apply.’ We’ve sent up a Web site and we encourage people to send their resumes. Who you know is not more important than what you know. We want the best, brightest people.

Q: Moving forward, the importance of building a knowledge-based economy has been discussed here for years, and we always talk about it but there’s been very little done to make it happen at the state level as evidenced by the types of projects the state has gone after or not gone after. How, specifically, do you change the emphasis?

Look at where we’re lacking: University of Alabama, Birmingham does more research than all of our public universities put together, and I think universities are critical for us to be competitive in a high tech economy. You look at Silicon Valley, you look at the biotech community of Baltimore, you look at the biotech community in St. Louis, all of these successful, high-tech economies are driven by university-led research.

You look at health care, which has been a promising area for years: We have three medical schools, four fully established graduate medial education programs, certainly more partial programs, yet look at how much research we do. As a state, we do $100 million of research in health care. The city of Birmingham does $200 million; the city of Houston does $400 million. Well, look at our policies and what we need to do to encourage more of that research. So how do you change that?

One, we need to double the R&D tax credit and encourage our businesses to partner with the universities. You can actually give small businesses refundable tax credits, vouchers, to work with universities, to use their labs and R&D departments to help those businesses to grow here.

Second, we need to also allow our faculty and students to keep the patents, the royalties; they earn rather than drive them from the state in return for them creating jobs in Louisiana.

Third, we’ve talked about LSU and Tulane partnering together to form a cancer consortium here in Louisiana. When I was at the Department of Health and Human Services six or seven years ago, I asked the head of the National Cancer Institute what would it take for Louisiana to have a nationally designated NCI cancer research facility. He promised me, ‘Bobby, you can do it in five years, but the challenge is you can only get it done if everybody in the state works together.’ No one institution in Louisiana is strong enough to do this on its own, and yet every year these institutions apply individually for grants but if they would work together …

Q: If I can interrupt, how do you get them to do that?

We need to continue providing funding for our universities, but there has to be accountability for that funding. What I mean by that is for years higher education has been the first thing cut, last thing funded in our budget. But we always tie that funding to enrollment. We fund our universities to be as large as possible, and we don’t look at retention or graduation rates, we don’t look at R&D productivity, we don’t look at patents or licensing and we don’t look at their success in national designations. Instead, we need to start offering additional funding, additional tenure, additional resources based on results so it’s providing that baseline, consistent, stable funding but tying it to results and accountability.

An example is Pennington. It’s been phenomenally successful, yet they’ve had to fight to get state funding for facilities, which is ridiculous. When you’ve got a facility that’s bringing in hundreds of researchers, billions of dollars in grants, I think the state’s attitude should be, ‘We’ll be thrilled to give you the best facilities in the world, but in return we expect world-class research. You partner with the private sector that brings these jobs here.’ So those are the policy changes.

In terms of specific examples—a lot of effort was paid to the state’s efforts to recruit a steel mill and other large, industrial employers. I think less attention has been paid to the recruitment of the cyber command center (in North Louisiana), which really has the potential to change our entire state’s economy. It’s provisionally at Barksdale Air Force Base in Bossier, and we’ve talked to the Secretary of the Air Force to try to make sure that center is permanently located in Louisiana. If that happens, that will bring thousands of good-paying, high-paying computer tech jobs to our state. We’re talking about the kinds of jobs with benefits. It would also bring private sector companies here—the Microsofts, the Lockheeds, the computer companies, the IBMs⎯because it will be the Pentagon center for Internet-based warfare, electronic warfare in other words. It will change our state.

The local government has put up $50 million for this project, and the state has committed $50 million. I've also committed to the Secretary of the Air Force … that we will have the degree programs at the community colleges to make sure they have the students and the professors they need because they're going to have to hire thousands of people with very technical skills.

Q: This money is going to have to come from somewhere so will you take it from other four-year institutions? Do you favor closing some of these smaller schools and restructuring the system so that we can devote these critical resources to these research-based projects?

The state has already appropriated the resources for the cyber command center. The money is there. The point is making sure we spend it appropriately and making sure the Air Force knows we’re not going to drag our feet, that we’re going to get this done.

