Daily Report

This Afternoon's Headlines / Fri, May 11, 2012


Donelon, Cassidy say idea of 'Obamacare' exchanges has merit

Louisiana Department of Health and Hospitals Secretary Bruce Greenstein says the state should not set up a health insurance marketplace called an "exchange," citing the expected cost. Insurance Commissioner Jim Donelon and Congressman Bill Cassidy, R-Baton Rouge, each defer to Greenstein on the details, but both say the concept of exchanges, part of federal health care reform, has merit. "Exchanges are a vehicle to give greater consumer access to shop for the best product in their price range," Donelon says. Blue Cross Blue Shield of Louisiana controls about 75% of the state's health insurance market, he says, adding an exchange could improve the state's market if the federal requirements are not too onerous. Cassidy says exchanges are rooted in a "Republican idea" and could arm consumers with information, although exchanges also have the potential to establish artificial price controls. Greenstein says an exchange is the "operationalization" of the insurance mandate that has been challenged as unconstitutional. The law says each state can create its own exchange or defer to the federal government. Greenstein says it's hard to estimate how much it would cost Louisiana to operate an exchange, because the federal rules are not clear and complete. Officials in Alabama, a state of similar size and demographics, estimate an exchange in their state could cost between $34 million and $49.6 million in 2015, DHH says. Senate Bill 744 calls for the creation of a Louisiana exchange. The Pelican Institute argues against the bill in a summary you can see here; while the Louisiana Budget Project makes the opposite argument here. —David Jacobs

EBR building permits drop in April, but valuation rises

The number of building permits issued in East Baton Rouge Parish was off by 6% in April compared to the same month a year ago, according to a new report out today by the city-parish inspection department. A total of 1,682 projects received a permit during the month, down from 1,793 in April 2011. The total value of the permits issued this April, however, was 13% higher than those from a year ago, at $42.4 million. Valued at $3.5 million, the largest project getting a permit last month was a planned Associated Grocers supermarket at Highland Road and Perkins Road East called Alexander's Highland Market. St. Amant-based Murray's Inc. announced in October it had purchased 3.5 acres of vacant land across from Blue Bayou Waterpark for the supermarket. Other large projects getting a permit in April include a new Verizon Wireless store at 8182 Airline Hwy. valued at $3 million; the new construction of a Cottonport Bank branch at 6500 Corporate Blvd. valued at $2.5 million; and a renovation and expansion of the City Club of Baton Rouge at 355 North Blvd. valued at $2.15 million. Year-to-date, permitting in the parish is up 1.6%, with 7,223 issued through April this year versus 7,107 issued through the first four months of 2011. Year-to-date valuation is up 45%, at $211.6 million, compared to $146.2 million last year.

'225': Turning the tide

Eighty percent of the nation's land loss occurs in Louisiana, with the state losing an estimated 25-35 square miles each year, according to the Governor's Office of Coastal Protection & Restoration. One hurricane takes your area's homes and fishing camps. The next cuts down the trees and kicks four feet of sand in your garage, in your living room, in your face. Then one morning you wake up, and a leading oil and gas multinational is pumping crude at you at the rate of 4.2 million gallons a day. Then that awful morning turns into 57 awful mornings. The people of Grand Isle—a slender 17-mile strip of land, Louisiana's only inhabited barrier island and its first line of defense against storms—ought to be forgiven if they feel they have been under attack the last several years. Paul and Libby Foret, founders of Sign Express in Baton Rouge, have owned a vacation home on Grand Isle for more than 20 years. In 2010, when the BP oil spill wrestled any immediate means of income away from the longtime fishermen and shrimpers of the island, Libby Foret took the sudden economic blow as her call to action. In memory of her late father-in-law, who spent his dying days on the island, she organized a one-day concert with six bands playing on the island's Bridgeside Marina. She called it Uplifting the Coast. This year, June 8-10, the Baton Rouge Fairgrounds will host the first Uplifting the Coast Festival. Get the full story behind the festival and all the details in the 225 story by Editor Jeff Roedel here.

Rain cancels Live After Five today

In the first of what will likely be a number of rained-out events today and tomorrow in the Baton Rouge area, organizers of Live After Five say this evening's concert has been canceled. Press 1 For English had been scheduled to take the stage. The downtown concert series is slated to resume next Friday with the R&B/soul group One More Time Band onstage. With two to four inches of rain expected to fall over the area between tonight and Saturday—and as many as six inches possible in isolated areas—a flash food watch has been issued by the National Weather Service for East Baton Rouge and surrounding parishes through Saturday night. The forecast is now calling for an 80% chance of rain Saturday. Nonetheless, as of press time, tonight's LSU baseball game versus Vanderbilt is still a go. The first pitch is scheduled for 7 p.m. It's the Tigers' final home series of the season, with games scheduled tonight, Saturday at 7 p.m. and Sunday at 1 p.m. The Tigers' final home game will be Tuesday at 6:30 p.m. versus Nicholls State University.