But to go back to your question of how do you fund these degree programs? How do you fund these specialized programs? You do it based on accountability. For too long, the higher education funding formula has been based on inputs, not outputs. It’s been based on enrollments, and here’s the problem: We’ve got one of the higher dropout rates, and I think the carrot to our universities has to be that we’ll provide the funding but it has to be based on results.

Q: So you hope to accomplish this in your first session of the Legislature? I mean, are there specific bills you’re thinking of?

Absolutely, although higher education funding changes can be done by the Board of Regents and doesn’t even need a change of law. They’re in the middle of a master planning process where they’re re-evaluating how they’re going to do this. Now, the terms on the Board of Regents are staggered so I won’t have a majority, but I certainly will encourage them to move in this direction and we provide funding in our budget and we can tie that funding to outcomes. So absolutely our first priority in our first weeks in office these will be making these changes.

But what’s exciting is we’ve got the building blocks for a knowledge-based economy. We’ve got the concentration of industry here that’s already math- and science-based. You know, a third specific example is thousands of P-Tech operators that are about to retire and the reality is we’re not doing enough to train employees to replace them so it’s not just universities. It’s community colleges as well. It’s getting them to partner with your K-12 education even before they get out of high school.

Q: OK, K-12 is a big part of the problem. We have a grossly uneducated work force. How do you manage expectations to improve that when you only have a few years—eight at best?

Well, the P-Tech program is a great example of how you can impact the high school, the K-12 educational system. We’ve got a very high high school dropout rate. By one estimate, if we could improve graduation rates by 5% you would generate $200 million more for the state, just to show you what’s at stake.

Q: So then what do you do to address this? How do you make this happen in four or eight years?

Well, the reason kids are dropping out is because they don’t often see the relevance between education and their lives so before they get to high school you have dual enrollment and dual track programs. For kids going to college, that’s great. You encourage those kids to take AP courses, honors courses, and advanced courses so they can hit the ground running when they get to college.

You also make better use of technology. We rank in the bottom five when it comes to using technology in K-12. It’s not just a computer on every desktop; it’s making sure you use it to teach advanced courses.

Q: But what do you as a practical matter for the majority of these kids in the public school system now?

Well, let’s define the problem because I don’t think everyone realizes what the problem is—because this will change how we redesign our high schools. In Louisiana, we only send 20% to 25% of our kids to community and technical schools. Part of the reason we have such a high dropout rate is these kids don’t see an option for them. Before they get to high school, we need dual-enrollment, dual-track programs, so kids know that instead of dropping out they can start on technical credits towards a technical degree.

In Georgia, they guarantee that if you get technical training you’ll be ready to work on the first day or they will retrain you for free. There’s a pilot program in Jefferson Parish where they say if you doubled the program today you could fill every one of those slots. Every one of those kids could get good-paying jobs. You’ve got a shortage of welders, you’ve got a shortage of computer technicians, health care technicians, auto technicians, you have 10,000 vacancies in the health care industry, you’ve got your large shipbuilders turning down work because they can’t find the workers.

So one of the ways you reduce your dropout rate, one of the ways you make sure kids are ready to hit the ground running, is before they get to high school you give them other options. If they want to go to college, great. If they don’t, you put them on a path to get a technical degree and a technical education so they can have those good-paying jobs. Every study has shown that when kids see that future, when they see something relevant to them, they will stay in school. They will get those degrees, they will get those certificates. Right now we’re giving a pathway to college for many students but we’re not doing enough for the kids who are not going to college.

Q: Will you push for legislation early on at the BESE level to make this happen?

Absolutely, and right now BESE is in the process of a redesign so the timing couldn’t be better to create these dual-track, dual-enrollment programs. And at the state level we’re going to have to work and give more support to our technical colleges. We under-invest in those institutions. We have not paid attention to those institutions, and what we’re seeing is it’s hurting us in terms of economic development.

We’ve got a mega site for a car manufacturing facility up in north Louisiana. They’re up against Mississippi, and this mega site is in one of the poor parts of our state. One of the things we’ve heard from them and one of the things we heard from the Germans when they came here was that they’re looking for skilled workers. If we don’t have the skilled workers, it’s going to be very hard to keep the employers we’ve got, much less attract new employers.

Q: How quickly can you get skilled workers? How long does it take?

The good news is it doesn’t take very long to turn the system around.

Q: How long?

Well, these things we can do immediately—redesign the high schools, make decisions as we fund the higher education formula for our technical schools. And we’ve done this before. At one time in our recent history we were training prisoners to go into welding programs. There’s no reason we can’t immediately. I’m proposing a Day One job guarantee that tells our people if you get technical training, you’ll be ready to work on the first day or we’ll retrain you for free. The good news is this: Louisiana has been under-performing in many areas because of antiquated tax policy, because of weak ethics laws, weak work-force training programs. The good news is as we start to strengthen those and make them the best in the country, you’re going to start to see immediate results and immediate attention. The rest of the country is paying attention to us today.

Q: Speaking of funding higher education. Are you willing to take on the sacred cow of so many four-year institutions here? And would you favor restructuring the system so there are not so many four-year colleges?

The reason we’ve got overlap and duplication is because of the way we fund our institutions. As long as we fund institutions based on how many students they enroll, they’re going to continue admitting a lot of students that may not be ready for those colleges. Now, some of those colleges have implemented admissions standards to try to correct this, but I think the way you change that is to go in there and change the incentives and say, ‘You will be funded properly but you will be funded based on unique areas of excellence.’ Not every school has to be all things to all people. Secondly, you will be funded based on outcomes, based on how many students stay in your school, graduate from your school, get jobs after they graduate and stay in the state. I think if you do that, you’ll see the institutions naturally reduce the duplication and reduce their overlap.

Q: But don’t you think we have too many four-year institutions, yes or no?

That’s not going to change.

Q: It’s not going to change?

No. The reality is that the best way to get universities to make sure we don’t have duplicate programs and to make sure we don’t have overspending is to make sure each university is serving its community, serving its students. The way you do that is by funding them based on outcomes, funding them based not on student enrollment but on research or graduation rates.

Q: Would you push to change the laws so the Legislature doesn’t have to approve tuition increases at LSU?

What we have said is that we would under these following circumstances: First, the Board of Regents has to come forward and say that they want a limited tuition increase, and they’ve got to have caps in there. Secondly, they’ve got to show how these dollars are going to be spent, meaning this isn’t just going to disappear into the general fund. Third, that they implement student need-based programs for students who can’t afford their tuition. Finally, they’ve got the support of the student leaders on campus. Then, certainly, we’ll consider what has been done before, which is not to overlook the Legislature’s oversight completely but give [LSU] what has been given before, which is multiple-year flexibility.

Q: Health care is a major problem we know. Would you favor a system where the dollars follow the patient, rather than go straight to the institution as it now does?

We need to give more regional control for how those uninsured health care dollars get spent today. We’re one of the only states in the country that doesn’t do that. The reality is there’s no one-size-fits-all solution. We need to go to each community and guarantee that over several years a baseline of uninsured funding will be spent. Now, we’ll let them have some decisions about how best to spend these dollars. For example, some communities would bond this money out for bricks and mortar. Some communities would say, ‘We’ve got excess capacity; we’ll use these dollars to purchase services in the private sector.’ Let the communities decide.

We did this on the outpatient side. We created the Capital Area Human Services District when I was DHH secretary. Jefferson Parish has long done this on the outpatient side. What they discovered was they got much better services for the dollars they spent. I think you’ll get the same kinds of efficiencies, the same kinds of better planning, by letting local communities have a say in how to spend those uninsured dollars.

Q: So you’ll make a push for this? How soon do you try to make this happen?

In our first year; and, in addition to that I think we have to encourage more private coverage. I think all too often in Louisiana we’ve had an all-or-nothing approach where basically we told people, ‘Look if you don’t have a job we’ll give you free health care and if you do get a job we’re not going to help you anymore,’ which doesn’t make any sense in the world. We [the federal government] have helped to create four model programs they use in other states. One is called the HIFA waiver. It stands for Health Insurance Flexibility and Accountability. The idea behind that is if your employer is willing to pay something we’ll pay something, too. We’ll help you get private coverage. Otherwise, you discourage people from going back to work.

A second waiver is called the pharmacy-plus. The idea is you’ve got a lot of people that have some health care coverage, but they can’t afford a particular benefit. Maybe they can’t afford a prescription or rationing their pills. Dozens of states said, ‘Well why don’t we help you with the health care you need?’ Whereas in Louisiana it’s all or nothing, and we force people into bankruptcy.

Q: So are you pushing for these kinds of changes on a statewide level?