House considers compromise on $25B budget for next year

House Republicans floated a proposal today to cut $268 million out of next fiscal year's budget through possible furloughs for state workers, reductions to overtime pay and elimination of vacant jobs, among other measures to offer the Jindal administration for consideration. House lawmakers were trying to reach a compromise over the $25 billion budget for the 2012-13 fiscal year, which begins July 1, having deadlocked Thursday on the financing ideas Jindal supports. Conservative Republicans and the GOP governor are at odds over whether to use one-time cash to piece together next year's spending plans—or to make deeper cuts to state agencies. A bloc of Republican lawmakers say the one-time dollars create false expectations in state agencies, paying for services the state can't afford year after year. Other lawmakers and the Jindal administration say stripping the money would force harmful cuts to colleges and health care programs. The compromise proposal offered by Rep. Cameron Henry, R-Jefferson, vice chairman of the House Appropriations Committee, would give the governor's Division of Administration a list of nine ways to cut the budget. The administration would have to choose $268 million in reductions out of the $357 million list. "It's just a menu, just like when you go to the restaurant. Pick the ones you like," Henry says. Democratic lawmakers, who are siding with Jindal on the budget bill, call the Henry proposal an abdication of legislative authority. Get the full story from The Associated Press here.

JPMorgan loss sets off call for rigorous regulation

A surprise $2 billion trading loss by a division of JPMorgan Chase announced Thursday triggered calls today for tougher regulation of banks three years after their near-death experience in the financial crisis. Stock in the bank, the largest in the United States, lost 8% of its value in minutes on Wall Street, and other American and British banks suffered heavy losses as well. JPMorgan Chase says it lost the $2 billion in a trading group designed to manage the risks that it takes with its own money. CEO Jamie Dimon says the bank's strategy was "egregious" and poorly monitored. The disclosure came as a shock to stock analysts and quickly revived debate about whether banks can be trusted to handle risk on their own in the age of "too big to fail." "The argument that financial institutions do not need the new rules to help them avoid the irresponsible actions that led to the crisis of 2008 is at least $2 billion harder to make today," says Rep. Barney Frank, D-Mass. Frank, the retiring Democratic leader of the House Financial Services Committee, says in a statement that the revelation runs counter to JPMorgan's narrative "blaming excessive regulation for the woes of financial institutions." Dimon has been among Wall Street's most outspoken critics of efforts to regulate the financial industry more heavily. Read the full story by The Associated Press here.

News roundup: Energy execs cautious about acquisitions, survey says … Weekly U.S. oil, gas rig count up by 9 … Closing arguments heard in 'Lil Boosie' murder trial

Depends on who you ask: Energy executives expect to pull back on deal activity over the next year, after a recent busy period of shale-driven mergers and acquisition, according to a survey by accounting firm Ernst & Young. As the The Houston Chronicle reports, of the 141 oil and gas executives surveyed in April, 31% say they plan to pursue an acquisition during the next 12 months, down from 48% just five months earlier. Nearly half of responding executives say they plan to sell off assets, more than double the 20% who said the same a year ago. Still, executives are generally optimistic about the future of their companies and the economy. More than 90% expect their payroll to grow or remain steady over the next year, and more than half believe the global economy is gaining strength. At the same time, 54% believe credit availability is getting better, compared to 31% in October.

Louisiana on the losing end:The number of rigs actively exploring for oil and natural gas in the United States is up nine this week to 1,974. Houston-based oilfield services company Baker Hughes Inc. reports today that 1,372 rigs are exploring for oil and 598 are looking for gas. Four are listed as miscellaneous. A year ago this week, Baker Hughes reported 1,830 rigs. Of the major oil- and gas-producing states, Oklahoma gained three rigs; Alaska and California each gained two; and Texas, West Virginia and Wyoming were up one apiece. Louisiana declined by two rigs; Colorado, New Mexico and Pennsylvania were down one each. Arkansas and North Dakota figures were unchanged. The rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.

Fact or fiction? A defense attorney for rapper Torence "Lil Boosie" Hatch accused prosecutors of attacking a culture while failing to make their case in Hatch's first-degree murder trial. In closing arguments today, attorney Jason Williams claimed the prosecution was influenced by violent imagery and lyrics in Hatch's music. But, Williams added, those were merely images used to sell recordings—not evidence of a crime. The prosecution rested Thursday and the defense declined to call a witness, setting up today's closing statements. Prosecutors contend Hatch hired a man to kill 35-year-old Terry Boyd, who was shot to death in 2009. The 29-year-old Hatch is already serving an eight-year prison term on drug charges and is being held in the Louisiana State Penitentiary at Angola. At 2:30 p.m. state District Judge Mike Erwin turned over the case to a 12-member jury after giving them instructions. A first-degree murder conviction would mean a life sentence for Hatch. Prosecutors are not seeking the death penalty in the case.

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