We are, and the good news is a lot of these programs—these waiver programs—are being done in other states. The state doesn’t have to reinvent the wheel. We can easily go and get them pre-approved by the federal Department of Health and Human Services.

Q: But it wouldn’t necessarily mean closing down the charity system, for instance, in New Orleans?

No, the reality is if you say, ‘New Orleans, here is the money we are going to spend,’ they’re going to vote to build a hospital—and the city of New Orleans needs a university hospital. Where I disagree with previous efforts is I’m not convinced it needs to be as large as has been described before. I think a successful university hospital in New Orleans has regionally important services, like trauma care. The reality is whether you have great insurance, whether you have no insurance, before the storms if you were in a car accident you’d want to go to Big Charity. If you were a gunshot victim, before the storm, you’d want to go to Big Charity. If you were a burn victim, you’d want to go to LSU Shreveport because they do more of those cases than anything else. So the first things that need to be provided are regionally unique services where it makes sense. There are certain centers of excellence where having a high volume of services that only a few providers will provide those services and they’ll do it more effectively and they’ll get better results for the dollars.

Secondly, you want it to do world-class graduate medical education but the reality is by partnering with local institutions, there are actually tens of millions of dollars in federal Medicare funding for graduate medical education that we leave on the table because we don’t partner with the private sector to deliver that GME. So you want them to continue to that GME—but partner with local institutions.

The third thing, they’ve got to provide more opportunities for health care research. We’ve already talked about how we weren’t doing as much as other institutions and other states.

Fourth, it has got to be a safety net for the local populations, for those who don’t have anywhere else to go get health care services. But, more importantly, this is our chance to place more emphasis on preventive care. Before the storm, we didn’t have enough emphasis on outpatient care and this gives us a chance—rather than just rebuilding inpatient hospital beds let’s build a teaching hospital. Let’s also use some of the savings and partner with Tulane and some of the others by building it the right size.

You know, you asked about dollars following the patients, too often the debate has been between two extremes. The reality is when you look at what 49 other states do every other state has public hospitals and in addition to that they have some dollars that follow the patient to help provide preventive care, primary care, private coverage and that’s all I’m describing for Louisiana.

Q: Reformers always talk about the need to restructure the state’s tax system, which is regressive and not business-friendly. How high on your list of priorities is this and specifically what do you favor doing?

In northeast Louisiana, you’ve got a paper mill that is the economic lifeblood for Bastrop, hundreds of jobs, and all over the state we have paper mills like this. And these paper mills have been threatened with closure for years. Every year, they make another decision on whether to stay. When you tour that plant in Bastrop, the plant manager carries a long sheet of paper in his pocket of all the taxes they pay in Louisiana that they don’t pay in other states. He says, ‘Every time we make an incremental investment, we’re not buying new equipment in Louisiana.’ The problem with that is that one day they’re not going to be as efficient or as competitive as their sister facilities so one day it’s not going to make any sense to keep that plant open and overnight we’ll lose hundreds of jobs. So, what can we as a state do in the immediate short term?

We get rid of the new job taxes—the taxes on debt, new equipment and utilities. Now, the state is beginning to phase out the taxes on debt and new equipment, though in previous attempts they always end up delaying. Let’s also get rid of the tax on utilities. Why in the world would we want to tax companies that are borrowing money, buying new equipment, when they’re trying to expand here in our state? When you think about it on a blank sheet of paper, you never would have created those taxes. So in the short term, get rid of those new job taxes that neighboring states are using to recruit against us.

In the medium term, as we grow our economy, once we get rid of these taxes that hold us back, we’ll have to look at our income tax. Florida doesn’t have an income tax. Texas doesn’t have an income tax. Their economies are growing very quickly. Again, we can’t do it overnight, but as we get rid of the new job taxes it will give us the opportunity to over the long term eliminate the income taxes that are holding us back.

Full steam ahead

Managing the expectations of an electorate ready for change could be Jindal’s biggest obstacle.

B obby Jindal faces many daunting challenges as he assumes the helm of one of the most troubled states in the nation. There’s the underperforming public education system, the outmoded health care delivery system, the crying need to attract to the state businesses that bring with them well-paying jobs. And that’s just to name a few.

But perhaps the biggest obstacle the governor-elect will have to overcome in his first months in office will be that of managing the inflated expectations of what he can realistically accomplish in his first year, his first term, or even two terms. That so many Louisiana voters sent Jindal to Baton Rouge in the primary and also because the national media has embraced his victory and attached to it much symbolic importance, Jindal not only has to address the many troubling issues that plague the state, he has to simultaneously make sure everyone understands he can only do so much.

“That’s definitely going to be a challenge for him,” says Dane Strother, a Democratic political consultant in Washington, D.C. “You’re not going to turn a battleship around overnight, and the problems are so ingrained in Louisiana they’re not going to be overcome in eight years.”

That may be, but it hasn’t kept the local and national media from cooing about the Jindal victory in the most glowing of terms. The media loves a good political story, and this one has all the elements that make for a great one. For one thing, there’s the obvious contrast between Jindal and just about every other governor and major elected official from the state who has come before him.

“He offers a level of dynamism that we haven’t seen before,” local political columnist John Maginnis says. “It’s not like he’s just coming in behind Edwin Edwards. He’s coming in after two relatively conservative and reform-minded governors, but neither of them had the kind of spark and energy that he has.”

Then there’s his age, and that he’s always been something of a wunderkind. He was a candidate for governor the first time at just 32 and elected to Congress at 34. Now at 36, he’s the youngest governor not only in the state’s history, but in the nation.

“He represents the next generation of leaders to take over,” explains Jordan Lieberman, publisher of the Virginia-based Campaigns and Elections magazine. “We have the same old mayor in New Orleans, many of the same politicians in the Legislature but now we finally have someone who is a fresh face.”

Then there’s the fact that Jindal is an Indian-American—not only the nation’s first to be elected governor, but the first Louisiana governor of any ethnic extraction to be elected since Reconstruction. In a state that just 15 years ago came perilously close to putting David Duke in the Governor’s Mansion—a state that continues to make international headlines for the allegedly race-based prosecution of six black teenagers in rural Jena—electing an Indian American governor is no small thing.

“Because of Katrina and all the racial problems associated with it and then the Jena 6, it’s tremendously symbolic that we have elected a person who is an ethnic minority,” says Ed Renwick, director of the Institute of Politics at Loyola University in New Orleans.

It all adds up to a lot of positive press. An editorial in last week’s Wall Street Journal by homegrown Dallas-based columnist Rod Dreher sums up what every reporter in the country—and every voter in Louisiana—seemed to be saying. “My governor is a Hindu Catholic Republican,” Dreher wrote. “And I think he’s going to write the next great Louisiana story. Maybe just this once, it’s not going to be a farce.”

That’s quite an expectation and it shows just how much is riding on the governor-elect. Does it set him up in a position where he’s bound to fail, destined to topple from the pressure of having so many hopes pinned to him?

Perhaps, Strother says. He believes the key to Jindal’s success will be to focus on just one or two things early on and concentrate on getting them done. That way he will have very real accomplishments that he can point to as evidence of his ability to implement the kind of change that voters and the national media are hoping for.

“He can’t get it all done,” Strother says. “He needs to find just one or two and focus on those.”

Jindal’s best bet may come in one of the areas where he’s strongest—economic development. It’s an area in which he can achieve quick, easily identifiable results. Making major changes in education or health care, by comparison, will be a lot more difficult and take much longer.

“He’s up against this immovable object of the state rankings—we’re lowest in everything and it takes a long time to move up in those rankings,” Maginnis says. “He’s going to need to be able to stress the things he did in the short term, things with quantifiable results.”

Renwick believes Jindal’s Indian connections will help—in a very real way. Jindal might be able to use them to help attract Asian investment and Indian companies to the state, which would give him some of the immediate results he will need to prove his abilities.

“He should be able to help us get investments from areas that we wouldn’t have gotten before,” Renwick says.

Not everyone agrees the expectations on Jindal are unrealistic, though. Lieberman says the national media understands the limitations on the new governor—on any governor—and isn’t looking to Jindal to turn Louisiana around. But merely by virtue of getting elected Jindal has done more good for Louisiana than most people in the state realize.

“Just by electing him Louisiana has passed a milestone,” Lieberman says. “Obviously, he’s got a lot of work to do and everybody realizes that. But Louisiana, by electing Bobby Jindal, has taken the first step. It has been rehabilitated.”